This afternoon, we issued our earnings release, shareholder letter, and trending schedule, and these materials can be found on our website at ir.wbd.com. More importantly, we are seeing healthy acceleration in subscriber-related revenue growth, which we expect will pick up real pace in Q2 and through the rest of the year. We believe the key to strong subscriber and subscriber-related revenue growth is delivering content that audiences love, boy, do they love what they're getting on HBO Max today. The work we've done to return our WB Studios to leadership has set the foundation for the company's next chapter.

We're seeing the benefits of the operating leverage that we have start to really kick in as the growth on profits is really starting to accelerate as we look throughout the year. I think, going forward, the great thing is, we still have multiple different levers of growth, Rich, to your point. You know, HBO Max is a global high-growth asset, is really the linchpin of our ability to have our ambition to split the company. and Casey and the whole team and the creative renaissance that went behind it, that is the leading growth asset at Warner Bros.

Increasingly, we're seeing very significant revenue contributions growing from international and in some cases more than 50% of revenue is coming out of streaming utilization of this content. The demand for this content and the viewer engagement is still there and continues to be a great business for us. As we think about studios, the guidance I think for adjusted EBITDA is relatively in line with 2025. Is there any good way for us to just think about the revenue or the EBITDA of the studio business excluding that?

What went well
  • Successfully launched HBO Max direct-to-consumer in four major new European markets (U.K., Germany, Italy, and Ireland), establishing direct audience relationships beyond the prior Sky licensing arrangement.
  • Meaningfully exceeded the guidance of over 140 million total subscribers by the end of Q1, with strong and accelerating momentum toward more than 150 million globally by year-end.
  • Delivered breakout HBO content, with the second season of The Pitt averaging more than 20 million viewers per episode and A Knight of the Seven Kingdoms reaching 36 million viewers per episode, among the most popular debut series in HBO history.
  • Warner Bros. won 11 Oscars at the Academy Awards, including a first Best Picture win in more than a decade for One Battle After Another, the most Oscars in the studio's 103-year history.
  • Streaming swung from losing over $2 billion to making $1.4 billion last year, with bottom-line growth now in increasing double digits and operating leverage starting to accelerate.
What went wrong
  • Separation- and transaction-related expenses (including the Netflix break fee that was not paid) continue to flow through the P&L below the line and weigh on free cash flow, with roughly $100 million in negative cash impact in Q1 and more expected through 2026.
  • Sports in a streaming context remains a hard equation to make profitable; management is still experimenting across markets to find a model that delivers engagement and subscribers while also being profitable.
  • Disruption in the linear television market continues to create well-known challenges for the global networks business.

Guidance Changes

MetricPeriodCurrent guidance
Total streaming subscribersFY2026 (year-end)More than 150 million globally by year-end
WB Studios adjusted EBITDAAnnual goalAt least $3 billion
Studio adjusted EBITDAFY2026Maintaining roughly in line with 2025 (an ambition for the team)
Free cash flow transaction/separation impactFY2026May not reach 2025 level but pretty close; ~$100 million negative through Q1

Performance Breakdown

MetricYoYNote
Overall networks Up significantly Focus on creating more content across sports, food, home and general entertainment; sports doing very well and CNN ratings up significantly.
Streaming profitability From -$2 billion historically to +$1.4 billion last year Global scaling of HBO Max, operating leverage from tech platform investments, and a stronger, more consistent content slate.
Networks EBITDA Down roughly in line with revenue Secular linear decline, partially offset by international share gains, streaming utilization of content, and continued efficiency management.

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
HBO Max as growth linchpinLosing over $2 billion as a subscale, primarily U.S. serviceEffectively a $4 billion turnaround and the leading global high-growth asset underpinning the company split and Paramount deal—
Bundling and consolidationNo bundled subscribers from other programmers three years agoBundles with Disney, RTL+ in Germany, Viu in Southeast Asia and LATAM; bundled subs are the highest-LTV cohort with strong churn benefits—
Sports in streamingPlaying in sports internationally for 15+ yearsDisciplined experimentation across markets (simulcast in U.S., standalone in U.K., bundled in Brazil/Mexico) to find a profitable model—
Scale strategyAggregating all content in one placeGlobal scale is key, but distributing content across HBO Max, AVOD, and channels in different markets captures more value than putting everything in one basket—

Q&A Summary

Where does HBO Max as a business and product stand today now that global rollouts are complete, and what is WBD's perspective on sports in streaming versus Disney's view?
J.B. Perrette said HBO Max has gone from mid-90 million subs to having added almost 50 million over the four-year journey, with the best engagement and churn metrics seen in four years and multiple remaining growth levers (nascent big markets, stronger slates, 10 years of Potter, wholesale-to-retail migration, nascent international ad sales). On sports, WBD knows its power but wants to prove it can be done profitably in streaming, so it is running disciplined experiments across markets rather than committing to one model.
How will the pay-TV landscape evolve with YouTube TV sports and cord-cutting, and what are the latest views on the power of a global scaled streaming service?
David Zaslav said the consumer experience of 15-20 apps will get restructured, creating value for emerging leaders; bundling (as seen with Disney) lowers churn and improves economics, and Paramount coming together with WBD fits that vein. J.B. added bundled subscribers are the highest-LTV cohort, beneficial to marketing expense and churn. Gunnar noted WBD no longer views linear networks as linear, with significant and growing revenue from international and streaming utilization of that content.
On studios, why is 2026 adjusted EBITDA guidance roughly in line with strong 2025, how should internal licensing be thought about, and can networks hold EBITDA at or better than the top-line pace?
Gunnar said it doesn't make sense to exclude internal content sales because the company uses an internal fair-market-value model; the shift to internal utilization parked eliminated profits on the balance sheet that are now bleeding back into consolidated profits. Maintaining 2025's strong studio profit is a healthy ambition, helped by growing experiences/consumer products (Potter Tour Tokyo, Shanghai). On networks, he declined specific long-term guidance but cited encouraging international share gains, monetization shift, efficiency focus, and AI as an emerging contributor.
Is there an asymptote to scale benefits as the company grows, and are there spin-related costs in the P&L?
Zaslav said more scale of great content is valuable, but aggregating everything in one place isn't always best; the biggest scale advantage is being global, as regional-only players find it harder to compete against global platforms. J.B. said WBD is in the early innings (five to six years versus 15-20 for mature peers) with significant operating-leverage runway. Gunnar said some separation-related expenses still flow below the line with marginal EBITDA impact, but free cash flow will see continued negative impact in 2026 from advisory fees, bridge interest, and tax leakage (~$100 million through Q1).

More on Warner Bros. Discovery, Inc.

Reported 2026-05-06 · figures from the Warner Bros. Discovery, Inc. Q1 2026 earnings call.

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