Warner Bros Discovery Inc (NASDAQ:WBD, XETRA:J5A) reported a 6% drop in quarterly revenue, weighed down by declines in its traditional television and film businesses, even as its HBO Max streaming service continued to gain subscribers.
The company posted revenue of nearly $9.5 billion, in line with analyst expectations, while adjusted earnings for its film and TV studio group fell 23% to $728 million. Its Discovery Linear Networks unit, facing ongoing industry-wide losses of pay-TV subscribers, saw revenue fall 12% to $4.2 billion and adjusted income tumble 27% to $1.4 billion.
HBO Max added 3.5 million subscribers in the quarter, taking its total to 131.6 million worldwide. Streaming revenue rose 5% to nearly $2.8 billion, though adjusted earnings slipped 4% to $393 million due to the expiration of an unspecified distribution deal. Popular series such as Heated Rivalry and It: Welcome to Derry helped drive growth.
Advertising revenue dropped 9%, reflecting the loss of NBA broadcasting rights on Turner, which cost the company roughly half of the shortfall. Studio revenues fell 13% from a year earlier, mainly due to lower content sales.
Warner Bros Discovery remains at the center of a high-stakes bidding battle. Paramount Skydance recently raised the possibility of an improved cash offer, challenging an existing deal with Netflix. Warner’s board said it has not yet determined whether the Paramount proposal is superior but will continue discussions.
Industry observers say Paramount may now be in a stronger negotiating position, potentially paying a premium for the combined Warner Bros. and Discovery assets, while Netflix is on the defensive. Should a superior offer emerge, Netflix has four business days to revise its bid.