Warner Bros. Discovery (WBD) reported a $2.9 billion net loss for the first quarter, driven by restructuring costs and a $2.8 billion termination fee paid to Netflix after its deal collapsed. The loss, though steep, was partially offset by 9% growth in streaming revenue and a 20% increase in ad-supported tier revenue. The company also noted $1.3 billion in acquisition-related expenses, including intangible amortization and content valuation adjustments.
Paramount’s pending acquisition of WBD, approved by shareholders in April, remains under regulatory review and is expected to close in the third quarter. The deal includes Paramount covering the Netflix termination fee, though WBD retains the obligation if the merger falls through. WBD’s revenue declined 1% year-over-year to $8.89 billion, while adjusted EBITDA rose 5% to $2.2 billion. The company’s $33.4 billion in gross debt remains a key financial challenge.
Streaming highlights included the international expansion of HBO Max, with launches in Germany, Italy, Britain, and Ireland. Advertising revenue for streaming surged 20%, and subscriber revenue grew due to global market penetration. WBD emphasized its focus on scaling HBO Max, revitalizing its studios, and optimizing linear networks as it prepares for the Paramount merger.