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, despite reporting a $2.9 billion net loss driven by a $2.8 billion Netflix termination fee and $1.3 billion in acquisition-related expenses.

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

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

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

Financial highlights

• Streaming business turned from a $2 billion loss to $1.4 billion profit in 2025, with Q1 2026 streaming revenues up 7% and adjusted EBITDA up 17%.

• Studios segment revenues rose 31%, with adjusted EBITDA up $516 million, driven by strong content licensing and international expansion.

• Global Linear Networks revenues declined 9%, with advertising revenues down 8% and distribution revenues flat.

• 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 at quarter-end.

Outlook and guidance

• Expect to surpass 150 million global streaming subscribers by year-end 2026, with continued acceleration in subscriber-related revenue growth.

• Management anticipates ongoing headwinds in linear TV and advertising, with continued 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 per share cash payout and a ticking fee if delayed past September 30, 2026.

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

• Ongoing negative cash impacts from sale and restructuring activities expected throughout 2026.