Warner Bros. Discovery outlines $2.4B studios EBITDA and 150M subscriber targets as streaming momentum builds

Earnings Call Insights: Warner Bros. Discovery (WBD) Q2 2025

Management View

President and CEO David M. Zaslav highlighted that “Warner Bros. became the first studio ever to open 5 consecutive films with more than $45 million in domestic box office.” Zaslav emphasized strong performance across film, television, and streaming, stating, “We’re seeing that momentum at Motion Pictures” and “at HBO Max, which again added more than 3.4 million subscribers in Q2 as it continues to launch in markets around the world.” He noted the Studios business is “on track to deliver at least $2.4 billion in adjusted EBITDA in 2025 with our site set on our $3 billion goal.”
Zaslav shared, “We have transformed HBO Max and have our Streaming business on track to exceed $1.3 billion in adjusted EBITDA in 2025 and reach over 150 million subscribers by the end of 2026.”
CFO Gunnar Wiedenfels stated, “It is important to understand that we have very significantly shifted the mix between external and internal content sales over the past 3 years. And that has sort of put pressure on our near-term financial results, but we have put a 10-digit figure of value in terms of intercompany profits parked on the balance sheet. That’s going to come back into the P&L over the next few years as JB utilizes this content and case utilizes this content on the HBO Max platform.”
President and CEO of Global Streaming & Games Jean-Briac Perrette noted, “Starting in September, it’ll actually start to see the messaging, which right now has been a fairly soft cancelable messaging start to get more fixed and such that people will have to take action as opposed to right now sort of having a voluntary process” regarding account sharing.

Outlook

Zaslav stated the Studios business is aiming for “at least $2.4 billion in adjusted EBITDA in 2025” and the Streaming business is “on track to exceed $1.3 billion in adjusted EBITDA in 2025 and reach over 150 million subscribers by the end of 2026.”
Perrette explained the company plans “big new international launches coming from Europe” in the first half of 2025, with “U.S. growth will reaccelerate starting in the second half of ’26 as we lap that reset” in HBO Max’s distribution deal.

Financial Results

Zaslav reported that HBO Max “added more than 3.4 million subscribers in Q2 as it continues to launch in markets around the world.”
Wiedenfels discussed a “meaningful impact on our revenue growth for a 12-month period until we lap this deal” regarding HBO Max’s U.S. distribution restructuring, but expects “a reacceleration, not only once we lap this deal, but also from the various market launches that we have in the pipeline.”
Wiedenfels stated, “You can expect roughly $100 million sports cost benefit in the fourth quarter. And then as we turn to 2026, there will be a net benefit of hundreds of millions of dollars from the rights cost coming out and some offsetting revenue losses from an EBITDA perspective.”

Q&A

Robert S. Fishman, MoffettNathanson, asked about content licensing strategy and the potential to license Warner Bros. and HBO content to third-party streamers. Zaslav responded that the company has “opted to sell significantly less than we could into the streaming market as well as the traditional market, because we’re seeing such growth and we’re driving towards such growth for our Studio business, which includes our streaming HBO Max.”
Jessica Jean Reif Ehrlich Cohen, BofA Securities, focused on future franchises and the halo effect. Zaslav described plans for “Harry Potter,” “Superman,” “Lord of the Rings,” and “Wonder Woman” as tent poles, noting “a big piece of the DC strategy laid out” and a “balanced portfolio that’s much more focused on the economics of each of these.”
Michael Ng, Goldman Sachs, inquired about DC franchises in theme parks and live events. Zaslav said, “We’ve gotten back some of our rights that were given to Six Flags and freed up DC in a way that we think can be very compelling.”
John Christopher Hodulik, UBS, asked about ARPU drivers and pricing power. Zaslav explained, “Our strategy hasn’t been to try and raise a lot of price. We want the market to accept the product, to recognize it as high quality…that gives us what we think is a very big upside over time to raise price on the highest quality service.”
Richard Scott Greenfield, LightShed Partners, asked about engagement for ad-supported subs from MVPDs. Perrette answered, “Every deal starts with a very healthy LTV profile, a wholesale sub versus what we think we could get and what we have to spend to get on a retail basis.”

Sentiment Analysis

Analysts’ tone was largely constructive but focused on monetization, franchise strategy, and the impact of licensing and distribution changes. Questions were direct, with some skepticism regarding growth levers and pricing power.
Management maintained a confident and optimistic tone throughout, emphasizing momentum, strategic clarity, and disciplined investment in IP and global expansion. Phrases such as “we feel really good about where we are” and “we have real momentum there” underscore the positive outlook.
Compared to the previous quarter, management’s tone remains upbeat, though current questions from analysts reflect a heightened focus on operational execution, cost benefits, and franchise monetization.

Quarter-over-Quarter Comparison

Guidance language has shifted to more explicit, forward-looking targets for Studios and Streaming adjusted EBITDA and subscriber milestones.
Strategic focus has narrowed on leveraging proprietary IP, international expansion, and strengthened cost discipline, particularly in sports rights and content licensing.
Analysts’ questions in the current quarter emphasize execution and monetization of key assets, while previous quarter questions were broader, exploring structural changes and platform engagement.
Key metric changes include reporting 3.4 million HBO Max subscriber additions this quarter and explicit targets for $2.4 billion Studios adjusted EBITDA and 150 million streaming subscribers.
Management confidence remains high, with a reinforced message of global momentum and synergy across platforms, compared to a similarly positive but slightly broader tone last quarter.

Risks and Concerns

Management noted near-term financial pressure from shifting the mix between external and internal content sales, with value expected to flow through in future periods.
Wiedenfels highlighted the restructuring of the HBO Max U.S. distribution deal as a temporary headwind to revenue growth.
The impact of sports rights costs and the transition away from NBA rights were called out, with expected cost benefits in upcoming quarters.
Perrette identified ongoing challenges in reducing churn and converting unauthorized account sharing into paying customers, with aggressive efforts planned for the remainder of 2025 and into 2026.

Final Takeaway

Warner Bros. Discovery management underscored strong creative and operational momentum, with clear targets for Studios and Streaming adjusted EBITDA and a subscriber milestone set for 2026. The company is leveraging its deep IP portfolio, disciplined content and licensing strategy, and global expansion to drive growth, while also addressing near-term headwinds related to distribution restructuring and sports rights costs. Strategic investments in franchises and operational improvements underpin management’s confidence in sustainable long-term value creation.

Read the full Earnings Call Transcript