What Management Said
Read the full Q3 2025 transcript ↗This morning, we issued our Q3 earnings release, shareholder letter, and trending schedule, and these materials can be found on our website at www.wbd.com. Not only are we in first place, but we are the only film studio to have crossed $4 billion in 2025 box office revenue thus far. Based on our results to date, we expect our studios to meaningfully exceed $2.4 billion in EBITDA this year, and we are making strong progress towards our $3 billion EBITDA goal. Our streaming segment will contribute more than $1.3 billion in EBITDA to our bottom line this year, versus losing $2.5 billion three years ago.
This is further evidence that in its long history, HBO has never delivered a steadier, more consistent pipeline of titles that subscribers circle in their calendars to watch. We're going to begin to see some real benefits from the transition off of the NBA towards a portfolio of other rights that we acquired. That'll be the case if, in fact, HBO Max goes ahead and splits as planned, or if Warner is acquired as Warner. Obviously, if the company is acquired in whole, then they'll have access to everything.
Any updated thoughts on how HBO Max's scale is able to best compete with the other larger SVOD platforms and how that will translate into streaming revenue growth maybe accelerating next year? Our marketing content and product improvements give us a lot of confidence that we can continue to see great penetration and growth as we scale. We have good visibility towards both revenue and the scaling of subscribers in that time. 2026 should be for us the biggest year of growth that we have seen in a long time for HBO Max.
What went well
- Warner Bros. led the 2025 box office domestically, internationally, and globally, becoming the only film studio to cross $4 billion in 2025 box office revenue thus far, on the strength of Superman, Weapons, The Conjuring: Last Rites, and One Battle After Another.
- Warner Bros. Television won 14 Emmy Awards including Outstanding Drama Series for The Pitt and nine Emmy wins for The Penguin, and HBO was recognized with 30 Emmy Awards, tied for the most of any network or platform.
- Studios are expected to meaningfully exceed $2.4 billion in EBITDA this year, with strong progress toward the $3 billion EBITDA goal.
- The streaming segment will contribute more than $1.3 billion in EBITDA this year, versus a $2.5 billion loss three years ago, having added more than 30 million subscribers in three years.
- It: Welcome to Derry posted the third most-watched HBO series premiere ever (behind only The Last of Us and House of the Dragon), watched by almost 15 million viewers in its first week.
What went wrong
- The headwinds facing the linear television business remain well understood and persistent, even as management emphasized the resilience of those networks.
- U.S. streaming ARPU faces pressure for the next three quarters due to a reset of an affiliated-party transaction back to market rates and the ramp of the lower-priced ad-supported SKU.
- Linear affiliate increases (around 2%) and subscriber decline rates appear less favorable than some peers, reflecting a transition period with greater flexibility given in recent renewals.
- In the U.S., sports did not provide enough incremental subscriber value for HBO Max, leading to a separate standalone sports app strategy domestically.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Studios EBITDA | FY2025 | Meaningfully exceed $2.4 billion |
| Studios EBITDA | Goal | $3 billion, then a real growth rate off that base |
| Streaming segment EBITDA | FY2025 | More than $1.3 billion (vs. -$2.5 billion three years ago) |
| Total streaming subscribers | End of 2026 | More than 150 million |
| U.S. streaming ARPU | Next three quarters / H2 2026 | Pressure for next three quarters, then returning to growth in the back half of 2026 |
| Sports rights cost transition benefit | FY2026 | Hundreds of millions of dollars of benefit from the NBA transition |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Global box office | Number one domestically, internationally, and globally | Strong original and franchise slate (Superman, Weapons, The Conjuring: Last Rites, One Battle After Another); only studio over $4 billion in 2025 box office thus far. |
| Streaming segment EBITDA | From -$2.5 billion to +$1.3 billion over three years | Global HBO Max scaling, more than 30 million added subscribers, and quality-driven content differentiation. |
| Linear distribution | ~2% affiliate increases; higher subscriber decline rates | Transition period in 2025 with greater renewal flexibility given across the industry; expected to benefit trajectory near-to-midterm. |
| U.S. streaming ARPU | Pressure | Reset of affiliated-party transaction back to market rates plus ramp of the lower-priced ad-supported SKU. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Sports in streaming (U.S. vs. international) | Sports bundled into HBO Max | Standalone sports app in U.S. (HBO Max stops utilizing streaming rights post-spin), while internationally sports stays on HBO Max or as an add-on | — |
| Library monetization | Heavily external content licensing | Shifted to internal utilization, eliminating roughly $5 billion of intercompany profits parked on the balance sheet that will bleed back into the business | — |
| Streaming standalone apps strategy | Trend toward consolidating apps | CNN and TNT Sports apps as skins/modules on the same platform with limited incremental cost, offering sports as a buy-through | — |
| Franchise management | Disconnect across teams (e.g., consumer products learning of release-date changes from the news) | Dedicated team coordinating franchises (Harry Potter, DC, Game of Thrones, Hanna-Barbera, Looney Tunes) across all monetization forms | — |
Q&A Summary
How do you think about mining the deep library, what's in Discovery Global Networks, and how do you feel about the sports portfolio and opportunities to strengthen it?
Gunnar said WBD feels very good about its sports portfolio composition and will see hundreds of millions of dollars of benefit next year from transitioning off the NBA to other acquired rights, while remaining disciplined; the standalone sports app is progressing for the U.S. market post-spin. On the library, he cited tens of thousands of hours reaching more than a billion people, with thousands of hours added yearly from free-to-air, to be a focus area for Discovery Global. Zaslav and J.B. noted HBO Max retains access to the best Discovery Global content domestically and internationally even after separation.
What is the rationale behind separate CNN and TNT Sports streaming apps rather than licensing, and why are linear affiliate increases lower and subscriber declines higher than peers?
Zaslav highlighted CNN's standalone product, built by Mark Thompson's team (including New York Times hires), as a compelling, globally scalable, trusted news offering that could also be bundled. Gunnar clarified the apps are skins/modules on the same platform with very limited incremental operating cost, and that offering sports as a buy-through drives greater commercial success. On distribution, he said 2025 is a transition period with greater renewal flexibility across the industry, and he expects a slightly better trajectory near-to-midterm.
What gives you confidence to gain global scale with HBO Max ahead of the next international launches, and how should you balance investing in new IP versus franchises?
Zaslav described HBO Max's differentiated, highest-quality positioning combining the largest film/TV library, original content, and (internationally) local sport and content. J.B. cited data points like the Australian launch where licensed content performance gives high confidence for the U.K., Germany, and Italy, plus a strengthening slate into a decade of Harry Potter; he expects 2026 to be the biggest year of growth for HBO Max in a long time, with much of the 150 million subscriber path already locked via partnerships.
How do you bridge from 2025 studio profitability to the $3 billion EBITDA ambition, and are there tax implications if the separation structure changes (selling Warner Bros. and spinning Discovery Global)?
Gunnar said the answer on tax-free risk is no and declined more color on the process. Zaslav explained the bridge: a four-part studio strategy using tentpoles (Lord of the Rings, Batman, Superman) and mini-tentpoles (Gremlins, Goonies, Practical Magic) plus original content, New Line horror, DC under Gunn and Safran, the largest TV/motion picture library, experiences and merchandising, and over 80 shows in production. Gunnar added the shift to internal library monetization has eliminated intercompany profits now set to support future profitability.
More on Warner Bros. Discovery, Inc.
Reported 2025-11-06 · figures from the Warner Bros. Discovery, Inc. Q3 2025 earnings call.
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