Open the filing on EDGARWarner Bros. Discovery Reports Fourth-Quarter and Full-Year 2025 Results Three Months Ended December 31, Twelve Months Ended December 31, 2025 2024 % Change 2025 2024 % Change $ in millions Reported Ex-FX(*) Reported Ex-FX(*) Distribution $ 4,789 $ 4,917 (3) % (3) % $ 19,262 $ 19,701 (2) % (2) % Advertising 1,703 1,830 (7) % (9) % 7,306 8,090 (10) % (11) % Content 2,661 2,909 (9) % (10) % 9,647 10,297 (6) % (7) % Other 307 371 (17) % (21) % 1,081 1,233 (12) % (15) % Total revenues $ 9,460 $ 10,027 (6) % (7) % $ 37,296 $ 39,321 (5) % (5) % Net (loss) income available to Warner Bros. Discovery, Inc. (252) (494) (49) % NM 727 (11,311) NM NM Adjusted EBITDA(*) 2,216 2,722 (19) % (20) % 8,744 9,032 (3) % (3) % Cash provided by operating activities 1,804 2,715 (34) % 4,319 5,375 (20) % Free cashflow(*) 1,383 2,429 (43) % 3,088 4,427 (30) % NM - Not Meaningful (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details.
Q4 2025 Highlights
- Total revenues were $9.5 billion, a 7% ex-FX(1) decrease from the prior year quarter.
- Distribution revenues decreased 3% ex-FX, as dynamic underlying growth in global streaming subscribers was more than offset by continued domestic linear pay TV subscriber declines and the impact of the HBO Max domestic distribution deal renewal with a former related party previously disclosed in Q2.
- Advertising revenues decreased 9% ex-FX, as ad-lite streaming subscriber growth was more than offset by domestic linear audience declines. The absence of the NBA in the current year negatively impacted the year-over-year growth rate by 4% ex-FX.
- Content revenues decreased 10% ex-FX, primarily driven by lower content sales due to the timing of renewals at the Studios and Global Linear Networks segments.
- Net loss available to Warner Bros. Discovery, Inc. was $252.0 million, which includes $1.3 billion of pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses.
- Total Adjusted EBITDA(2)(*) was $2.2 billion, a 20% ex-FX decrease compared to the prior year quarter, primarily driven by a decline in the Global Linear Networks segment.
- Cash provided by operating activities was $1.8 billion. Free cashflow(3)(*) was $1.4 billion. Free cashflow was unfavorably impacted by approximately $600 million of separation & transaction related items.
- Ended the quarter with 131.6 million streaming subscribers(4), an increase of 3.5 million subscribers vs. Q3. FY 2025 Highlights
- Total revenues were $37.3 billion, a 5% ex-FX decrease from the prior year.
- Distribution revenues decreased 2% ex-FX, as dynamic underlying growth in global streaming subscribers was more than offset by continued domestic linear pay TV subscriber declines and the impact of the HBO Max domestic distribution deal renewal with a former related party previously disclosed in Q2.
- Advertising revenues decreased 11% ex-FX, as ad-lite streaming subscriber growth was more than offset by domestic linear audience declines.
- Content revenues decreased 7% ex-FX, primarily driven by the sublicensing of Olympic sports rights to broadcast networks throughout Europe in the prior year partially offset by the stronger performance of the theatrical releases in the current year.
- Net income available to Warner Bros. Discovery, Inc. was $727.0 million, which includes $5.8 billion of pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses.
- Total Adjusted EBITDA was $8.7 billion, a 3% ex-FX decrease compared to the prior year, primarily due to a decline in the Global Linear Networks segment partially offset by growth in the Streaming and Studios segments.
- Cash provided by operating activities was $4.3 billion. Free cashflow was $3.1 billion. Free cashflow was unfavorably impacted by approximately $1,350 million of separation & transaction related items.
- Ended the year with $29.0 billion of net debt(5)(*) and 3.3x net leverage(6)(*). Q4 2025 Earnings Press Release | February 26, 2026
Summary Segment Financial Information Revenues Three Months Ended December 31, Twelve Months Ended December 31, 2025 2024 % Change 2025 2024 % Change $ in millions Reported Ex-FX(*) Reported Ex-FX(*) Streaming $ 2,794 $ 2,651 5 % 4 % $ 10,876 $ 10,313 5 % 5 % Studios 3,183 3,657 (13) % (14) % 12,619 11,607 9 % 8 % Streaming & Studios eliminations (426) (971) NM NM (3,124) (2,129) NM NM Streaming & Studios(7) 5,551 5,337 4 % 3 % 20,371 19,791 3 % 3 % Global Linear Networks 4,196 4,768 (12) % (13) % 17,656 20,175 (12) % (13) % Corporate - 2 NM NM 2 8 (75) % (75) % Other inter-segment eliminations (287) (80) NM NM (733) (653) NM NM Total revenues $ 9,460 $ 10,027 (6) % (7) % $ 37,296 $ 39,321 (5) % (5) % (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details. Adjusted EBITDA Three Months Ended December 31, Twelve Months Ended December 31, 2025 2024 % Change 2025 2024 % Change $ in millions Reported Ex-FX(*) Reported Ex-FX(*) Streaming $ 393 $ 409 (4) % (7) % $ 1,370 $ 677 102 % 115 % Studios 728 950 (23) % (27) % 2,545 1,652 54 % 52 % Streaming & Studios eliminations 37 (266) NM NM (419) (202) NM NM Streaming & Studios(7) 1,158 1,093 6 % 2 % 3,496 2,127 64 % 66 % Global Linear Networks 1,405 1,917 (27) % (27) % 6,412 8,149 (21) % (21) % Corporate (289) (333) 13 % 16 % (1,096) (1,260) 13 % 15 % Other inter-segment eliminations (58) 45 NM NM (68) 16 NM NM Total Adjusted EBITDA $ 2,216 $ 2,722 (19) % (20) % $ 8,744 $ 9,032 (3) % (3) % (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details. Q4 2025 Earnings Press Release | February 26, 2026
Streaming Segment Three Months Ended December 31, Twelve Months Ended December 31, 2025 2024 % Change 2025 2024 % Change $ in millions Reported Ex-FX(*) Reported Ex-FX(*) Distribution $ 2,388 $ 2,315 3 % 2 % $ 9,444 $ 9,022 5 % 5 % Advertising 278 235 18 % 17 % 1,032 855 21 % 20 % Subscriber-related revenues(*) 2,666 2,550 5 % 4 % 10,476 9,877 6 % 6 % Content 119 99 20 % 18 % 388 428 (9) % (10) % Other 9 2 NM NM 12 8 50 % 50 % Total revenues 2,794 2,651 5 % 4 % 10,876 10,313 5 % 5 % Costs of revenues (excluding depreciation & amortization) 1,875 1,760 7 % 7 % 7,401 7,459 (1) % (1) % Selling, general and administrative 526 482 9 % 7 % 2,105 2,177 (3) % (4) % Adjusted EBITDA $ 393 $ 409 (4) % (7) % $1,370 $677 102 % 115 % In millions Q4 2025 Q3 2025 Q4 2024 ARPU in $ Q4 2025 Q3 2025 Q4 2024 Domestic subscribers 59.2 58.0 57.1 Domestic ARPU $ 10.45 $ 10.40 $ 11.77 International subscribers 72.4 70.0 59.8 International ARPU $ 4.00 $ 3.70 $ 3.74 Global streaming subscribers 131.6 128.0 116.9 Global ARPU $ 6.80 $ 6.64 $ 7.44 (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details. Domestic includes the U.S. and Canada. Subscriber counts in the above table are rounded and minor differences in totals may exist.
Q4 2025 Highlights
- Global streaming subscribers were 131.6 million, an increase of 3.5 million global subscribers vs. Q3.
- Streaming revenues increased 4% ex-FX to $2,794 million compared to the prior year quarter. Subscriber-related revenues(8)(*) increased 4% ex-FX compared to the prior year quarter.
