Warner Bros. Discovery reported a net loss of $148 million for the third quarter of 2025, a reversal from a $135 million profit in the same period a year earlier. Total revenue fell 6% year‑over‑year to $9.05 billion, driven by a 22% decline in global linear network revenue and a 3% drop in content revenue. Adjusted EBITDA rose 2% sequentially to $2.47 billion, reflecting a 27.3% margin and a 13% beat on consensus estimates.
The streaming and studios segment generated $5.28 billion in revenue, up 8% YoY, and delivered a profit of $1.0 billion, a 58% increase. The growth was largely powered by a 2.3 million subscriber addition to Max, bringing the platform’s total subscribers to 128 million. In contrast, the global linear networks segment saw revenue slide 22% to $3.8 billion and profit fall 20% to $1.7 billion, as advertising revenue declined 17% and domestic linear audiences dropped 9% from the prior year.
Earnings per share were $‑0.06, beating the consensus estimate of $‑0.04 and surpassing the prior‑year loss of $‑0.09. The beat was driven by disciplined cost management and a favorable mix shift toward higher‑margin streaming and studio operations, which offset the revenue shortfall. Revenue missed the consensus of $9.18 billion by roughly $0.14 billion, largely because the linear network decline was steeper than expected and content revenue fell 3% ex‑FX.
Management reiterated its plan to split the company into a streaming‑and‑studios entity and a global‑networks entity by mid‑2026, and confirmed it is reviewing strategic alternatives, including a potential sale of all or part of the business. Paramount Skydance made offers in September and October 2025, with the latest proposal valuing the company at $23.50 per share, but the board has rebuffed these offers. The company maintained its 2025 guidance, signaling confidence that the split and strategic review will unlock value and improve operational focus.
Analysts noted the EPS beat but were disappointed by the revenue miss, which tempered the market’s reaction. The stock fell 1.14% in pre‑market trading, reflecting concerns about top‑line growth and the uncertainty surrounding the company’s future structure. Management’s emphasis on cost discipline, the growth of Max, and the long‑term EBITDA target of $3 billion for the studios segment suggest a focus on building a high‑margin, subscription‑driven business model.
"By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape," CEO David Zaslav said. He added that the company remains bullish on its streaming platform and that the split will create significant long‑term shareholder value.
The company’s debt profile has improved, with net leverage at 3.3x after repaying $1 billion from its bridge loan facility in Q3. The focus on debt reduction, combined with the strategic split, positions Warner Bros. Discovery to pursue growth opportunities in streaming, content creation, and global distribution while managing legacy network challenges.
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