WBD Q2: Streaming Tops $3B While Studios Implode and Merger Stalls
WBD has more than doubled off its 52-week low of $10.76.
Summary
WBD's Q2 earnings highlight streaming momentum with record revenue and profit, but studios profit collapsed and the Paramount merger is delayed by litigation.
Key Events · Earnings and Guidance · WBD
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Streaming Revenue Tops $3B
Streaming segment revenue reached $3.08 billion, up 10% ex-FX, with Adjusted EBITDA of $512 million (63% ex-FX growth) driven by HBO Max global expansion and hit series.
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Studios Profit Collapses
Studios Adjusted EBITDA fell 89% ex-FX to $96 million as theatrical revenue dropped 46% ex-FX against tough comps from A Minecraft Movie and Sinners in the prior year.
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Merger on Hold Indefinitely
The Paramount Skydance acquisition is paused until the earlier of five days after legal proceedings conclude or June 1, 2027, with no questions taken on the call.
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Debt Refinancing Saves Interest
Refinanced the $15 billion bridge loan with $13 billion and €1.7 billion term loans at SOFR/EURIBOR + 250 bps, expecting ~150 bps annual interest savings.
Analysis · WBD · Technology
Warner Bros. Discovery's second quarter tells a story of extremes. For the first time, the streaming segment crossed $3 billion in quarterly revenue, and Adjusted EBITDA surged 63% ex-FX to $512 million, fueled by HBO Max's global rollout and hits like Euphoria and House of the Dragon. Yet the studios segment cratered, with Adjusted EBITDA plunging 89% to just $96 million as this year's theatrical slate paled against last year's blockbusters. Overall, revenue fell 12% ex-FX to $8.7 billion, and free cash flow dropped 19% to $572 million, weighed down by $350 million in merger-related costs. On the financing front, the company replaced its $15 billion bridge loan with term loans at attractive rates, locking in roughly 150 basis points of annual interest savings. Crucially, the $81 billion acquisition by Paramount Skydance remains on hold until legal challenges are resolved or June 2027, injecting uncertainty into the investment outlook.
At the time of this filing, WBD was trading at $26.20 on NASDAQ in the Technology sector, with a market capitalization of approximately $65.1B. The 52-week trading range was $10.76 to $30.00. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.