- Distribution revenue increased 2% ex-FX, as a result of a 13% increase in subscribers following the continued growth and global expansion of HBO Max, including new distribution deals, partially offset by the domestic distribution deal renewal with a former related party previously disclosed in Q2.
- Advertising revenue increased 17% ex-FX, primarily driven by an increase in ad-lite subscribers, partially offset by the absence of the NBA in the current year quarter. The absence of the NBA in the current year negatively impacted the year-over-year growth rate by 3% ex-FX.
- Global streaming ARPU(9) decreased 9% ex-FX to $6.80, primarily attributable to a 11% decrease in domestic streaming ARPU to $10.45 and growth in lower ARPU international markets. The decrease in domestic streaming ARPU was primarily driven by the impact of the domestic distribution deal renewal with a former related party previously disclosed in Q2.
- Content revenue increased 18% ex-FX, driven by the timing of domestic third-party content sales partially offset by lower international third-party licensing as a result of the launch of HBO Max in new international markets.
- Streaming operating expenses increased 7% ex-FX to $2,401 million compared to the prior year quarter.
- Costs of revenues increased 7% ex-FX primarily driven by higher content costs to support the global expansion of HBO Max and the timing of programming releases.
- SG&A increased 7% ex-FX, largely due to higher marketing costs.
- Streaming Adjusted EBITDA decreased 7% ex-FX to $393 million compared to the prior year quarter. Q4 2025 Earnings Press Release | February 26, 2026
Studios Segment Three Months Ended December 31, Twelve Months Ended December 31, 2025 2024 % Change 2025 2024 % Change $ in millions Reported Ex-FX(*) Reported Ex-FX(*) Distribution $ 4 $ (6) NM NM $ 8 $ 8 - % - % Advertising - - NM NM 1 5 (80) % (80) % Content 2,899 3,394 (15) % (16) % 11,740 10,717 10 % 9 % Other 280 269 4 % - % 870 877 (1) % (3) % Total revenues 3,183 3,657 (13) % (14) % 12,619 11,607 9 % 8 % Costs of revenues (excluding depreciation & amortization) 1,872 2,174 (14) % (14) % 7,397 7,530 (2) % (2) % Selling, general and administrative 583 533 9 % 8 % 2,677 2,425 10 % 10 % Adjusted EBITDA $ 728 $ 950 (23) % (27) % $ 2,545 $ 1,652 54 % 52 % (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details. Q4 2025 Highlights
- Studios revenues decreased 14% ex-FX to $3,183 million compared to the prior year quarter.
- Content revenue decreased 16% ex-FX.
- Theatrical revenue decreased 11% ex-FX, as a result of lower content sales and lower box office revenues due to no releases in the current year quarter.
- TV revenue decreased 18% ex-FX, primarily driven by the timing of intersegment content renewals.
- Games revenue decreased 34% ex-FX, primarily driven by higher carryover in the prior year quarter.
- Studios operating expenses decreased 10% ex-FX to $2,455 million compared to the prior year quarter.
- Costs of revenues decreased 14% ex-FX.
- Theatrical content expense decreased 6% ex-FX due to lower box office revenues.
- TV content expense decreased 18% ex-FX primarily driven by the timing of intersegment content renewals.
- Games content expense decreased 46% ex-FX, primarily driven by higher carryover and $50 million of impairments in the prior year quarter.
- SG&A increased 8% ex-FX, driven by higher overhead costs partially offset by lower theatrical marketing.
- Studios Adjusted EBITDA decreased 27% ex-FX to $728 million compared to the prior year quarter. Q4 2025 Earnings Press Release | February 26, 2026
Global Linear Networks Segment Three Months Ended December 31, Twelve Months Ended December 31, 2025 2024 % Change 2025 2024 % Change $ in millions Reported Ex-FX(*) Reported Ex-FX(*) Distribution $ 2,397 $ 2,610 (8) % (8) % $ 9,819 $ 10,680 (8) % (8) % Advertising 1,435 1,615 (11) % (14) % 6,332 7,306 (13) % (14) % Content 311 452 (31) % (32) % 1,195 1,848 (35) % (35) % Other 53 91 (42) % (45) % 310 341 (9) % (11) % Total revenues 4,196 4,768 (12) % (13) % 17,656 20,175 (12) % (13) % Costs of revenues (excluding depreciation & amortization) 2,040 2,150 (5) % (6) % 8,479 9,238 (8) % (8) % Selling, general and administrative 751 701 7 % 5 % 2,765 2,788 (1) % (2) % Adjusted EBITDA $ 1,405 $ 1,917 (27) % (27) % $ 6,412 $ 8,149 (21) % (21) % (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details. Q4 2025 Highlights
- Global Linear Networks revenues decreased 13% ex-FX to $4,196 million compared to the prior year quarter.
- Distribution revenue decreased 8% ex-FX, primarily driven by a 10% decrease in domestic linear pay TV subscribers, partially offset by a 3% increase in domestic affiliate rates.
- Advertising revenue decreased 14% ex-FX, primarily driven by domestic audience declines of 22% and the absence of the NBA in the current year. The absence of the NBA in the current year negatively impacted the year-over-year growth rate by 4% ex-FX.
- Content revenue decreased 32% ex-FX, primarily due to the timing of third-party licensing deals.
- Global Linear Networks operating expenses decreased 2% ex-FX to $2,791 million compared to the prior year quarter.
- Costs of revenues decreased 6% ex-FX, primarily driven by the absence of the NBA in the current year quarter, partially offset by higher domestic sports costs.
- SG&A increased 5% ex-FX, primarily driven by higher marketing costs.
- Global Linear Networks Adjusted EBITDA decreased 27% ex-FX to $1,405 million compared to the prior year quarter. Q4 2025 Earnings Press Release | February 26, 2026
Corporate Three Months Ended December 31, Twelve Months Ended December 31, 2025 2024 % Change 2025 2024 % Change $ in millions Reported Ex-FX(*) Reported Ex-FX(*) Adjusted EBITDA $ (289) $ (333) 13 % 16 % $ (1,096) $ (1,260) 13 % 15 % (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details.
- Corporate Adjusted EBITDA improved by $44 million, primarily driven by lower corporate overhead costs. Inter-segment Eliminations Three Months Ended December 31, Twelve Months Ended December 31, $ in millions 2025 2024 2025 2024 Total revenue eliminations $ (713) $ (1,051) $ (3,857) $ (2,782) Total expense eliminations (692) (830) (3,370) (2,596) Adjusted EBITDA $ (21) $ (221) $ (487) $ (186) Leverage and Liquidity
- Ended Q4 with $4.6 billion of cash on hand, $33.5 billion of gross debt(10)(*), and 3.3x net leverage(6)(*).
- The Company repaid $1.0 billion of the bridge loan facility during the fourth quarter.
- As of December 31, 2025, the weighted average maturity of the Company's outstanding debt was 5.9 years with a weighted average cost of 5.8%. Excluding the bridge loan facility, the weighted average maturity of the Company’s outstanding debt was 10.0 years with a weighted average cost of 4.5%.
- As of December 31, 2025, the Company’s $4.0 billion revolving credit facility was undrawn.
- On February 18, 2026, the Company extended the maturity on the bridge loan facility to the earlier of June 30, 2027 and the date of the separation. Free Cash Flow Three Months Ended December 31, Twelve Months Ended December 31, $ in millions 2025 2024 % Change 2025 2024 % Change Cash provided by operating activities $ 1,804 $ 2,715 (34) % $ 4,319 $ 5,375 (20) % Purchases of property and equipment (421) (286) 47 % (1,231) (948) (30) % Free cashflow(*) $ 1,383 $ 2,429 (43) % $ 3,088 $ 4,427 (30) % (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details.
- Q4 2025 cash provided by operating activities decreased to $1,804 million from $2,715 million in the prior year quarter. Free cashflow(3)(*) decreased to $1,383 million from $2,429 million, primarily driven by approximately $600 million of separation & transaction related items, lower Adjusted EBITDA, and timing of working capital, partially offset by the timing of net content investment.
