Warner Bros. Discovery (WBD) Q1 2026 earnings summary

Executive summary

• Achieved strong Q1 2026 results with over 140 million global streaming subscribers and projected to surpass 150 million by year-end, driven by HBO Max launches in key European markets.

• Reported a net loss of $2.9 billion for Q1 2026, primarily due to a $2.8 billion Netflix termination fee and $1.3 billion in pre-tax acquisition-related amortization and restructuring expenses.

• Revenues were $8.9 billion, down 1% year-over-year, with declines in advertising and linear networks offset by streaming and studios growth.

• Paramount Skydance agreed to acquire the company for $31 per share, with shareholder approval received and regulatory clearance pending.

• Adjusted EBITDA rose to $2.85 billion, up from $2.39 billion in Q1 2025, reflecting improved segment profitability despite overall losses.

Financial highlights

• Streaming business turned from a $2 billion loss to $1.4 billion profit last year, with double-digit bottom-line growth in Q1 2026.

• Studios segment revenues rose 31%, driven by strong TV and theatrical content licensing and international expansion.

• Streaming segment revenues increased 7%, with subscriber-related revenues up 8% and advertising revenue up 19%.

• Free cash flow was negative $476 million, impacted by higher content investment, tax payments, and $100 million in separation and transaction-related items.

• Cash and cash equivalents were $3.3 billion as of March 31, 2026.

Outlook and guidance

• Expect to surpass 150 million global streaming subscribers by year-end 2026.

• Studio adjusted EBITDA target of at least $3 billion annually remains in place.

• Management expects continued headwinds in linear TV and advertising, with ongoing declines in linear subscribers and softness in the U.S. ad market.

• The PSKY merger is expected to close pending regulatory approval, with a $31.00 per share cash payout plus a ticking fee if delayed past September 30, 2026.

• Ongoing investment in streaming and content creation, with a focus on global expansion of HBO Max.