Warner Bros. Discovery narrowed its fourth-quarter net loss by nearly half to $252 million, but revenue fell 6% to $9.5 billion as the media giant’s cable TV business continued to undercut its growing streaming and studio assets.
The streaming and studios segment saw revenue grow 4% to $5.6 billion and profits increase by 6% to $1.2 billion. WBD’s streaming division now boasts nearly 132 million subscribers globally, surpassing the company’s 130 million target established in August 2022. Meanwhile, the global linear network division saw revenue fall 12% to $4.2 billion and profit plunge 27% to $1.4 billion.
The results underscore why Netflix is so keen to acquire HBO Max and Warner Bros. studio, with Paramount back in discussions to buy the entire company. Warner Bros. on Thursday made little reference to the ongoing saga beyond noting it continues to engage with Paramount after determining its latest $31 per share offer could “reasonably be expected” to lead to a “superior proposal.” The company declined to answer analyst questions about the saga on the earnings call and is still recommending its $83 billion deal with Netflix.
“Our board continues to lead a rigorous, highly competitive and thorough sales process. We engaged with four bidders, which led to eight price increases, and have thus far achieved a 63% increase in value since the first offer received in September, delivering significant value for WBD shareholders throughout the process,” WBD CEO David Zaslav told analysts on Thursday. “Our focus has and always will be maximizing value and certainty while mitigating downside risks, and the board will evaluate any proposal against that standard with the objective of delivering the best deal for our shareholders.”
Here are the quarter’s results:
Net loss: $252 million, down 49% from $494 million a year ago. The figure includes $1.3 billion of “pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses.”
Earnings Per Share: A loss of 10 cents per diluted share, compared to breakeven expected by analyst estimates compiled by Yahoo Finance.
Revenue: $9.46 billion, down 6% year over year, slightly above the $9.37 billion analysts had predicted.
Streaming subscribers: Added 3.5 million subscribers for a total of 131.6 million globally.
Looking ahead, WBD is now on track to exceed its 150 million subscriber target by the end of 2026. It will also no longer report subscribers or average revenue per user starting next quarter. Additionally, it remains on track to reach $3 billion in profit in its studios business, though a timeline for that goal has not been outlined.
“We continue to execute against our strategic pillars,” the company said in its quarterly shareholder. “In parallel, we are focused on maximizing revenue for shareholders. As we move forward into our next phase of Warner Bros. Discovery, we remain confident that the business is well positioned to deliver sustainable performance and long-term success in an evolving media landscape.”
WBD ended the quarter with $33.5 billion in gross debt and $44.6 billion in cash on hand. It also repaid $1 billion of its existing bridge loan and extended the maturity on that loan to June 30, 2027.
Streaming growth to accelerate
Total streaming revenue grew 5% to $2.8 billion during the quarter, but profits fell 4% to $393 million. For the full year, the streaming division posted a profit of $1.37 billion, exceeding the company’s guidance and more than doubling year-over-year.
Distribution revenue grew 3% to $2.4 billion, driven by a 13% increase in subscribers and the global expansion of HBO Max, offset by the previously disclosed domestic distribution deal renewal. Ad revenue rose 18% to $278 million, driven by an increase in ad-lite subscribers and offset by the absence of the NBA. Subscriber-related revenues grew 5% to $2.7 billion, while content revenues jumped 20% to $119 million. The increase in content revenue was due to the timing of domestic third-party content sales, offset by lower international licensing as a result of HBO Max’s expansion in new markets.
Global streaming average revenue per user fell 9% to $6.80, driven by an 11% decrease in domestic ARPU to $10.45 due to a previously disclosed distribution deal renewal and international ARPU of $4, up from $3.74 in the year ago period. Moving forward, WBD will no longer break out subscribers or ARPU.
Looking ahead, WBD expects to finish the first quarter with more than 140 million subscribers, with HBO Max available in over 100 markets globally and upcoming launches planned for the United Kingdom and Ireland on March 26.
It also expects subscriber and related revenue growth to continue accelerating in 2026, driven by the launch of its ad-supported tier in new markets, U.S. price increases during the fourth quarter, a strong content slate and continued product enhancements and feature improvements. WBD will also continue to invest in content and marketing to support HBO Max’s global expansion and the streaming service’s password sharing crackdown will expand globally in 2026.
Studios sees quiet end to strong year
Studios revenue fell 13% to $3.2 billion during the quarter, while profits fell 23% to $728 million. For the full year, the division posted a profit of $2.6 billion, exceeding the company’s guidance.
During the fourth quarter, distribution revenue swung to a profit of $4 million from a loss of $6 million, while content revenue fell 15% to $2.9 billion. Weighing on content revenue was an 11% decline in theatrical revenue due to lower content sales and lower box office revenues from no releases in the current year quarter; an 18% decline in TV revenues from the timing of intersegment content renewals and a 34% decline in games revenue from higher carryover in the prior year period.
