Warner Bros. Discovery reported second quarter earnings Thursday that were turbocharged by its studio business, even as its streaming business continued to its growth trajectory, and with linear TV still struggling in a tough environment.
The company reported revenue of $9.8 billion, up modestly from the same quarter a year ago, with net income of $1.6 billion (compared to a loss a year ago), and adjusted EBITDA of $2 billion, up 9 percent.
The quarter was powered by the company’s studios business, and to a lesser extent streaming, with studios revenue of $3.8 billion, up 55 percent from a year ago thanks to the performance of films like Minecraft and Sinners, as well as performance from the TV studios thanks to the timing of some renewals. Adjusted EBITDA was $863 million.
In a shareholder letter, WBD executives said that looking ahead the company intends to release 12-14 new films a year, split between 1-2 WB tentpoles, 1-2 DC Studios films, 3-4 New Line releases (including horror), 1-2 animated films, and 1-2 modestly budgeted original films.
In streaming, the company added 3.4 million subscribers, with revenue up 8 percent to $2.8 billion, and adjusted EBITDA of $293 million. HBO Max launched in multiple international markets, helping to spur growth, and the HBO Max ad product also drove ad revenue in streaming.
Linear TV, however, remains challenged, with the global linear networks division reporting revenue of $4.8 billion, down 9 percent from a year ago, and adjusted EBITDA of $1.5 billion, down 24 percent. While rights fee increased helped offset cord-cutting somewhat, lower viewership was a big driver of the decline, partly due to the absence of the NCAA March Madness Final Four this year.
The company said that it had completed the last of its six major carriage renewals, locking in those deals for some time, and said that its upfront was nearly complete.
The company is in the process of preparing to split itself in two, with the studios business, HBO, and HBO Max set to become a company called Warner Bros., and the linear networks set to become a company called Discovery.
