Key facts
- Warner Bros Discovery reported Q2 revenue of $8.72 billion, missing the $9.29 billion estimate.
- Studio revenue declined 39% due to weaker box office performance and fewer NBA games.
- Advertising revenue decreased by 22%.
- The company achieved a surprise quarterly profit of 6 cents per share.
- Streaming revenue grew by 10%.
- The proposed merger with Paramount faces antitrust challenges, with a trial set for March 2027.
Warner Bros Discovery reported second-quarter revenue of $8.72 billion, falling short of the $9.29 billion estimate. This miss was primarily attributed to a 39% slump in studio revenue and a 22% decrease in advertising revenue. The decline in studio revenue was linked to weaker box-office performance and the absence of NBA game broadcasts, while advertising revenue was impacted by lower domestic linear TV viewership.
Despite the revenue shortfall, the company achieved a surprise quarterly profit of 6 cents per share, surpassing analyst expectations of a loss. This positive result was driven by substantial operating expense reductions, including lower content spending and the absence of NBA rights costs. The streaming division demonstrated positive growth, with revenue climbing 10% due to international expansion and popular original content.
The company's proposed $110 billion merger with Paramount, intended to create a larger streaming entity to compete with rivals, is currently facing antitrust challenges. California and eleven other states have filed lawsuits to block the deal, with a federal trial scheduled for March 2027.