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    WBD
    Earnings call· Jun 2026(Q2 FY26)

    Warner Bros. Discovery Q2 FY26 earnings call WBD

    Aug 6, 2026 Source

    Executive summary

    Warner Bros. Discovery Q2 FY26 — Streaming Profitability Surges Amidst Content Strength

    Warner Bros. Discovery delivered a strong second quarter, marked by record streaming segment revenue and significant adjusted EBITDA profitability, driven by the global success of HBO content. While the studio business faced a challenging period and linear advertising saw declines, the company emphasized its diversified strategy, robust content pipeline, and confidence in its long-term financial targets. Management also reiterated its commitment to the pending divestiture to Paramount's Skydance, highlighting the company's strong operational performance.

    Highlights

    5

    • Streaming segment delivered over $3 billion in revenues for the first time ever.

    • Streaming generated $512 million in adjusted EBITDA, a more than 60% improvement over Q2 2025, with a nearly 17% adjusted EBITDA margin.

    • HBO Max garnered 122 Emmy nominations, leading the industry.

    • CNN linear viewership increased 24% over the previous year, and minutes spent across all CNN platforms increased 19%.

    • Discovery Shark Week saw its highest year-over-year growth in more than a decade.

    Concerns

    3

    • Linear advertising was down nearly 30% in Q2, impacted by the NBA and underlying market weakness.

    • The Studio film business underperformed expectations in Q2 and is 'a little lighter' this year compared to an outstanding Q2 2025.

    • International linear advertising was worse in Q2 than Q1, with a mixed picture into Q3 due to consumer weakness and geopolitical environment.

    Guidance & targets

    6
    CategoryTargetConfidence
    Studio segment adjusted EBITDA
    over $3 billion
    high materiality
    High
    Harry Potter series production
    10 consecutive years
    medium materiality
    High
    Film production volume
    19 films
    medium materiality
    High
    Film production volume
    maintain that larger number
    medium materiality
    High
    HBO Max retention and churn
    best year ever in terms of retention and lower churn
    medium materiality
    High
    HBO Max content lineup strength
    even more bullish
    low materiality
    Low

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Streaming segment
    Achieved record revenues and significant adjusted EBITDA profitability, transforming from a loss-making U.S.-only service to a global high-growth asset.
    Subscriber-related revenue growth accelerated 200 basis points sequentiallyPositive engagement and subscriber trends
    		over $3 billion10% ex-FX—$512 million adjusted EBITDA (nearly 17% margin)
    Studio segment
    Underperformed expectations in Q2 FY26 but is diversifying across theatrical, television, licensing, games, experiences, retail, and consumer products to manage risk and achieve long-term EBITDA targets. Strong film lineup expected for 2027.
    14 films this year19 films next yearMore than 80 shows on air across every platform (Warner Bros. TV)Average $5 billion library revenue
    		———over $3 billion adjusted EBITDA (long-term goal)
    Global Networks
    Demonstrated resilience despite headwinds, driven by premium sports properties, news, and general entertainment content. International linear advertising faced weakness.
    CNN linear viewership increased 24% YoYMinutes spent across all CNN platforms increased 19%Discovery Shark Week highest YoY growth in over a decadeTNT Sports NBA championship highest rated everMLB regular season viewership increased >20%NHL playoffs viewership increased 50%4 of the top 10 shows in general entertainment across all cable networks
    		————

    Operational metrics

    10
    Streaming segment adjusted EBITDA
    $512 million>60% improvement YoY
    Q2 FY26

    Significant improvement from prior periods, contributing to the segment's turnaround.

    Streaming segment loss
    $2 billion plus
    FY22

    Historical loss for the predominantly U.S.-only HBO streaming business, used as a baseline for the current turnaround.

    Subscriber-related revenue growth
    10%accelerated 200 bps sequentially
    Q2 FY26

    Key driver of streaming segment revenue growth.

    Emmy nominations
    150
    2026

    WBD led the industry in Emmy nominations.

    Emmy nominations
    122
    2026

    HBO Max led the industry in nominations, including 26 for Season 2 of The Pitt and 25 for the final season of Hacks.

    Emmy nominations
    52
    2026

    Warner Bros. Television recognized for its production quality, including for third-party platforms.

    Top 10 shows in general entertainment
    4
    Q2 FY26

    WBD network brands were home to a significant portion of top-performing shows.

    Warner Bros. TV shows on air
    more than 80
    Current

    Across every platform with all key buyers.

    Library revenue
    $5 billion
    Average

    Historical average for library content licensing, noted for its healthy demand and high margins.

    Linear advertising decline
    nearly 30%
    Q2 FY26

    Primarily driven by the NBA and underlying ad market weakness, with international markets showing further decline.

    Industry KPIs

    4
    MetricValueDetails
    Paid members subscriberspositive trends
    Member quality and retentionmeaningful improvements
    Live sports events rights roihighest rated (NBA), more than 20% (MLB), 50% (NHL)
    Content spend title performanceat least 25 millionglobal viewers per episode

    Product announcements

    2
    ProductTypeDetails
    Harry Potter serieslaunch
    Lanternslaunch

    Deals & partnerships

    1
    Paramount's SkydanceProposed sale of Warner Bros. Discovery to Paramount's Skydance

    Management remains confident that the agreed-upon sale will be completed. The company is performing at a very high level to deliver the best possible company to the acquirer.

