A year ago, Warner Bros. Discovery cashed in on the astonishing sales of Hogwarts Legacy, the game released in February 2023 that had sold more than 12 million units and generated $850 million in global sales in its first two weeks. CEO David Zaslav said at the time that games were key to the combined company’s strategy. It was a very tough competition for this year as the Suicide Squad: Kill the Justice League game, which also came out in February, was not a Hogwarts legacy.
Games are part of the Studios segment, whose revenue fell to $2.8 billion year-on-year from $3.2 billion in the first quarter of 2024, offsetting the decline in the theatrical business, which was extremely successful Dune: Part 2 And Godzilla x Kong: The New Empire. The division’s adjusted Ebitda fell sharply from over $600 million to $184 million. TV numbers felt the impact of last year’s strikes as fewer episodes were broadcast.
Overall, sales of $9.958 billion were below the previous year’s figure and fell short of Wall Street’s expectations of more than $10 billion. The same goes for a net loss per share of 40 cents.
One bright spot was streaming, with WBD adding 2 million subscribers to 99.6 million and seeing profits rise to $86 million from $50 million a year ago. Revenue increased, including a 70% increase in ad sales.
A new streaming package with Max, Disney+ and Hulu was announced yesterday, giving the stock a boost, and an upcoming sports JV with Disney and Fox will continue to focus on DTC in an 8 ET call with analysts.
Advertising is down across all media companies, and it’s down here too, down 11% to $1.99 billion in the network space. Distribution revenues were also weaker as the linear bundle declined.
Cash flow, which is critical to paying down debt, fluctuates from negative $930 million to positive $390 million. WBD ended March with cash on hand of $3.4 billion and gross debt of $43.2 billion. The company announced ahead of the releases this morning that it is buying up to $1.75 billion in debt.
One bright spot was streaming, where WBD added 2 million subscribers to 99.6 million and made a profit of $86 million, up from $50 million a year ago. Revenue increased, including a 70% increase in ad sales.
A new streaming package with Max, Disney+ and Hulu was announced yesterday, giving the stock a boost at the time, and an upcoming sports JV with Disney and Fox will continue to focus on DTC in an 8 ET call with analysts.
Advertising is down across all media companies, and it’s down here too, down 11% to $1.99 billion in the network space. Sales revenues were also weaker.
Good news: Cash flow, which is critical to paying down debt, rose from negative $930 million to positive $390 million. WBD ended March with $3.4 billion in cash and a still-high $43.2 billion in gross debt.
The company announced ahead of the releases this morning that it is buying up to $1.75 billion in debt.
“We are pleased with our progress in the first quarter, as evidenced by strong results across key KPIs. “We achieved significant growth in our streaming business with a significant acceleration in advertising sales and generated positive EBITDA of almost $90 million for the quarter,” Zaslav said. We will soon be launching Max in 29 countries across Europe, and the content offering for Max next year is one of our strongest ever. Warner Bros. Pictures also had a strong start to the year, becoming the first studio to reach $1 billion in revenue both overseas and worldwide, and there’s still a lot in the works. Importantly, even in our seasonally weakest FCF quarter, we once again delivered strong free cash flow. We continue to take bold steps to transform our business for the future and position ourselves to take full advantage of the opportunities that lie ahead.”