WBD Q4 earnings: revenue slips, streaming grows

Warner Bros. Discovery reported lower revenue and a wider-than-expected loss in its latest quarter, as pressure across its traditional television businesses overshadowed continued growth in streaming.

The results come as the media group remains at the centre of a high-stakes takeover contest involving Netflix and Paramount Skydance.

The company posted a fourth-quarter net loss of $252 million, or 10 cents a share, compared with a loss of $494 million a year earlier.

Analysts surveyed by FactSet had expected a smaller loss of three cents per share.

Revenue fell 6% to $9.46 billion, slightly ahead of market expectations of $9.35 billion.

Shares were little changed following the results.

Streaming growth offers some relief

Streaming remained a rare bright spot in the quarter.

Warner added 3.5 million subscribers, taking its global total to 131.6 million across its platforms, including HBO Max and Discovery.

Subscriber gains were supported by strong engagement with new content, including the series Heated Rivalry and It: Welcome to Derry, helping offset weakness elsewhere in the business.

Despite the subscriber growth, streaming gains were not enough to counter declines in Warner’s legacy television operations.

Linear TV drag weighs on results

Distribution revenue fell 3% to $4.79 billion, while advertising revenue declined 7% to $1.7 billion.

The company said both segments were weighed down by ongoing subscriber losses in linear television, which more than offset incremental improvements from streaming.

Content revenue slipped 9% to $2.66 billion, reflecting the timing of content renewals across the studios and global linear networks divisions.

Adjusted earnings before interest, taxes, depreciation and amortisation for the linear networks business dropped 27% year on year to $1.41 billion, in line with Wall Street forecasts.

The continued erosion of cash flow from cable networks has been a central concern for investors assessing Warner’s long-term valuation.

Takeover talks loom large

The earnings update comes as Warner remains locked in takeover negotiations that could reshape the US media landscape.

Netflix has already agreed to acquire Warner’s studios and HBO Max streaming service, while Paramount Skydance has submitted a rival proposal to buy the entire company.

Warner said its board had determined that Paramount’s revised bid “could reasonably be expected to lead to” a superior offer compared with Netflix’s existing agreement.

Under the terms of that deal, Netflix has a four-day window to match any higher bid.

Paramount has argued that its proposal offers greater certainty for shareholders, even as it maintains that traditional cable networks carry little to no equity value.

The debate has focused attention on the future worth of Warner’s Discovery cable assets, which would be spun off to investors under Netflix’s offer.

Paramount chief executive David Ellison has described Warner as an accelerant to achieving the company’s growth ambitions, while Netflix chief executive Ted Sarandos is expected to lobby policymakers as discussions continue.

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