Warner Bros. Discovery’s second-quarter results laid bare a familiar dynamic: the studios and streaming segments are pulling more than their weight while the linear business continues to decline. Total revenue came in at $9.8 billion, a modest 1% increase year over year, but the company flipped to profitability with net income of $1.58 billion. That is a dramatic turnaround from the $10 billion loss posted in the same quarter last year. Adjusted EBITDA rose 9% to $2 billion.
The studio division delivered the quarter’s biggest win with $3.8 billion in revenue, up 55% compared to last year. Adjusted EBITDA came in at $863 million, helped by a strong theatrical slate that included Sinners, A Minecraft Movie, Superman, Final Destination: Bloodlines and F1, the last of which was co-produced with Apple. Collectively, the five films brought in over $2 billion at the global box office. Zaslav pointed to long-term efforts finally paying off and indicated that Warner Bros. would double down on its most valuable IPs like Superman, The Lord of the Rings and The Wizard of Oz. He also signaled the company’s intention to grow its presence in gaming and theme parks through a unified global experiences division under Bruce Campbell.
Streaming also posted a solid quarter. Warner Bros. Discovery added 3.4 million subscribers to reach a global total of 125.7 million. Revenue grew 8% to $2.8 billion, and the segment posted a $293 million profit compared to a $107 million loss last year. Most of the growth came from international markets, including new launches like Australia. HBO Max benefited from strong viewership for series like The White Lotus and The Last of Us. The company reaffirmed its target of 150 million global subscribers by 2026 and expects to earn $1.3 billion in streaming profit next year.
But the linear networks division was once again a drag on the company’s performance. Revenue fell 9% to $4.8 billion, and EBITDA dropped 24% to $1.5 billion. WBD cited continued cord-cutting, reduced ad revenue, and the absence of March Madness programming as major factors behind the decline. All six major carriage renewals have been completed, which should offer some near-term stability, but the long-term trajectory remains negative.
The company remains on track to spin off its cable networks into a separate entity by 2026. Zaslav said this move will allow both Warner Bros. and Discovery Global to focus on their respective strengths. He described it as necessary to navigate a generational disruption in the industry. He also reiterated his belief in the value of bundling streaming services and simplifying the consumer experience. He forecasted a future with fewer apps and more cooperation among major players.
While Wall Street was not impressed, with shares falling 5% after earnings, the quarter reinforced where the company’s momentum lies. Studios and streaming are working. Linear is not. The structural split reflects that, and leadership is clearly positioning for a future where IP, international growth, and consumer-facing experiences are the core value drivers.
