WBD Swings to Q2 Profit, but Six-Month Loss Reaches $2.7B on Netflix Fee; PSKY Merger Encounters Legal Hurdles
WBD has more than doubled off its 52-week low of $10.76 on light trading volume (0.1× avg).
Summary
WBD reported a Q2 profit of $162M but a six-month loss of $2.7B due to the Netflix breakup fee. The PSKY merger is now tied up in antitrust litigation with a trial set for March 2027, while the company refinanced its bridge loan with $14.7B in new term loans.
Key Events · Earnings and Guidance · WBD
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Q2 Profit, Six-Month Loss
Q2 net income of $162M ($0.06/share) on revenue of $8.7B, but six-month net loss of $2.7B ($1.11/share) due to the $2.8B Netflix termination fee. Revenue fell 11% YoY.
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Streaming Surges, Studios Slumps
Streaming Adjusted EBITDA rose 75% to $512M on 10% revenue growth. Studios Adjusted EBITDA plunged 89% to $96M as theatrical revenue dropped 46% without last year's hit films.
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Linear Networks Under Pressure
Global Linear Networks revenue fell 17% YoY; advertising dropped 27% due to the loss of NBA rights, which cost $414M in ad revenue for the quarter.
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PSKY Merger Blocked by Lawsuits
Two antitrust lawsuits (state AGs and WGA) have halted the $31/share PSKY merger. A temporary restraining order is in place, and a 12-day trial is scheduled for March 2-19, 2027.
Analysis · WBD · Technology
Warner Bros. Discovery delivered mixed Q2 results: a $162M net profit on $8.7B in revenue, yet the six-month picture shows a $2.7B loss driven entirely by the $2.8B Netflix termination fee. The core business is stabilizing—Streaming EBITDA jumped 75%—but the Studios segment collapsed 89% on a weak film slate, and linear networks continue to bleed advertising dollars. The real story, however, is the PSKY merger: two antitrust lawsuits and a temporary restraining order have pushed the trial to March 2027, injecting major uncertainty into the $31/share cash deal. The company also completed a critical refinancing, swapping a $15B bridge loan for $13B in dollar and €1.7B in euro term loans, extending maturities to 2033. With $3.4B in cash and $4B in undrawn revolver capacity, liquidity is adequate, but the merger overhang and linear decline keep the pressure on.
At the time of this filing, WBD was trading at $26.44 on NASDAQ in the Technology sector, with a market capitalization of approximately $66.3B. The 52-week trading range was $10.76 to $30.00. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.