- As of December 31, 2025, the Company had $3,700 million drawn on its revolving receivables program, a $304 million decrease vs. Q3 and a $937 million decrease year-over-year. Q4 2025 Earnings Press Release | February 26, 2026
Warner Bros. Discovery, Inc. Consolidated Statements of Operations Three Months Ended December 31, Twelve Months Ended December 31, Unaudited; in millions, except per share amounts 2025 2024 2025 2024 Distribution $ 4,789 $ 4,917 $ 19,262 $ 19,701 Advertising 1,703 1,830 7,306 8,090 Content 2,661 2,909 9,647 10,297 Other 307 371 1,081 1,233 Total revenues 9,460 10,027 37,296 39,321 Costs of revenues, excluding depreciation and amortization 5,223 5,527 20,885 22,970 Selling, general and administrative 2,386 2,218 9,418 9,296 Depreciation and amortization 1,315 1,643 5,684 7,037 Restructuring and other charges 177 286 399 447 Impairments and loss on dispositions 10 191 172 9,603 Total costs and expenses 9,111 9,865 36,558 49,353 Operating income (loss) 349 162 738 (10,032) Interest expense, net (584) (490) (2,085) (2,017) (Loss) gain on extinguishment of debt, net (8) 42 2,945 632 Income (loss) from equity investees, net (39) (32) (24) (121) Other income (expense), net (126) (38) 65 150 Income (loss) before income taxes (408) (356) 1,639 (11,388) Income tax (expense) benefit 161 (284) (890) (94) Net (loss) income (247) (640) 749 (11,482) Net income attributable to noncontrolling interests (5) 149 (24) 129 Net loss (income) attributable to redeemable noncontrolling interests - (3) 2 42 Net (loss) income available to Warner Bros.
Discovery, Inc. $ (252) $ (494) $ 727 $ (11,311) Net (loss) income per share available to Warner Bros. Discovery, Inc. Series A common stockholders: Basic $ (0.10) $ (0.20) $ 0.29 $ (4.62) Diluted $ (0.10) $ (0.20) $ 0.29 $ (4.62) Weighted average shares outstanding: Basic 2,481 2,454 2,475 2,450 Diluted 2,481 2,454 2,530 2,450 Q4 2025 Earnings Press Release | February 26, 2026
Warner Bros. Discovery, Inc. Consolidated Balance Sheets Unaudited; in millions, except par value December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 4,566 $ 5,312 Receivables, net 5,294 4,947 Prepaid expenses and other current assets 3,346 3,819 Total current assets 13,206 14,078 Film and television content rights and games 19,114 19,102 Property and equipment, net 6,685 6,087 Goodwill 25,933 25,667 Intangible assets, net 27,764 32,299 Other noncurrent assets 7,383 7,327 Total assets $ 100,085 $ 104,560 Liabilities and equity Current liabilities: Accounts payable $ 1,093 $ 1,055 Accrued liabilities 9,626 10,438 Deferred revenues 1,642 1,569 Current portion of debt 139 2,748 Total current liabilities 12,500 15,810 Noncurrent portion of debt 32,428 36,757 Deferred income taxes 6,383 6,985 Other noncurrent liabilities 11,608 10,070 Total liabilities 62,919 69,622 Commitments and contingencies Redeemable noncontrolling interests 19 109 Warner Bros.
Discovery, Inc. stockholders’ equity: Series A common stock: $0.01 par value; 10,800 and 10,800 shares authorized; 2,710 and 2,684 shares issued; and 2,480 and 2,454 shares outstanding 27 27 Preferred stock: $0.01 par value; 1,200 and 1,200 shares authorized, 0 shares issued and outstanding - - Additional paid-in capital 56,055 55,560 Treasury stock, at cost: 230 and 230 shares (8,244) (8,244) Accumulated deficit (11,512) (12,239) Accumulated other comprehensive loss (407) (1,067) Total Warner Bros. Discovery, Inc. stockholders’ equity 35,919 34,037 Noncontrolling interests 1,228 792 Total equity 37,147 34,829 Total liabilities and equity $ 100,085 $ 104,560 Q4 2025 Earnings Press Release | February 26, 2026
Warner Bros. Discovery, Inc. Consolidated Statements of Cash Flows Twelve Months Ended December 31, Unaudited; in millions 2025 2024 Operating Activities Net income (loss) $ 749 $ (11,482) Adjustments to reconcile net income to cash provided by operating activities: Content rights amortization and impairment 11,855 13,946 Content restructuring impairments and write-offs - 165 Depreciation and amortization 5,684 7,037 Deferred income taxes (710) (1,732) Equity in losses of equity method investee companies and cash distributions 75 167 Gain on extinguishment of debt (2,945) (632) Share-based compensation expense 769 557 Impairments and loss on dispositions 172 9,603 Gain from derivative instruments, net (93) (16) Gain on sale of investments (4) (227) Other, net 69 115 Changes in operating assets and liabilities, net of acquisitions and dispositions: Receivables, net (336) 1,012 Film and television content rights, games, and production payables, net (11,401) (12,349) Accounts payable, accrued liabilities, deferred revenues and other noncurrent liabilities 108 (529) Foreign currency, prepaid expenses and other assets, net 327 (260) Cash provided by operating activities 4,319 5,375 Investing Activities Purchases of property and equipment (1,231) (948) Investments in and advances to equity investments (100) (109) Proceeds from sales of investments 54 541 Proceeds from derivative instruments, net 26 136 Other investing activities, net 72 31 Cash used in investing activities (1,179) (349) Financing Activities Principal repayments of debt, including premiums and discounts to par value (22,664) (5,043) Borrowings from debt, net of discount and issuance costs 18,306 1,617 Distributions to noncontrolling interests and redeemable noncontrolling interests (198) (193) Proceeds from the formation of music catalog joint venture and other joint ventures 633 - Principal repayments of finance and other lease obligations (202) (142) Borrowings under commercial paper program and revolving credit facility 4,228 14,203 Repayments under commercial paper program and revolving credit facility (4,228) (14,203) Other financing activities, net (115) 12 Cash used in financing activities (4,240) (3,749) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 254 (180) Net change in cash, cash equivalents, and restricted cash (846) 1,097 Cash, cash equivalents, and restricted cash, beginning of period 5,416 4,319 Cash, cash equivalents, and restricted cash, end of period $ 4,570 $ 5,416 Q4 2025 Earnings Press Release | February 26, 2026
Reconciliation of Net (Loss) Income to Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization Three Months Ended December 31, Twelve Months Ended December 31, Unaudited; in millions 2025 2024 2025 2024 Net (loss) income available to Warner Bros. Discovery, Inc. $ (252) $ (494) $ 727 $ (11,311) Net income attributable to redeemable noncontrolling interests - 3 (2) (42) Net income attributable to noncontrolling interests 5 (149) 24 (129) Income tax expense (benefit) (161) 284 890 94 Income (loss) before income taxes (408) (356) 1,639 (11,388) Other expense (income), net 126 38 (65) (150) (Income) loss from equity investees, net 39 32 24 121 Loss (gain) on extinguishment of debt 8 (42) (2,945) (632) Interest expense, net 584 490 2,085 2,017 Operating Income 349 162 738 (10,032) Depreciation and amortization 1,315 1,643 5,684 7,037 Impairment and amortization of fair value step-up for content 77 226 784 1,139 Restructuring and other charges 177 286 399 447 Employee share-based compensation 218 134 751 546 Transaction and integration costs 58 77 166 242 Impairments and loss on dispositions 10 191 172 9,603 Amortization of capitalized interest for content 12 8 40 46 Facility consolidation costs - (5) 10 4 Adjusted EBITDA(*) $ 2,216 $ 2,722 $ 8,744 $ 9,032 (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details Q4 2025 Earnings Press Release | February 26, 2026
Supplemental Data for Results of Operations Supplemental Consolidating Data Streaming & Global Linear Consolidating For the three months ended December 31, Consolidated Studios Networks Corporate Adjustments $ in millions 2025 2024 2025 2024 2 2025 2024 2025 2024 2025 2024 Distribution $ 4,789 $ 4,917 $ 2,392 $ 2,309 $ 2,397 $ 2,610 $ - $ - $ - $ (2) Advertising 1,703 1,830 278 234 1,435 1,615 - - (10) (19) Content 2,661 2,909 2,626 2,514 311 452 - - (276) (57) Other 307 371 255 280 53 91 - 2 (1) (2) Total revenues 9,460 10,027 5,551 5,337 4,196 4,768 - 2 (287) (80) Costs of revenues (excluding depreciation & amortization) 5,223 5,527 3,369 3,341 2,040 2,226 30 24 (216) (64) Selling, general and administrative 2,386 2,218 1,108 1,008 749 700 537 524 (8) (14) Depreciation and amortization 1,315 1,643 518 577 690 967 107 99 - - Restructuring and other charges 177 286 19 233 12 27 146 26 - - Impairments and loss on dispositions 10 191 9 50 (2) (5) 3 146 - - Total Costs and Expenses 9,111 9,865 5,023 5,209 3,489 3,915 823 819 (224) (78) Operating income (loss) $ 349 $ 162 $ 528 $ 128 $ 707 $ 853 $ (823) $ (817) $ (63) $ (2) Q4 2025 Earnings Press Release | February 26, 2026
2026 Outlook Warner Bros. Discovery, Inc. ("Warner Bros. Discovery", "WBD", the "Company", "we", "us", or "our" ) may provide forward-looking commentary in connection with this earnings announcement on its quarterly earnings conference call.
