Key Takeaways
- Warner Bros. Discovery disclosed a Q4 deficit of 10 cents per share, significantly below the anticipated 3-cent loss.
- Sales decreased 6% to $9.46 billion, while linear networks adjusted EBITDA plummeted 27% to $1.41 billion.
- HBO Max gained 3.5 million new subscribers, pushing total membership to 131.6 million, with revenues climbing 5% to $2.8 billion.
- WBD evaluates a $31 per share proposal from Paramount Skydance alongside its current $27.75 per share agreement with Netflix.
- Netflix CEO Ted Sarandos planned a Thursday White House visit to address the streaming company’s acquisition proposal.
Warner Bros. Discovery unveiled its fourth-quarter financial results Thursday, falling short of analyst projections as its legacy television and movie operations faced ongoing headwinds.
The media conglomerate recorded a deficit of 10 cents per share. Wall Street analysts had projected a much smaller loss of 3 cents per share, based on FactSet consensus figures.
Quarterly sales totaled $9.46 billion, representing a 6% year-over-year decline. The figure aligned closely with LSEG’s consensus projection of $9.35 billion.
Warner Bros. Discovery, Inc., WBD
WBD shares climbed a modest 0.1% to $28.91 during premarket hours, though trading direction remained uncertain.
The traditional cable and broadcast television operations experienced another challenging quarter. Discovery’s Linear Networks division reported revenues dropping 12% to $4.2 billion. The segment’s adjusted EBITDA contracted 27% to $1.41 billion — meeting analyst expectations but representing a substantial deterioration.
The theatrical and television production divisions also faced difficulties. Adjusted operating income collapsed 23% to $728 million. The movie studio lacked significant theatrical debuts during the fourth quarter following nine chart-topping releases throughout 2025.
The television production arm suffered from content licensing cycle timing issues, resulting in an 18% revenue contraction.
Streaming Division Shows Resilience
Despite broader challenges, some segments performed well. HBO Max delivered strong performance, fueled by popular programming including “Heated Rivalry” and “It: Welcome to Derry.”
The direct-to-consumer platform welcomed 3.5 million new members during the period, elevating worldwide subscriber count to 131.6 million. Streaming division revenues advanced 5% to approximately $2.8 billion.
Adjusted profits for the streaming operation decreased 4% to $393 million, attributed to the conclusion of an undisclosed distribution partnership.
Competing Acquisition Proposals
Financial performance has become almost a secondary consideration. Market attention centers squarely on the unfolding competitive bidding situation for Warner Bros. Discovery.
Last December, WBD reached an agreement to divest its streaming and production businesses to Netflix for $27.75 per share. Under that arrangement, cable properties would separate into a standalone entity for current shareholders.
Subsequently, Paramount Skydance escalated competitive tension by suggesting the potential for an enhanced all-cash proposal covering the entire Warner Bros. Discovery enterprise. This Tuesday, WBD’s board announced it would evaluate whether Paramount’s indication “could reasonably be expected” to constitute a superior transaction.
Paramount has contended that Discovery’s linear television properties hold negligible equity value, referencing Versant Media Group — CNBC’s parent company and considered a comparable business — and its trading performance since going public recently.
Netflix CEO Ted Sarandos had a Thursday White House meeting scheduled to address Netflix’s acquisition proposal, Politico reported, citing two informed sources. Netflix declined to provide immediate comment.
WBD’s board has yet to determine whether Paramount’s indication represents a superior alternative to the Netflix transaction. Should the board reach that determination, Netflix would receive four business days to modify its proposal.
Thursday’s earnings release contained no reference to ongoing Paramount discussions.
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