Los Angeles, California – Warner Bros. Discovery, led by CEO David Zaslav, reported a first-quarter profit of $86 million for its Direct-to-Consumer (DTC) unit, which encompasses streaming and premium pay-TV services. This marked a significant increase from the $50 million profit recorded a year prior and followed a profitable full-year in 2023.
By the end of March, Warner Bros. Discovery had amassed 99.6 million global streaming subscribers, surpassing expectations and demonstrating growth in its subscriber base. The company’s segment revenue remained stable at $2.46 billion, boosted by price hikes for subscribers and growth in advertising revenue, particularly from Max U.S. ad-lite subscriber gains.
Analysts had forecasted mixed results for the first quarter in the DTC unit, predicting an increase in OTT subs and segment revenue. Warner Bros. Discovery’s venture into the streaming business comes as industry giants like Netflix set the pace, prompting Hollywood conglomerates to focus on profitability rather than just subscriber growth.
During an analyst call, Zaslav discussed future plans to collaborate with Disney on bundling streaming services. Additionally, Warner Bros. Discovery is in talks to retain NBA media rights as negotiations with the league progress.
However, the company faced challenges in its studios and networks segments, as studio results were impacted by production delays due to Hollywood strikes. Despite this, theatrical revenue saw significant growth, driven by successful releases like “Dune: Part Two” and “Wonka.”
Warner Bros. Discovery’s first-quarter results showed a decline in total revenue and EBITDA, leading to a quarterly loss, primarily attributed to acquisition-related expenses. While the results fell short of Wall Street estimates, Zaslav highlighted operational successes in key performance indicators, particularly in the streaming business.
Looking ahead, Warner Bros. Discovery aims to capitalize on opportunities in the streaming industry by expanding its offerings and content lineup. The company also remains focused on generating strong free cash flow and making strategic moves to position itself for future growth. Shares of Warner Bros. Discovery experienced a slight decline in pre-market trading following the earnings report.