Details on how to access the audio webcast are included below. Q4 2025 Prepared Earnings Remarks Conference Call Information In conjunction with this release, Warner Bros. Discovery will post a Shareholder Letter and host a conference call today, February 26, 2026 at 8:00 a.m.
ET, to discuss its fourth quarter 2025 financial results. To access the Shareholder Letter and webcast of the earnings call, please visit the Investor Relations section of the Company's website at www.wbd.com. Cautionary Statement Concerning Forward-Looking Statements Information set forth in this communication constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, without limitation, statements regarding the Company’s expectations, beliefs, intentions or strategies regarding the future, and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “should,” “will” and “would” or similar words. These forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties and on information available to Warner Bros. Discovery as of the date hereof.
Forward-looking statements notice
Forward-looking statements include, without limitation, statements about the benefits of the planned separation or the proposed transaction between WBD and Netflix, Inc. (the “proposed transaction”), future financial and operating results, in the case of a separation, either companies’ future company plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of WBD’s management and are subject to significant risks and uncertainties outside of our control. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are the following: (1) the completion of the proposed transaction may not occur on the anticipated terms and timing or at all; (2) the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction; (3) the risk that WBD stockholders may not approve the proposed transaction; (4) the risk that the necessary regulatory approvals for the proposed transaction may not be obtained or may be obtained subject to conditions that are not anticipated; (5) risks that any of the closing conditions to the proposed transaction may not be satisfied in a timely manner; (6) the final allocation of indebtedness between WBD and a newly formed subsidiary (“Discovery Global”) in connection with the separation could cause a reduction to the consideration for the proposed transaction; (7) risks related to litigation brought in connection with the proposed transaction; (8) risks related to disruption of management time from ongoing business operations due to the proposed transaction; (9) effects of the announcement, pendency or completion of the proposed transaction on the ability of WBD to retain customers and retain and hire key personnel and maintain relationships with suppliers, distributors, advertisers, content providers, vendors and other business partners, and on its operating results and business generally; (10) negative effects of the announcement or the consummation of the proposed transaction on the market price of WBD common stock; (11) risks related to the potential impact of general economic, political and market factors on the companies or the proposed transaction; (12) inherent uncertainties involved in the estimates and assumptions used in the preparation of financial projections, and inherent uncertainties involved in the estimates and judgments used to estimate the differences between WBD's Global Linear Networks segment results and the expected results of Discovery Global; (13) the risk that Discovery Global, as a new company that currently has no credit rating, will not have access to the capital markets on acceptable terms; (14) the risk that Discovery Global may be unable to achieve some or all of the benefits that WBD expects Discovery Global to achieve as an independent, publicly-traded company; (15) the risk that Discovery Global may be more susceptible to market fluctuations and other adverse events than it would have otherwise been while still a part of WBD; (16) the risk that Discovery Global will incur significant indebtedness in connection with the separation, and the degree to which it will be leveraged following completion of the separation may materially and adversely affect its business, financial condition and results of operations; (17) the ability to obtain or consummate financing or refinancing related to the proposed transaction or the separation upon acceptable terms or at all; (18) volatility or a decline in the market price for Discovery Global common stock following the separation; and (19) the response of WBD or Netflix management to any of the aforementioned factors.
WBD's actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risks related to the separation and the proposed transaction. Discussions of additional risks and uncertainties are contained in WBD’s filings with the Securities and Exchange Commission, including but not limited to WBD’s most recent Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. WBD is not under any obligation, and expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise.
Persons reading this communication are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. Non-GAAP Financial Measures In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this communication may also contain certain non-GAAP financial measures, identified with an "(*)". Reconciliations between the non-GAAP financial measures and the closest GAAP financial measures are available in the financial schedules in this release and in the "Quarterly Results" section of the Warner Bros.
Discovery, Inc. investor relations website at: https://ir.wbd.com. About Warner Bros. Discovery Warner Bros.
Discovery is a leading global media and entertainment company that creates and distributes the world’s most differentiated and complete portfolio of branded content across television, film, streaming and gaming. Warner Bros. Discovery inspires, informs and entertains audiences worldwide through its iconic brands and products including: Discovery Channel, HBO Max, discovery+, CNN, DC, TNT Sports, Eurosport, HBO, HGTV, Food Network, OWN, Investigation Discovery, TLC, Magnolia Network, TNT, TBS, truTV, Travel Channel, Animal Planet, Science Channel, Warner Bros.
Motion Picture Group, Warner Bros. Television Group, Warner Bros. Pictures Animation, Warner Bros.
Games, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies, Discovery en Español, Hogar de HGTV and others. For more information, please visit www.wbd.com. Contacts Media Robert Gibbs Joe Libonati (347) 268-3017 (917) 287-6763 robert.gibbs@wbd.com joe.libonati@wbd.com Investor Relations Peter Lee Gabriele Cattoni Sam Yates (212) 548-5907 (212) 752-8744 (212) 548-4907 peter.lee@wbd.com gabriele.cattoni@wbd.com samantha.yates@wbd.com Q4 2025 Earnings Press Release | February 26, 2026
Definitions and Sources for Warner Bros. Discovery, Inc. (1) Foreign Exchange Impacting Comparability: The impact of exchange rates on our business is an important factor in understanding period-to- period comparisons of our results. For example, our international revenues are favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies.
We believe the presentation of results on a constant currency basis (“ex-FX”), in addition to results reported in accordance with U.S. GAAP provides useful information about our operating performance because the presentation ex-FX excludes the effects of foreign currency volatility and highlights our core operating results. The presentation of results on a constant currency basis should be considered in addition to, but not a substitute for, measures of financial performance reported in accordance with U.S.
GAAP. The ex-FX change represents the percentage change on a period-over-period basis adjusted for foreign currency impacts. For the 2025 period, the ex- FX change is calculated as the difference between the current year amounts translated at a baseline rate, which is a spot rate for each of our currencies determined early in the fiscal year as part of our forecasting process (the “2025 Baseline Rate”), and the prior year amounts translated at the same 2025 Baseline Rate.
In addition, consistent with the assumption of a constant currency environment, our ex-FX results exclude the impact of our foreign currency hedging activities, as well as realized and unrealized foreign currency transaction gains and losses. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies. (2) Adjusted EBITDA: The Company evaluates the operating performance of its operating segments based on financial measures such as revenues and Adjusted EBITDA. Adjusted EBITDA is defined as operating income excluding: (i) employee share-based compensation, (ii) depreciation and amortization, (iii) restructuring and facility consolidation, (iv) certain impairment charges, (v) gains and losses on business and asset dispositions, (vi) third-party transaction and integration costs, (vii) amortization of purchase accounting fair value step-up for content, (viii) amortization of capitalized interest for content, and (ix) other items impacting comparability.