    Risks & headwinds

    4
    Linear advertising market weaknessQ2 FY26, continuing into Q3 FY26 for international

    down nearly 30% in Q2

    Mitigation: Leveraging strong viewership in news and sports; offsetting with HBO Max growth in some markets.

    Studio film underperformanceQ2 FY26, 'a little lighter' this year

    a handful of recent films have underperformed expectations

    Mitigation: Diversifying the Studio segment across theatrical, television, licensing, games, experiences, retail, and consumer products; strong film lineup planned for 2027.

    International linear advertising market weaknessQ2 FY26, Q3 FY26

    Q2 was worse than Q1; mixed picture into Q3

    Mitigation: Offsetting with HBO Max growth in some markets; monitoring market-by-market trends.

    Geopolitical environmentOngoing

    understandably difficult geopolitical environment

    Mitigation: Impacts consumer weakness in international ad markets; company focuses on quality, trustworthiness of journalism (CNN).

    What to watch in Q3 FY26

    4

    Streaming distribution growth trajectory

    Remainder of 2026
    Currentlow teens (excluding related party deal)
    TargetContinued solid trajectory

    Why it matters

    Indicates continued growth in the key streaming segment, crucial for overall company performance.

    And that trajectory looks very solid for the remainder of the year.

    Q&A highlights

    4

    Asked about the upcoming HBO scripted show pipeline, potential for fewer returning shows in 2027, and how the Studio segment plans to reach its $3 billion EBITDA target given recent performance.

    Management confirmed a strong HBO content pipeline for 2027, including White Lotus, Knight of the Seven Kingdoms, The Pitt, and The Last of Us, and highlighted the global expansion of MAX. For the Studio, they expressed high confidence in the $3 billion EBITDA target, citing diversification, a strong 2027 film lineup, growth in Warner Bros. TV, ancillary businesses, and Games.

    “I have 0 doubts about our long-term $3 billion EBITDA target for the studio.”

    asked by Steven Cahall · answered by Gunnar Wiedenfels

    3 min read7 chapters

    Detailed Narrative

    01

    Streaming Business Turnaround and Profitability

    The Streaming segment achieved a significant milestone in Q2 FY26, reporting over $3 billion in revenues for the first time. This was accompanied by $512 million in adjusted EBITDA, marking a more than 60% improvement year-over-year, and an adjusted EBITDA margin of nearly 17%. Management highlighted the transformation of HBO Max from a U.S.-only service losing over $2 billion in 2022 to a global, high-growth asset with strong financial returns, driven by subscriber-related revenue growth accelerating to 10% ex-FX.

    02

    Robust Content Pipeline and Emmy Recognition

    WBD's commitment to quality storytelling was evident in its content performance and industry accolades. HBO series like The Pitt, Knight of the Seven Kingdoms, House of the Dragon, and Euphoria each averaged at least 25 million global viewers per episode, with some exceeding 30 million. The company led the industry with 150 Emmy nominations, including 122 for HBO Max across 21 programs, and 52 for Warner Bros. Television. Upcoming content includes Lanterns, a new season of Gilded Age, and the Harry Potter series greenlit for the next 10 years, debuting on Christmas Day.

    03

    Studio Diversification and Long-Term Outlook

    Despite a challenging Q2 for the film business, with some recent films underperforming, management expressed confidence in the Studio segment's long-term goal of over $3 billion in adjusted EBITDA. The strategy involves diversifying beyond theatrical releases into television, licensing, games, experiences, retail, and consumer products to manage risk. Film production is set to increase from 14 films in FY26 to 19 in FY27, with a strong lineup including Lord of the Rings, Batman, Superman, and Minecraft II. Warner Bros. TV is also performing well with over 80 shows on air, and the Games division is seeing growth opportunities.

    04

    Resilience of Global Networks

    The global networks demonstrated resilience amidst headwinds. TNT Sports saw record viewership for the national championship basketball game, over 20% increase for MLB, and 50% for NHL playoffs. CNN's linear viewership increased 24% year-over-year, with minutes spent across all platforms up 19%. Discovery Shark Week achieved its highest year-over-year growth in over a decade, and network brands hosted 4 of the top 10 general entertainment shows on cable during Q2.

    05

    Effective Bundling Strategy

    WBD continues to champion bundling as a powerful strategy for subscriber acquisition and retention. Successful partnerships with Disney, Verizon, Mercado Libre, and RTL have demonstrated meaningful improvements in churn. Management anticipates 2026 to be the best year ever for retention and lower churn, with continued confidence in this trend, particularly as the content lineup strengthens in 2027.

    06

    Company Culture and Focus Amidst Transaction

    CEO David Zaslav highlighted the inspiring work ethic and focus of the company's 40,000 employees, despite the ongoing process of the proposed divestiture to Paramount's Skydance. He noted that the company is performing at a very high level, striving to deliver a stronger and higher-growth entity. The culture is driven by a commitment to storytelling excellence across all assets, from HBO to Warner Bros. and the global cable channels.

    07

    DC Universe Strategy Update

    The DC universe is progressing well under James Gunn's leadership, with a strong focus on 'Man of Tomorrow' and Matt Reeves' work on 'Batman.' Upcoming titles like 'Clayface' and 'Lanterns' for HBO are generating excitement, indicating a robust pipeline for the DC franchise. Management expressed confidence in the creative direction and future releases.

    AI-generated summary of the company’s earnings call. Not investment advice.