Warner Bros. Discovery (WBD) reported its first quarterly report since the $43 billion merger as the company battles consolidation challenges.
The media conglomerate swung to a $3.42 billion loss in the second quarter, partly due to obstacles related to its recent merger. The stock plummeted in after-hours trading, down as much as 9%.
Here are Warner Bros. Discovery second quarter results compared to Wall Street’s consensus estimates, as compiled by Bloomberg:
- Revenue: $9.82 billion versus$11.91 billion expected
- Total DTC subscribers: 1.7 millionnet additions versus1.65 million net additions expected
In total, the company said it ended the second quarter with 92.1 million subscribers across its streaming platforms, up about 1.7 million from the first quarter. It expects to see 130 million global streaming subscribers by 2025.
The leadership team doubled down on the importance of high content spend, explaining that reducing churn remains the number one factor amid increased competition.
CEO David Zaslav maintained that content spend will go up each year in the years to come.
The company estimated that EBITDA for global streaming will hit $1 billion by 2025 with the streaming business breaking even by 2024. It expects peak EBITDA loss in streaming by this year.
Zaslav added that the company is weighing a free, ad-supported streaming plan, too.
Still, despite the growth plans, analysts anticipate messy quarters to come as the streaming conglomerate works to integrate the two businesses, drive free cash flow, and deleverage its balance sheet.
Warner Bros. Discovery previously said it expects to slash $3 billion worth of costs over the next two years, and distribute those savings into streaming content.