The Company uses this measure to assess the operating results and performance of the segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. The Company believes Adjusted EBITDA is relevant to investors because it allows them to analyze the operating performance of each segment using the same metric management uses. The Company excludes employee share-based compensation, restructuring, certain impairment charges, gains and losses on business and asset dispositions, and transaction and integration costs from the calculation of Adjusted EBITDA due to their impact on comparability between periods.
Integration costs include transformative system implementations and integrations, such as Enterprise Resource Planning systems, and may take several years to complete. The Company also excludes the depreciation of fixed assets and amortization of intangible assets, amortization of purchase accounting fair value step- up for content (which is included in consolidated costs of revenues), and amortization of capitalized interest for content, as these amounts do not represent cash payments in the current reporting period. We prospectively updated certain corporate allocations at the beginning of 2025.
The impact to prior periods was immaterial. (3) Free cashflow: The Company defines free cashflow as cashflow from operations less acquisitions of property and equipment. The Company believes free cashflow is an important indicator for management and investors of the Company’s liquidity, including its ability to reduce debt, make strategic investments, and return capital to stockholders. (4) Streaming Subscriber: The Company defines a “Core Streaming Subscription” as: (i) a retail subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product (defined below) for which we have recognized subscription revenue, whether directly or through a third party, from a Streaming platform; (ii) a wholesale subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue from a fixed-fee arrangement with a third party and where the individual user has activated their subscription; (iii) a wholesale subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue on a per subscriber basis, including third-party services that host a branded environment of discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue on a per subscriber basis; (iv) a retail or wholesale subscription to an independently-branded, regional product sold on a stand- alone basis that includes discovery+, HBO, HBO Max, Max, and/or a Premium Sports Product, for which we have recognized subscription revenue (as per (i) - (iii) above); and (v) users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires. The Company defines a “Premium Sports Product” as a strategically prioritized, sports-focused product sold on a stand-alone basis and made available directly to consumers.
The current “independently-branded, regional products” referred to in (iv) above consist of TVN/Player. Subscribers to multiple WBD Streaming products (listed above) are counted as a paid subscriber for each individual WBD streaming product subscription. We may refer to the aggregate number of Core Streaming Subscriptions as “subscribers”.
The reported number of “subscribers” included herein and the definition of “Streaming Subscription” as used herein excludes: (i) individuals who subscribe to Streaming products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-branded, regional products (currently consisting of TVN/Player), that may be offered by us or by certain joint venture partners or affiliated parties from time to time; (ii) a limited number of international discovery+ subscribers that are part of non-strategic partnerships or short-term arrangements as may be identified by the Company from time to time; (iii) domestic and international Cinemax subscribers, and international basic HBO subscribers; and (iv) users on free trials except for those users on free trial that convert to a Streaming Subscription within the first seven days of the next month as noted above. Domestic subscriber - We define a Domestic subscriber as a subscription based either in the United States of America or Canada. International subscriber - We define an International subscriber as a subscription based outside of the United States of America or Canada. (5) Net debt: The Company defines net debt as gross debt of $33.5 billion, less cash, cash equivalents, and restricted cash of $4.6 billion.
The Company believes this measure is relevant to investors as it is a financial measure frequently used in evaluating a company's financial condition. Q4 2025 Earnings Press Release | February 26, 2026
Definitions and Sources for Warner Bros. Discovery, Inc. (Continued) (6) Net leverage: The Company defines net leverage as the calculation where net debt (gross debt of $33.5 billion, less cash, cash equivalents, and restricted cash of $4.6 billion) is divided by the sum of the most recent four quarters Adjusted EBITDA of $8,744 million. The Company believes this measure is relevant to investors as it is a financial measure frequently used in evaluating a company's financial condition. (7) Streaming & Studios Division: In December 2024, we announced that our board of directors had authorized the Company to implement a new corporate structure designed to enhance our strategic flexibility and create potential opportunities to unlock shareholder value.
Under the new corporate structure, the Company will serve as the parent company for two distinct operating divisions: Streaming & Studios and Global Linear Networks. In the first quarter of 2025, we renamed our Direct-to-Consumer reportable segment to Streaming and our Networks reportable segment to Global Linear Networks. There were no changes to our reportable segments or the composition of our reportable segments as a result of these changes.
The Streaming & Studios division includes our Streaming and Studios reportable segments and eliminations between those two reportable segments. (8) Subscriber-related revenues: The Company defines subscriber-related revenues as the sum of distribution and advertising revenues in the Streaming segment. The Company uses subscriber-related revenues to monitor and evaluate the Company's streaming revenue performance. The Company believes this measure is relevant to investors as it highlights the revenue generation tied to the Company's streaming products. (9) ARPU: The Company defines Streaming Average Revenue Per User ("ARPU") as total subscription revenue plus net advertising revenue for the period divided by the daily average number of paying subscribers for the period.
Where daily values are not available, the sum of beginning of period and end of period divided by two is used. Excluded from the ARPU calculation are: (i) Revenue and subscribers for Streaming products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-branded, regional products (currently consisting of TVN/Player), that may be offered by us or by certain joint venture partners or affiliated parties from time to time; (ii) A limited amount of international discovery+ revenue and subscribers that are part of non-strategic partnerships or short-term arrangements as may be identified by the Company from time to time; (iii) Cinemax, Max/HBO hotel and bulk institution (i.e., subscribers billed on a bulk basis), and international basic HBO revenue and subscribers; and (iv) Users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires. (10) Gross debt: The Company defines gross debt of $33.5 billion as total debt of $32.8 billion, plus finance leases of $683 million. The Company believes this measure is relevant to investors as it is a financial measure frequently used in evaluating a company's financial condition.
Please refer to the Trending Schedules and Non-GAAP Reconciliations posted in the "Quarterly Results" section of the Company's investor relations website (https://ir.wbd.com) for the full reconciliation of net leverage. Numbers presented in the following materials are on a rounded basis using actual amounts. Minor differences in totals and percentages may exist due to rounding.
Source: Warner Bros. Discovery, Inc. Q4 2025 Earnings Press Release | February 26, 2026
Open the filing on EDGARQ4 2025 Shareholder Letter | February 26, 2026 1 Fellow Shareholders, 2025 marked a significant year for Warner Bros. Discovery as we made meaningful progress in delivering on our commitment to return our Studios to industry leadership, scale HBO Max globally, and optimize our Global Linear Networks. Our Studios segment was a clear standout in 2025, thriving both critically and commercially after a successful, coordinated effort to reinvigorate and enhance operations and processes.
The Studios segment finished 2025 with $2.55 billion in Adjusted EBITDA(1), a 52% ex-FX(2) year-over-year increase, exceeding our guidance and demonstrating healthy progress toward our target of at least $3 billion in Adjusted EBITDA. In 2025, nine of our films opened #1 at the box office, and our titles held the top spot for 16 weekends globally. We are already seeing momentum continue into 2026, with Wuthering Heights generating $83 million at the global box office during its opening weekend, our ninth consecutive theatrical release to open #1, further reinforcing Warner Bros.
Discovery’s position as a premiere destination for the world’s leading creative talent and our commitment to exceptional original storytelling. Our Streaming segment finished the year with nearly 132 million subscribers(3), surpassing the 130 million target we established in August 2022. Furthermore, the Streaming segment generated $1.37 billion in Adjusted EBITDA, exceeding our guidance and more than doubling year-over-year.
With the successful recent launches of HBO Max in Germany and Italy, as well as the upcoming launches in the United Kingdom and Ireland on March 26th, we expect to finish the first quarter of 2026 with more than 140 million subscribers, well on our way to more than 150 million subscribers by year end. Finally, our Global Linear Networks segment demonstrated its continued resonance with consumers while making progress on long-term initiatives to transform the business. In 2025, Global Linear Networks debuted 17 of the top 25 freshman cable series in the U.S., a reflection of millions of consumers’ enduring attachment to our roster of iconic brands.
