Warner Bros. Discovery, Inc.

What they do

WBD operates three reportable segments: Streaming, which consists of premium pay-TV and streaming services including HBO Max; Studios, which produces and releases feature films, produces and licenses television programming, distributes home entertainment, and operates interactive gaming; and Global Linear Networks, which consists of domestic and international television networks. Revenue comes from distribution fees paid by cable, satellite, telecom and digital distributors and DTC subscription services, advertising on networks and digital platforms, and content revenue from theatrical release, licensing, home entertainment and games. Brands include Discovery Channel, HBO Max, CNN, DC Studios, TNT Sports, HBO, Food Network, TLC, TBS, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Games, Adult Swim and Turner Classic Movies.

Revenue drivers

• Streaming — Q2 2026 revenue of $3,079 million, up 10% ex-FX, driven by subscription distribution revenue up 11% ex-FX and advertising up 8% ex-FX; segment Adjusted EBITDA rose 63% ex-FX to $512 million.
• Studios — Q2 2026 revenue of $2,328 million, down 39% ex-FX, with content revenue down 41% ex-FX primarily on lower theatrical revenue; segment Adjusted EBITDA fell 89% ex-FX to $96 million.
• Global Linear Networks — Domestic and international television networks business, which management describes as facing continued linear distribution pressure, linear subscriber declines and softness in the U.S. linear advertising market.
• Advertising (consolidated) — Q2 2026 advertising revenue of $1,724 million, down 22% ex-FX, as ad-lite streaming subscriber growth was more than offset by the absence of the NBA and continued domestic linear audience declines; the NBA absence alone hurt the growth rate by 20% ex-FX.

Recent performance

For Q2 2026, total revenues were $8,717 million, down 11% reported and 12% ex-FX from $9,812 million a year earlier. Net income available to WBD fell 91% to $149 million, including $1.1 billion of pre-tax acquisition-related amortization, content fair value step-up and restructuring expenses, while Adjusted EBITDA declined 4% to $1,879 million and 6% ex-FX. Streaming was the only segment to grow, with revenues up 10% ex-FX and Adjusted EBITDA up 63% ex-FX to $512 million, while Studios Adjusted EBITDA fell 89% ex-FX. Free cash flow was $572 million, down 19% from $702 million, and was unfavorably impacted by roughly $350 million of separation and transaction-related items. Cash provided by operating activities was $848 million, and the company reported $29.7 billion of net debt and 3.4x net leverage at quarter end.

Strategy

Management's stated priorities are to grow the streaming business globally, enhance the Studios segment, and manage the linear networks for best possible success. In June 2025 the company announced plans to separate into two publicly traded companies, Warner Bros. and Discovery Global, and in October 2025 the board said it would evaluate a broad range of strategic options, including the separation, a transaction for the entire company or separate transactions. In January 2026 WBD signed an amended Netflix merger agreement, which the board subsequently determined was topped by a Company Superior Proposal from Paramount Skydance; WBD terminated the Netflix agreement on February 27, 2026 and entered the PSKY Merger Agreement. WBD stockholders approved the PSKY Merger Agreement on April 23, 2026. The company has also been executing restructuring, including a 2025 plan tied to the previously proposed separation, and refinanced debt in Q2 2026 by repaying a $15 billion bridge loan facility with a $13 billion Term Loan B and a $1.7 billion Term Loan B.

Risks

• PSKY Merger completion uncertainty — The merger is subject to conditions including regulatory clearance, absence of a Company Material Adverse Effect, and WBD not having completed the separation of its Streaming & Studios business or paid a separation dividend, and there is no assurance conditions will be satisfied or waived on time or at all.
• Antitrust litigation seeking to block the merger — In July 2026, twelve state attorneys general and the Writers Guild of America West and East sued in the Northern District of California to block the PSKY Merger under Section 7 of the Clayton Act, and defendants agreed not to close until the earlier of five days after a merits determination or June 1, 2027.
• Linear distribution and advertising decline — Continued pressure on linear distribution, declines in linear subscribers and softness in the U.S. linear advertising market have had and are expected to continue to have a material negative impact, including on linear advertising revenue.
• Tariffs and digital advertising competition — U.S. tariffs and possible retaliatory tariffs may raise production costs or reduce advertiser spending, while growing digital advertising inventory increases competition for advertising dollars across linear networks and ad-supported streaming tiers.

Outlook

Management does not provide a traditional forward outlook in the excerpts; the near-term path is dominated by the pending PSKY Merger at $31.00 per share in cash, plus Ticking Consideration of $0.00277778 per day after September 30, 2026, capped at $0.25 per 90-day period. The closing is subject to an agreement not to complete before the earlier of five days after a merits determination in the antitrust litigation or June 1, 2027, and the outcome of that litigation is uncertain. The company also continues to weigh strategic options, including the separation into Warner Bros. and Discovery Global, and reported $29.7 billion of net debt and 3.4x net leverage at June 30, 2026.