Warner Bros. Discovery reported a first-quarter net loss of $2.9 billion, significantly wider than the $453 million loss recorded in the same period last year.
The company attributed the result primarily to $1.3 billion in pre-tax acquisition-related amortization of intangibles, content fair value step-ups, and restructuring expenses, along with a $2.8 billion termination fee linked to a failed transaction involving Netflix.
Netflix had initially been connected to a proposed acquisition of WBD assets but withdrew after Paramount Skydance presented a higher offer. As a result, Paramount agreed to cover the termination fee as part of its broader agreement to acquire WBD, though the obligation remains on WBD’s books until the deal closes. The fee may also shift back to WBD under certain conditions, including if the transaction is terminated due to a superior bid.
The Paramount acquisition was approved by WBD shareholders in April and is currently undergoing regulatory review. Paramount has stated it has made substantial progress toward closing the deal, with completion expected in the third quarter.
Revenue for the quarter declined slightly by 1 percent year over year to $8.89 billion, while adjusted earnings before interest, taxes, depreciation, and amortization increased 5 percent to $2.2 billion. The company ended the quarter with $33.4 billion in gross debt.
Streaming remained a key growth area. Revenue rose 9 percent to approximately $2.89 billion, supported by international expansion of HBO Max and increased subscription revenue. Advertising revenue for the streaming segment increased 20 percent, driven by growth in the ad-supported tier.
WBD also surpassed its guidance of more than 140 million global streaming subscribers at the end of the quarter and remains on track to exceed 150 million subscribers by year-end.
The company’s linear TV networks, including CNN, TBS, and the Discovery Channel, continued to decline, with revenue falling 8 percent to $4.38 billion. Advertising revenue within the segment dropped 11 percent, largely due to the absence of NBA media rights.
The film studio division delivered strong performance, with revenue rising 35 percent year over year to $3.13 billion.
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