Warner Bros. Discovery‘s streaming business lost subscribers — and money — in the second quarter of 2023.
The company shed 1.8 million streaming subs from April to June, which was the quarter when HBO Max and Discovery+ came together to form Max. The loss was not unexpected, and the company now has 95.8 million total streaming subscribers. Max launched on May 23; Discovery+ remains available as a standalone platform.
Warner Bros. Discovery had added 1.6 million total streaming subscribers from January to March, and the streaming business turned a surprise $50 million profit before interest, taxes, depreciation, and amortization. Those were not the case this time around — though the segment’s loss was just $3 million, and the EBITDA is still positive for the first half of the year.
After the Q1 results, President and CEO David Zaslav predicted his streaming business would be profitable for 2023 as a whole. We expect an update on that prediction during the company’s second-quarter earnings conference call, which begins at 8 a.m. ET. Though really, Zaslav and his senior-executive team will probably want to mostly talk about “Barbie,” which to-date has made more than $381 million domestically and more than $800 million worldwide. While those results won’t count until WBD’s third quarter, the Q2 press release was (weirdly) coated in Barbie Pink.
Warner Bros. Discovery missed on Wall Street’s top- and bottom-line estimates for the second quarter. Analysts had forecast a Q2 loss of 37 cents per share and revenue of $10.46 billion in revenue. Warner Bros. Discovery reported a loss of 51 cents per share on $10.358 billion in revenue.
Overall, the company lost $1.2 billion in Q2; with some fancy feats of corporate accounting, WBD’s adjusted EBITDA was $2.1 billion.
Warner Bros. Discovery posted an impressive Q2 free-cash flow number ($1.7 billion) and paid down a bunch ($1.6 billion) of its very substantial debt. The company ended the quarter with $3.1 billion of cash on hand and $47.8 billion of gross debt.
In Q1, Warner Bros. Discovery lost $1.1 billion on a (non-adjusted) net basis. Warner Bros. Discovery in totality has not turned a profit since forming via the April 2022 merger of WarnerMedia (then under AT&T) and Discovery, Inc. The company lost $3.4 billion in that merger quarter (Q2), then $2.3 billion (Q3 2022), and $2.1 billion (Q4 2022).
The Max rollout probably stole the show in the June quarter. (It certainly wasn’t “The Flash.”) The majority of the final “Succession” season aired during the period, as did the entirety of “Barry’s” own swan song. “The Idol” debuted in the quarter, airing most of its episodes by the June 30 cutoff.
Ben Affleck and Matt Damon’s “Air” came out theatrically in early April and on Amazon Prime Video a month-and-change later. “Evil Dead Rise” had plenty of life in it given a small budget. “The Flash,” which was supposed to be the big hit, was an abject bomb when it came out in mid-June.