During the fourth quarter, we launched CNN All Access, an important milestone in building a modern, digital first news platform, to adapt to how audiences consume news. We also kicked off 2026 as the home of the Olympic Winter Games in Europe, with linear viewership up more than 50% across Europe’s largest markets including France, Germany, Italy, Poland and the United Kingdom versus Beijing 2022. This year’s Olympic Winter Games were the most streamed ever with viewers more than tripling compared to Beijing 2022 thanks to our great customer experience on HBO Max and discovery+.
STUDIOS The multi-year effort to restore Warner Bros. Motion Picture Group as Hollywood’s leading film studio culminated in strong full year results for our Studios segment. In 2025, we distributed seven consecutive films that generated more than $40 million during their opening weekends at the domestic box office - a first for any studio - and we finished the year with $4.4 billion at the global box office.
Our performance reflected success across a broad range of titles, including global
Q4 2025 Shareholder Letter | February 26, 2026 2 tentpoles such as A Minecraft Movie and Superman, horror genre specialty films and new contributions to valuable franchises such as The Conjuring: Last Rights and Final Destination: Bloodlines, and original works such as Sinners, One Battle After Another, and Weapons. Additionally, the film slate received critical acclaim with nine Golden Globe Awards, including Best Picture - Musical or Comedy for One Battle After Another, and Cinematic and Box Office Achievement for Sinners. We also received 30 total Academy Award nominations, the most of any studio this year, including a record-breaking 16 nominations for Sinners, 13 for One Battle After Another, and one for Weapons.
As we look ahead, our diverse 2026 film slate showcases our continued investment in quality storytelling, ranging from tentpoles like Supergirl and Dune: Messiah, to creative originals like Margot Robbie’s Wuthering Heights, fan-favorite horror franchises from New Line such as Evil Dead Burn, as well as our debut film title from Warner Bros. Animation, The Cat In The Hat. Warner Bros.
Television (“WBTV”) continues to be one of the top independent suppliers of live-action television. WBTV’s pipeline is healthy with over 70 active series spanning 20 linear and streaming platforms at the end of 2025. Looking ahead, 2026 marks the first year that WBTV will deliver more episodes to streaming platforms than to broadcast and cable combined, the result of a multi-year strategy to shift output toward growth-oriented distribution channels.
Notable projects for third parties include Ted Lasso (Apple TV), Bad Monkey (Apple TV), Shrinking (Apple TV), and Running Point (Netflix). Key titles produced in association with HBO for HBO Max include the series premiere of Lanterns and the award-winning series The Pitt, which was already renewed for a third season. Our Studios segment remains focused on advancing recent operational enhancements, disciplined risk-taking to support unique storytelling, a balanced approach to our theatrical slate, and optimizing the value of our intellectual property as we continue to progress toward our segment Adjusted EBITDA target of at least $3 billion.
While early, particularly given the inherent volatility in box office results, we expect Studios segment 2026 Adjusted EBITDA to be relatively in line with 2025 as noted in our merger proxy, even as we lap the strong box office success and a sizable television licensing deal renewal in 2025. We will also continue to confidently invest this year for 2027 and beyond to support a more robust slate of theatrical and television titles, the opening of the Harry Potter experience in Shanghai and Abu Dhabi, and the rebuilding of our video game pipeline. STREAMING 2025 was another exceptional year for HBO Max with growing global scale and a strong content slate.
The Streaming segment added nearly 15 million subscribers in 2025 and ended the year with nearly 132 million subscribers, exceeding the 130 million subscriber target we set out in August 2022. During the fourth quarter, we continued to deliver what fans want with a lineup of elevated, must- watch stories that became fixtures for consumers and central to cultural conversations around the world - from It: Welcome to Derry and The Chair Company to I Love LA and Heated Rivalry. It:
Q4 2025 Shareholder Letter | February 26, 2026 3 Welcome to Derry averaged over 27 million global viewers per episode. Additionally, Heated Rivalry became the #1 first-run acquired scripted series in HBO Max history with an average of 13 million global viewers per episode. We also continue to expand our original programming outside the U.S., demonstrated by the fourth quarter release of our scripted drama Heaven in Poland, which is now the second most watched HBO Max local original series ever in the country.
HBO Max is off to a strong start in 2026 with the return of Industry and The Pitt, each growing season- over-season viewership by 30% and 50%, respectively, and demonstrating steady week-over-week audience growth. Additionally, A Knight of the Seven Kingdoms, the third installment in the Game of Thrones franchise, is currently averaging over 24 million viewers per episode globally and growing. We are also exceling operationally, with the well-executed launch of HBO Max in Germany and Italy, along with several other markets, in early January.
We are encouraged by the success of these market launches to date, and retail subscriber acquisition is exceeding our internal targets. On March 26th, HBO Max will launch as a direct-to-consumer product for the first time in the United Kingdom and Ireland, as well as through non-exclusive partnerships, including Sky. Given these key market launches and partnerships, we now have a clear line of sight to exceed 140 million subscribers by the end of the first quarter, well on our way to over 150 million subscribers by year end 2026.
We anticipate another strong year for the Streaming segment on both revenues and Adjusted EBITDA. We expect subscriber-related revenue(4) growth to continue accelerating throughout 2026 driven by the following:
- Another year of healthy subscriber growth, including those on the ad-supported tier and the corresponding ad revenue benefits;
- The full year benefit of subscription price increases, particularly ones like in the U.S. that took effect in the fourth quarter;
- Our strongest content slate yet, which has launched us into 2026 ahead of expectations;
- Continued product enhancements and feature improvements that are driving further engagement and retention improvements; and
- The upcoming lapping of two one-time resets: o The first-half impact of the NBA on advertising revenues (4% ex-FX and 15% ex-FX headwind in the first and second quarters, respectively), and o The previously disclosed domestic distribution renewal with a former related party partially through the second quarter. We will also continue to invest in content and marketing to support the continuing global rollout of HBO Max and further penetration of existing markets, which will position the business for strong revenue growth in the coming years. Although we consider a range of metrics as we look to optimize the business, we view subscriber-related revenue growth and Adjusted EBITDA growth as our primary metrics for the business’s success going forward. As such, the fourth quarter of 2025 will be the last quarter we report subscribers and ARPU(5).
Q4 2025 Shareholder Letter | February 26, 2026 4 GLOBAL LINEAR NETWORKS Our Global Linear Networks segment continues to find innovative ways to deliver captivating content to millions of consumers. In 2025, our domestic portfolio of networks attracted nearly 30% of primetime cable viewership among adults 25-54 and reached a monthly average of more than 140 million total viewers. TNT, TBS, Food Network, CNN and TLC were five of the top ten ad-supported cable networks for the year.
And TLC’s breakout hit Baylen Out Loud was the #1 cable freshman series in primetime among adults and women 25-54. In total, domestic audiences consumed over 29 billion hours of Global Linear Networks content throughout the year. The strong and enduring demand for our content also drives meaningful viewership for our networks around the world.
In the U.S., our linear portfolio ranks second in primetime viewership for adults 25- 54, despite not owning a broadcast network. In Europe, we rank as the #2 broadcaster overall with top five viewership in key markets, including Poland, Italy, and the Nordics; and in Latin America, we rank as the #1 pay-TV portfolio across the region. Our global footprint provides meaningful diversification, most notably in EMEA, a region where advertising and pay TV subscriber trends remain materially more stable compared to domestic trends.
Furthermore, the relative strength of our free-to-air assets across key European markets enhances our resilience to challenging domestic market trends, as free-to-air networks account for roughly 50% of international advertising revenues. Our free-to-air revenues increased each of the last four years, largely supported by the success of our European brands, including TVN Poland, which ranked as the #1 channel in the country for the fifth consecutive year, and Nove in Italy, which had a record year in 2025. When it comes to news, CNN is the most trusted global news brand and reaches more than 800 million people around the world with more than 150 million monthly users across platforms.