In 2025, WBD distributed seven consecutive films that generated more than $40 million during their opening weekends at the domestic box office – a first for any studio – and finished the year with $4.4 billion at the global box office. The 2026 film slate includes “Supergirl,” “Dune: Messiah,” “Evil Dead Burn” and “The Cat in the Hat.”
Warner Bros. TV also has over 70 active series spanning 20 linear and streaming
platforms at the end of 2025. 2026 marks the first year that WBTV will deliver more episodes to streaming platforms than to broadcast and cable combined. Notable projects for third parties include Apple’s “Ted Lasso,” “Bad Monkey” and “Shrinking” and Netflix’s “Running Point.”
Looking ahead, WBD expects studios profit for 2026 to be relatively in line with 2025 despite its recent box office success and a sizable television licensing
deal renewal. The company also will invest for 2027 and beyond to support a more robust slate of theatrical and television titles, as well as the opening of the Harry Potter experience in Shanghai and Abu Dhabi, and the rebuilding of its video game pipeline.
WBD streaming and games president JB Perrette said 2025 was a “reset” for the games business and that it expects to see the benefits of its restructuring in 2027 and 2028.
“We really went back to the basics,” Perrette told analysts. “We had allowed ourselves to get distracted to going after too many IPs with a too broad a set of studios and the core of last year’s reset was around getting back to proven studios with proven games and proven players.”
In 2026, Warner Bros. Games will launch a new installment in its Lego Batman series in May and the new “Game of Thrones: Dragonfire” mobile game this summer.
Cord-cutting takes its toll
The global linear network division saw revenue fall 12% to $4.2 billion and profit plunge 27% to $1.4 billion.
Distribution revenue fell 8% to $2.4 billion, driven by a 10% decline in domestic pay TV subscribers that was offset by a 3% increase in domestic affiliate rates. Ad revenue fell 11% to $1.42 billion, driven by the absence of the NBA and a 22% decline in domestic audiences. Content revenue fell 31% to $311 million, due to the timing of third-party licensing deals.
In 2025, WBD’s domestic portfolio of networks attracted nearly 30% of
primetime cable viewership among adults ages 25 to 54 and reached a monthly average of more than 140 million total viewers. TNT, TBS, Food Network, CNN and TLC were five of the top ten ad-supported cable networks for the year.
CNN reached more than 800 million people globally with more than 150 million monthly users across platforms. The cable news network launched a direct-to-consumer paywall offering in 2024, which then expanded with the launch of its CNN All Access streaming product in the fourth quarter. The network is projected to reach $1.8 billion in revenue and $600 million in profit for 2026. WBD has also said that “new platform revenue” would account for $600 million of CNN’s revenue by 2030.
“We are encouraged by the early performance of CNN All Access and expect subscribers and engagement to continue to grow as we enter the midterm election cycle and look ahead to the 2028 presidential election,” the company said.
Looking ahead, WBD expects a 7% and 20% impact to ad revenue from the absence of the NBA in the first and second quarters, respectively, which it believes will be more than offset by an improvement in operating expenses. It also anticipates continued ad revenue growth in international markets across the Europe, Middle East and Africa region, including Poland and Italy.
Some of the cost savings from the NBA were reinvested in College
Football Playoff rights with coverage expanding to five of the 11 games starting in the fourth quarter. The company expects full-year cost of revenues to improve in the high single digit percentage range.
WBD Chief Financial Officer Gunnar Wiedenfels said the company would be disciplined in going after new sports rights.
“We’re not going to be doing deals that don’t make financial sense for us, but we’re open for business you will always see us involved in every process that’s ongoing,” he told analysts. “We’ll continue to be great partners. We’re very happy with the partnerships that we have and and there will certainly be continued appetite as we as we go forward, even after separation into Discovery Global.”
The TNT Sports app will launch later this year and will be available as a standalone option and through distribution and bundling partnerships.
A twisty M&A saga
The latest quarterly results come as WBD’s board re-engages with Paramount after it determined that Paramount CEO David Ellison’s latest $31-per-share offer could “reasonably be expected” to lead to a “superior proposal.”
The tenth bid includes a daily ticking fee equal to 25 cents per quarter beginning after Sept. 30, 2026. Paramount will also pay a $7 billion termination fee to WBD in the event the transaction does not close due to regulatory matters. It will also cover a $2.8 billion termination fee that WBD would be required to pay to Netflix and agreed to eliminate $1.5 billion in potential financing costs associated with WBD’s debt exchange offer.
Additionally, the proposal includes an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by Paramount’s lending banks and a “material adverse affect” definition that excludes the performance of WBD’s Global Linear Networks business.
WBD’s board has not determined whether the revised Paramount bid is superior to its $83 billion deal with Netflix. In the event that it does, Netflix will have four business days to match Paramount’s offer and negotiate with WBD to propose any revisions to its current deal. The Netflix deal remains in effect and the board is not withdrawing or modifying its recommendation.
Shareholders are set to vote on the Netflix deal on March 20 at 8 a.m. ET. Netflix has said it expects a deal to close within 12 to 18 months, while Paramount has argued a potential deal with Warner Bros. would close within a year.
