Warner Bros Discovery reports $1.24 billion loss in Q2

Warner Bros Discovery has reported a Q2 net loss of $1.24 billion along with a loss of 1.8 million global subscribers since the end of the first quarter.

In its second quarter earnings for 2023, the American company reported its revenues at $10.3 billion, down by 4% ex-FX compared to the prior year quarter.

The net loss of WBD included $1.6 billion of pre-tax amortization from acquisition-related intangible assets and $146 million of pre-tax restructuring expenses.

The subscribers stand at 95.8 million at the end of Q2 compared to 97.6 million subscribers at the end of Q1.

Q2 total Adjusted EBITDA for WBD was USD 2.1 billion, which is up by 23% ex-FX compared to the prior year quarter, on a combined basis.

According to the statement, the cash provided by operating activities increased to $2 billion and the free cash flow increased to $1.7 billion.

The company reported a gross debt of $47.8 billion with $3.1 billion of cash on hand. It said that it has repaid $1.6 billion of debt during Q2.

“The important work we are doing to transform our businesses for the future continues to drive our strong financial performance as demonstrated by meaningful improvements to our balance sheet and our now increased synergy target of more than $5 billion.

“This quarter alone we reported over $1.7 billion in free cash flow, and we remain bullish with respect to our delevering story and expect to be comfortably below 4.0x levered by the end of the year and at our target of 2.5-3.0x gross leverage by the close of 2024. All of which positions us well to lean into growth opportunities that will ultimately drive shareholder value, to include our Direct-to-Consumer business, which, in the wake of the successful launch of Max in the U.S., is tracking well ahead of our financial projections, having generated positive EBITDA in the first half of the year,” said David Zaslav, President & CEO, WBD.

The operating expenses of WBD Studios segment decreased by 23% ex-FX compared to the prior year quarter on a pro forma combined basis.

The company also reported a distribution revenue decrease by 1% in its networks segment and recorded a decline in advertising revenue by 13 % in the same category.

In its Direct-To-Consumer (DTC) segment, WBD’s distribution revenue increased 2% ex-FX, as global Max/HBO Max retail subscriber and Amazon Prime Video Channels subscriber growth were partially offset by a decline in wholesale subscribers, the report said.