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Dec 31, 2024
Warner Bros Discovery Q4 2024 Earnings Report
Warner Bros Discovery reported Q4 2024 results with strong DTC growth, increased profitability, and continued cash flow generation.
Key Takeaways
Warner Bros Discovery (WBD) saw strong Direct-to-Consumer (DTC) growth in Q4 2024, with a 20% increase in DTC subscribers and significant Adjusted EBITDA improvements. The company generated $2.7 billion in operating cash flow and $2.4 billion in free cash flow. Networks revenue declined 4% year-over-year, while Studios revenue grew 15%. Net income was reported at -$494 million, including restructuring expenses and content fair value step-up charges.
Total revenue of $10.03 billion, down 2% year-over-year.
DTC revenue grew 5% to $2.65 billion, driven by 6.4M new subscribers.
Studios revenue increased 15% to $3.66 billion, with strong TV content licensing.
Free cash flow of $2.43 billion, despite higher content investment.
Forward Guidance
Warner Bros Discovery expects continued strong DTC growth in 2025, targeting 150 million global subscribers by 2026. Networks and Studios are expected to improve performance, with Studios benefiting from a stronger content pipeline and Games undergoing restructuring.
Positive Outlook
- DTC Adjusted EBITDA expected to grow to $1.3 billion in 2025.
- Max to expand into new international markets, including Germany and Italy in Q1 2026.
- Networks' multi-year pay TV renewals provide revenue stability.
- Studio performance expected to improve with new releases and restructuring.
- Leverage reduction remains a key priority, targeting 2.5-3.0x gross leverage.
Challenges Ahead
- ARPU growth may be impacted by lower-priced ad-supported tier and new market rollouts.
- Networks advertising revenue faces continued secular decline.
- Motion Pictures and Games segments need turnaround efforts to improve profitability.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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