CNN also ranks #1 in TV reach among cable news networks in the U.S. The combination of one of the best global newsgathering organizations and a seasoned team capable of delivering news in multiple forms - written articles, audio, live video, and on-demand video - across platforms makes CNN a highly valuable asset as we look to engage audiences worldwide. In fact, we have seen strong linear viewership gains since the beginning of the year, underpinning CNN’s consistent value for distributors through high-frequency viewing and reliable audience engagement.
Even in a crowded marketplace with free alternatives and subscription fatigue, third party research continues to show that consumers are willing to pay for reliable, high-quality journalism. As news consumption habits evolve, we are actively investing in modernizing CNN and expanding monetization opportunities. CNN launched a direct-to-consumer paywall offering in 2024, and expanded it in the fourth quarter of 2025 with CNN All Access, our streaming and video-on-demand product.
We are encouraged by the early performance of CNN All Access, and expect subscribers and engagement to continue to grow as we enter the midterm election cycle and look ahead to the 2028 presidential election. This positive early performance supports our long-term strategy to invest in the future of the brand, as we expand CNN into a comprehensive, refreshed, news-first digital experience that delivers flexibility and choice across a suite of multimedia and lifestyle offerings.
Q4 2025 Shareholder Letter | February 26, 2026 5 Finally, we are further encouraged by the improved advertising trends we saw at Global Linear Networks during the fourth quarter, where we realized an 8% ex-FX sequential improvement, inclusive of an approximate 4% ex-FX negative impact from the loss of the NBA. The improvement was driven by better domestic general entertainment delivery trends and healthier yield supported by strong scatter CPMs that remain at a robust premium to upfront pricing. As we look toward the first half of 2026, we anticipate a 7% ex-FX and 20% ex-FX headwind to advertising revenue from the absence of the NBA in the first and second quarters, respectively, which will be more than offset by an associated improvement in operating expenses.
We also expect continued advertising revenue growth in key scaled international markets including Poland and Italy, and across the EMEA region as a whole. As noted in the past, we reinvested some of the NBA cost savings, including in expanded College Football Playoff rights with coverage expanding to 5 of the 11 games starting in the fourth quarter. On a net basis, we expect full year operating expenses to improve in the high single-digit percentage range.
We will continue to strategically and opportunistically invest in sports rights across all our platforms to best reach audiences, and we expect sports viewership as a percentage of our total portfolio to grow meaningfully. We are well underway in developing our TNT Sports app, which will serve as a centralized destination for our sports portfolio in the U.S. We plan to launch the product in 2026 and make it available standalone and through distribution and bundling partnerships.
FREE CASH FLOW & BALANCE SHEET We generated $3.09 billion in free cashflow(6) in 2025, including approximately $1.35 billion in separation & transaction related costs. During the fourth quarter, we repaid $1.0 billion of the bridge loan facility, ending the year with net leverage(7) of 3.3x. In 2026, we expect underlying free cashflow conversion to remain strong.
We also expect to incur additional transaction and separation-related costs in the first half of 2026. As a reminder, the first quarter is seasonally our lowest free cashflow quarter given the cadence of our cash content spend. TRANSACTION UPDATE Our Board of Directors (the “Board”) and management team have been hard at work executing a series of steps to unlock value for our shareholders.
This began with the announcement at our third quarter 2024 earnings call of a Board-led review to evaluate all steps to unlock shareholder value, followed by the reorganizing of our legal entities in December 2024, the June 2025 announcement of our plan to separate Warner Bros. Discovery into two independent companies - Warner Bros. and Discovery Global, and the strategic review process initiated in October 2025. These actions culminated in the December 2025 entry into a definitive agreement for Netflix, Inc. (“Netflix”) to acquire Warner Bros. following the separation of Discovery Global, which will create significant value for our shareholders.
Q4 2025 Shareholder Letter | February 26, 2026 6 While the Netflix Merger Agreement remains in effect and the Board continues to recommend the Netflix transaction and has not withdrawn or modified its recommendation, the Board recently determined that the latest proposal from Paramount Skydance (“PSKY”) could reasonably be expected to lead to a "Company Superior Proposal" as defined in the Netflix Merger Agreement. WBD continues to engage with PSKY to determine if a proposal that constitutes such a "Company Superior Proposal" can be reached. There can be no assurance that the Board will conclude that the transaction proposed by PSKY is superior to the merger with Netflix or that any definitive agreement or transaction will result from Warner Bros.
Discovery’s discussions with PSKY. The Board remains committed to maximizing shareholder value and certainty while mitigating downside risks, and the Board will evaluate any proposal against that standard with the objective of delivering the best deal for our shareholders. We will not be answering any questions on this topic during our earnings call.
CONCLUSION We continue to execute against our strategic pillars across Warner Bros. Discovery. The Studios segment is making meaningful progress toward returning to industry leadership and our $3 billion Adjusted EBITDA goal.
The Streaming segment continues to scale globally and we expect to exceed 150 million global subscribers by the end of 2026 with meaningful subscriber-related revenue and Adjusted EBITDA growth. And at Global Linear Networks, we are building on our assets that underpin long-term value creation: our resilient international footprint, our premiere global sports portfolio, a modernized CNN, and leveraging emerging technologies and platforms to enhance our reach and monetization. With these strong assets and our disciplined investment strategy, we remain focused on sustaining healthy Adjusted EBITDA and free cashflow for years to come.
In parallel, we are focused on maximizing value for shareholders. As we move forward into our next phase for Warner Bros. Discovery, we remain confident that the business is well positioned to deliver sustainable performance and long-term success in an evolving media landscape.
Q4 2025 Shareholder Letter | February 26, 2026 7 2026 Outlook Warner Bros. Discovery, Inc. ("Warner Bros. Discovery", "WBD", the "Company", "we", "us", or "our") may provide forward-looking commentary in connection with this communication.
The Company is not able to provide a reconciliation of the non-GAAP forward-looking commentary to comparable GAAP measures as, at this time, the Company cannot determine the occurrence or impact of the adjustments, such as the effect of future changes in foreign currency exchange rates or future acquisitions or divestitures that would be excluded from such GAAP measures. Accordingly, the Company is relying on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K to exclude these reconciliations. Cautionary Statement Concerning Forward-Looking Statements Information set forth in this communication constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, without limitation, statements regarding the Company’s expectations, beliefs, intentions or strategies regarding the future, and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “should,” “will” and “would” or similar words. These forward- looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties and on information available to Warner Bros. Discovery as of the date hereof.
Forward-looking statements notice
Forward-looking statements include, without limitation, statements about the benefits of the planned separation or the proposed transaction between WBD and Netflix, Inc. (the “proposed transaction”), future financial and operating results, in the case of a separation, either companies’ future company plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of WBD’s management and are subject to significant risks and uncertainties outside of our control. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are the following: (1) the completion of the proposed transaction may not occur on the anticipated terms and timing or at all; (2) the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction; (3) the risk that WBD stockholders may not approve the proposed transaction; (4) the risk that the necessary regulatory approvals for the proposed transaction may not be obtained or may be obtained subject to conditions that are not anticipated; (5) risks that any of the closing conditions to the proposed transaction may not be satisfied in a timely manner; (6) the final allocation of indebtedness between WBD and a newly formed subsidiary (“Discovery Global”) in connection with the separation could cause a reduction to the consideration for the proposed transaction; (7) risks related to litigation brought in connection with the proposed transaction; (8) risks related to disruption of management time from ongoing business operations due to the proposed transaction; (9) effects of the announcement, pendency or completion of the proposed transaction on the ability of WBD to retain customers and retain and hire key personnel and maintain relationships with suppliers, distributors, advertisers, content providers, vendors and other business partners, and on its operating results and business generally; (10) negative effects of the announcement or the consummation of the proposed transaction on the market price of WBD common stock; (11) risks related to the potential impact of general economic, political and market factors on the companies or the proposed transaction; (12) inherent uncertainties involved in the estimates and assumptions used in the preparation of financial projections, and inherent uncertainties involved in the estimates and judgments used to estimate the differences between WBD's Global Linear Networks segment results and the expected results of Discovery Global; (13) the risk that Discovery Global, as a new company that currently has no credit rating, will not have access to the capital markets on acceptable terms; (14) the risk that Discovery Global may be unable to achieve some or all of the
Q4 2025 Shareholder Letter | February 26, 2026 8 benefits that WBD expects Discovery Global to achieve as an independent, publicly-traded company; (15) the risk that Discovery Global may be more susceptible to market fluctuations and other adverse events than it would have otherwise been while still a part of WBD; (16) the risk that Discovery Global will incur significant indebtedness in connection with the separation, and the degree to which it will be leveraged following completion of the separation may materially and adversely affect its business, financial condition and results of operations; (17) the ability to obtain or consummate financing or refinancing related to the proposed transaction or the separation upon acceptable terms or at all; (18) volatility or a decline in the market price for Discovery Global common stock following the separation; and (19) the response of WBD or Netflix management to any of the aforementioned factors. WBD's actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risks related to the separation and the proposed transaction. Discussions of additional risks and uncertainties are contained in WBD’s filings with the Securities and Exchange Commission, including but not limited to WBD’s most recent Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K.
