Aug 3, 2023

Warner Bros. Discovery Q2 Financials: Revenue/Streaming Subscribers Decline, Free Cash Flow Increases

Warner Bros. Discovery today announced its Q2 results, reporting better-than-expected free cash flow, despite lower-than-expected share prices and lower streaming subscriber numbers.

Conclusion: The company posted a net loss ofド1.24billion, or 51 cents per share, which is better than analysts had predicted ahead of today's report, but still, it is improving above last year's Q2 loss of 3 3.4B, or share1.50a share.

What hurts WBD the most in Q2 - the most public Warner Bros. The Discovery Flop was a flash, and despite its huge budget and incredible marketing push, it only managed to make226800 million at the box office. The company also continued to struggle with advertising sales as linear TV viewers declined. The company's studio unit in charge of theater functions reported revenue of 2.58 billion analysts, missing analyst estimates of 3.21 billion analysts. Barbie's incredible box office success does not appear until the results of the company's third quarter.

Streaming: Warner Bros. Discovery lost 1.8 million streaming subscribers during the quarter at the same time as the merger of hbo Max and Discovery+. Hbo, Max, and Discovery+worldwide currently have a total of 9,580 million subscribers. With about 400 million customers subscribed to both Discovery+ and HBO Max, and likely to cancel one or the other after moving to Max, WBD's direct consumer unit posted revenue ofド273,000 million, surpassing analysts' estimate ofト248,000 million, despite the constant subscriber decline associated with the merger.

What about the Company's Debt - CEO David Zaslav reiterated that the incredible debt reduction that existed when Discovery completed its acquisition of Warnermedia was one of his main objectives.1 Last quarter, WBD was able to pay back 47.8B of the remaining deficit, leaving the companyと1.16B in the hole.

There is a Silver Lining- Zaslav stressed the importance of generating free cash flow, which leads to the greatest positive takeout from today's results. According to the CEO, the company now has an overall free cash flow of778900 million, compared with昨年17 billion in the same quarter of last year 2000.

What they are saying - In a letter to shareholders, Zaslav said:

The important work we are doing to transform our business for the future continues to drive our strong financial performance, as demonstrated by meaningful improvements in our balance sheet and an increase in our synergy target of over55 billion. In this quarter alone, free cash flow has exceededド1.7 billion, and we remain bullish on deleveraging stories, and we expect to comfortably fall below 4.0 times by the end of the year and reach our total leverage target by the end of 2024 of 2.5-3.0 times. All of that includes our direct consumer business, which has generated positive EBITDA in the first half of the year following the successful launch of Max in the U.S., leaning toward growth opportunities that ultimately increase shareholder value.