Everything Warner Bros. Discovery’s Mixed Q3 Results Tell Us
Movieguide® Contributor
Warner Bros. Discovery’s Q3 report Thursday revealed it has over 110 million global subscribers across Max, HBO and Discovery+.
However, “box office sales fell 40% when compared to last summer’s blockbuster BARBIE,” Variety reported on Nov. 7.
“Direct-to-consumer sales rose 9% to $2.6 billion. Distribution was up 8%, ad sales 51% and content down 11% during the quarter, which saw Warner Bros. Discovery air the second season of HOUSE OF THE DRAGON, as well as Olympics programming across international territories and Discovery’s SHARK WEEK programming block,” Variety reported.
CEO David Zaslav believes the company will exceed its $1 billion streaming goal next year. Some “very soft messaging” about password sharing near the end of the year will help boost the company’s profit.
The Q3 news has boosted the company’s stock up by 15.26% ($1.28).
“In its studios segment, WBD saw a 17% drop in revenue to $2.7 billion,” Variety said. “TV revenue was up 30%, while video game sales were down 31% (‘SmashBros’-style game ‘MultiVersus’ couldn’t touch last year’s hit ‘Hogwarts Legacy’) and theatrical dropped the above-mentioned 40% with weaker performance for BEETLEJUICE BEETLEJUICE and TWISTERS in comparison to 2023’s BARBIE.”
Gunnar Wiedenfels, WBD’s chief financial officer, said WBD took “another 100 million-dollar-plus impairment” charge for games due to “underperforming releases.” This makes the companies “write-down” in games $300 million in total.
Deadline added, “The July-to-September quarter did not reflect two recent setbacks for WBD: the October release of JOKER: FOLIE À DEUX, the biggest movie flop of 2024; and the loss of NBA rights, which will take effect in 2025, after the current season. While the NBA remains in place for now, its disappearance next year after nearly four decades in the Turner fold has prompted worries about the potential impact on carriage fees for TNT and other networks.”
WBD (Warner Bros. Discovery) just locked in a deal with Charter that will allow millions of Charter’s subscribers to get Max for free…
READ MORE: WBD MAKES MAX FREE FOR MILLIONS IN NEW DEAL
The company had an increase in its network division by 3%. Content revenue increased by 87%, and ad sales dropped to 11%. Distribution also dropped by 7%.
“Wall Street forecast a loss of earnings per share (EPS) of 9 cents on $9.8 billion in revenue, according to analyst consensus data provided by LSEG. Warner Bros. Discovery reported diluted EPS of 5 cents, a profit of $135 million, on $9.6 billion in revenue,” Variety reported.
The company now has $40.7 billion in debt with $632 million of free cash flow.
Zaslav told shareholders:
“Warner Bros. Discovery’s Q3 results demonstrate once again that while we continue to confront extraordinary disruption in our environment, the strategy we have undertaken to ready Warner Bros. Discovery for future success is showing important results. Thanks to our rapid international expansion and continued investment in high quality, diverse content, we saw momentum accelerate in our global Direct-to-Consumer business in Q3.
In total, Max delivered 7.2 million net subscriber adds, the strongest quarterly gain since the platform’s launch, resulting in healthy subscriber-related revenue growth and meaningful progress toward achieving our 2025 Direct-to Consumer segment financial objectives. Likewise, our recently announced strategic partnership with Charter Communications, for both linear network distribution and bundling of Max, not only reinforced the value of our content portfolio, but represented our willingness to work with our partners to enhance the consumers’ experience as our industry undergoes transformation.”
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