WBD is not under any obligation, and expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise. Persons reading this communication are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. Non-GAAP Financial Measures In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this communication may also contain certain non-GAAP financial measures, identified with an “(*)”.
Reconciliations between the non-GAAP financial measures and the closest GAAP financial measures are available in the Trending Schedules and “Quarterly Results” section of the Warner Bros. Discovery, Inc. investor relations website at: https://ir.wbd.com. Definitions and Sources for Warner Bros.
Discovery, Inc. (1) Adjusted EBITDA: The Company evaluates the operating performance of its operating segments based on financial measures such as revenues and Adjusted EBITDA. Adjusted EBITDA is defined as operating income excluding: (i) employee share-based compensation, (ii) depreciation and amortization, (iii) restructuring and facility consolidation, (iv) certain impairment charges, (v) gains and losses on business and asset dispositions, (vi) third-party transaction and integration costs, (vii) amortization of purchase accounting fair value step-up for content, (viii) amortization of capitalized interest for content, and (ix) other items impacting comparability. The Company uses this measure to assess the operating results and performance of the segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment.
The Company believes Adjusted EBITDA is relevant to investors because it allows them to analyze the operating performance of each segment using the same metric management uses. The Company excludes employee share-based compensation, restructuring, certain impairment charges, gains and losses on business and asset dispositions, and transaction and integration costs from the calculation of Adjusted EBITDA due to their impact on comparability between periods. Integration costs include transformative system implementations and integrations, such as Enterprise Resource Planning systems, and may take several years to complete.
The Company also excludes the depreciation of fixed assets and amortization of intangible assets, amortization of purchase accounting fair value step-up for content (which is included in consolidated costs of revenues), and amortization of capitalized interest for content, as these amounts do not represent cash
Q4 2025 Shareholder Letter | February 26, 2026 9 payments in the current reporting period. We prospectively updated certain corporate allocations at the beginning of 2025. The impact to prior periods was immaterial. (2) Foreign Exchange Impacting Comparability: The impact of exchange rates on our business is an important factor in understanding period-to-period comparisons of our results.
For example, our international revenues are favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies. We believe the presentation of results on a constant currency basis (“ex-FX”), in addition to results reported in accordance with U.S. GAAP provides useful information about our operating performance because the presentation ex-FX excludes the effects of foreign currency volatility and highlights our core operating results.
The presentation of results on a constant currency basis should be considered in addition to, but not a substitute for, measures of financial performance reported in accordance with U.S. GAAP. The ex-FX change represents the percentage change on a period-over-period basis adjusted for foreign currency impacts.
For the 2025 period, the ex-FX change is calculated as the difference between the current year amounts translated at a baseline rate, which is a spot rate for each of our currencies determined early in the fiscal year as part of our forecasting process (the “2025 Baseline Rate”), and the prior year amounts translated at the same 2025 Baseline Rate. In addition, consistent with the assumption of a constant currency environment, our ex-FX results exclude the impact of our foreign currency hedging activities, as well as realized and unrealized foreign currency transaction gains and losses. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies. (3) Streaming Subscriber: The Company defines a “Core Streaming Subscription” as: (i) a retail subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product (defined below) for which we have recognized subscription revenue, whether directly or through a third party, from a Streaming platform; (ii) a wholesale subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue from a fixed-fee arrangement with a third party and where the individual user has activated their subscription; (iii) a wholesale subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue on a per subscriber basis, including third- party services that host a branded environment of discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue on a per subscriber basis; (iv) a retail or wholesale subscription to an independently-branded, regional product sold on a stand-alone basis that includes discovery+, HBO, HBO Max, Max, and/or a Premium Sports Product, for which we have recognized subscription revenue (as per (i) - (iii) above); and (v) users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires.
The Company defines a “Premium Sports Product” as a strategically prioritized, sports-focused product sold on a stand-alone basis and made available directly to consumers. The current “independently branded, regional products” referred to in (iv) above consist of TVN/Player. Subscribers to multiple WBD Streaming products (listed above) are counted as a paid subscriber for each individual WBD streaming product subscription.
We may refer to the aggregate number of Core Streaming Subscriptions as “subscribers”. The reported number of “subscribers” included herein and the definition of “Streaming Subscription” as used herein excludes: (i) individuals who subscribe to Streaming products, other than discovery+, HBO, HBO Max,
Q4 2025 Shareholder Letter | February 26, 2026 10 Max, a Premium Sports Product, and independently-branded, regional products (currently consisting of TVN/Player), that may be offered by us or by certain joint venture partners or affiliated parties from time to time; (ii) a limited number of international discovery+ subscribers that are part of non-strategic partnerships or short- term arrangements as may be identified by the Company from time to time; (iii) domestic and international Cinemax subscribers, and international basic HBO subscribers; and (iv) users on free trials except for those users on free trial that convert to a Streaming Subscription within the first seven days of the next month as noted above. Domestic subscriber - We define a Domestic subscriber as a subscription based either in the United States of America or Canada. International subscriber - We define an International subscriber as a subscription based outside of the United States of America or Canada. (4) Subscriber-related revenues: The Company defines subscriber-related revenues as the sum of distribution and advertising revenues in the Streaming segment.
The Company uses subscriber-related revenues to monitor and evaluate the Company's streaming revenue performance. The Company believes this measure is relevant to investors as it highlights the revenue generation tied to the Company's streaming products. (5) ARPU: The Company defines Streaming Average Revenue Per User ("ARPU") as total subscription revenue plus net advertising revenue for the period divided by the daily average number of paying subscribers for the period. Where daily values are not available, the sum of beginning of period and end of period divided by two is used.
Excluded from the ARPU calculation are: (i) Revenue and subscribers for Streaming products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-branded, regional products (currently consisting of TVN/Player), that may be offered by us or by certain joint venture partners or affiliated parties from time to time; (ii) A limited amount of international discovery+ revenue and subscribers that are part of non-strategic partnerships or short-term arrangements as may be identified by the Company from time to time; (iii) Cinemax, Max/HBO hotel and bulk institution (i.e., subscribers billed on a bulk basis), and international basic HBO revenue and subscribers; and (iv) Users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires. (6) Free cashflow: The Company defines free cashflow as cashflow from operations less acquisitions of property and equipment. The Company believes free cashflow is an important indicator for management and investors of the Company’s liquidity, including its ability to reduce debt, make strategic investments, and return capital to stockholders. In millions Three Months Ended December 31, 2025 Cash provided by operating activities $1,804 Less: Purchases of property and equipment (421) Free Cash Flow $1,383 (7) Net Leverage: The Company defines net leverage as the calculation where net debt (gross debt of $33.5 billion less cash, cash equivalents, and restricted cash of $4.6 billion) is divided by the sum of the most recent four quarters Adjusted EBITDA of $8,744 million.
The Company believes this measure is relevant to investors as it is a financial measure frequently used in evaluating a company's financial condition.