Earnings Call Insights: Warner Bros. Discovery (WBD) Q3 2025
Management View
- CEO David Zaslav stated that Warner Bros. Discovery is delivering on its transformation plan, observing, “We’re delivering on our promise and Warner Bros. Discovery is back, global and stronger than ever.” Zaslav emphasized regaining industry leadership in studios, noting, “Right now, we’re leading the 2025 box office domestically, we’re leading it internationally, and we’re leading it globally.” He highlighted that the company is “the only film studio to have crossed $4 billion in 2025 box office revenue thus far,” and referenced new original stories and successful launches, including a new era for DC Studios with Superman and horror hits Weapons and The Conjuring: Last Rites.
- Zaslav announced an expanded film slate with a new Gremlins movie set for theatrical release on November 19, 2027, produced by Steven Spielberg and directed by Chris Columbus.
- The CEO pointed to the scaling of HBO Max globally, now with availability in more than 100 countries and growth of over 30 million new streaming subscribers in three years. He projected, “By the end of next year, we will have more than 150 million total streaming subscribers.”
- Zaslav shared that the Streaming segment will contribute more than $1.3 billion in EBITDA this year, reversing a $2.5 billion loss three years ago. He also referenced ongoing launches in major markets like Germany, Italy, the U.K., and Ireland for 2026.
- In linear networks, Zaslav described the brands as “indispensable to tens of millions of subscribers worldwide,” and highlighted their resilience as cash flow contributors.
- The CEO reported a net leverage ratio now down to 3.3x EBITDA, including repayment of $1 billion from the bridge loan facility in the third quarter. The company is “on track to create 2 strong, well-capitalized businesses that can each create significant long-term shareholder value.”
- CFO Gunnar Wiedenfels remarked, “You’re going to see hundreds of millions of dollars of benefit next year from that transition” after restructuring the sports portfolio and moving away from NBA rights. He also noted, “The important change that we’re working on and making great progress is the development of our stand-alone sports streaming app.”
Outlook
- Zaslav projected the studios “to meaningfully exceed $2.4 billion in EBITDA this year,” and reiterated the goal of reaching $3 billion in studio EBITDA. He stated, “By the end of next year, we will have more than 150 million total streaming subscribers.”
- HBO Max launches are planned in Germany, Italy, the U.K., and Ireland in 2026.
- Management expects “the balance of content…for HBO Max…has finally come into full form,” and expressed confidence in further engagement and subscriber growth as content expands.
Financial Results
- Zaslav reported that Warner Bros. Discovery is “the only film studio to have crossed $4 billion in 2025 box office revenue thus far.”
- The Streaming segment is expected to deliver more than $1.3 billion in EBITDA this year, compared to a loss of $2.5 billion three years ago.
- The company’s net leverage ratio is now 3.3x EBITDA after paying down $1 billion in bridge loan debt in the quarter.
Q&A
- Jessica Reif Cohen, BofA Securities, asked about monetizing the content library and the outlook for sports assets. Wiedenfels responded, “You’re going to see hundreds of millions of dollars of benefit next year from that transition” away from the NBA, and noted ongoing efforts to “revitalize some of those content brands…adding thousands of hours every year to that library.”
- Kannan Venkateshwar, Barclays, inquired about the rationale behind separate streaming apps and trends in linear distribution declines. Zaslav explained the CNN streaming strategy, describing the new product as “a very compelling proposition” and expressed optimism about its global scalability. Wiedenfels clarified the modular approach to app development and anticipated “a slightly better trajectory in the near to midterm” for linear distribution.
- Robert Fishman, MoffettNathanson, asked about scaling HBO Max and balancing new IP vs. franchises. Jean-Briac Perrette, President and CEO of Global Streaming & Games, cited strong international data and upcoming launches as key drivers of confidence, projecting 2026 as “the biggest year of growth that we’ve seen in a long time for HBO Max.”
- Ben Swinburne, Morgan Stanley, asked about bridging to the $3 billion EBITDA target and tax implications of strategic alternatives. Zaslav described a multi-pronged strategy leveraging known IP and original content, with an emphasis on further growth after reaching the $3 billion goal.
Sentiment Analysis
- Analysts focused on questions about monetization strategies, growth prospects for streaming, and the impact of sports rights transitions. The tone was generally curious and constructive, with a subtle undercurrent of seeking clarity on execution and the potential success of strategic initiatives.
- Management maintained a confident and optimistic tone throughout, frequently using phrases like “we are excited,” “we have high confidence,” and “we’re thrilled with our progress.” During exchanges, there was some reinforcement of prior points, but hesitancy was minimal, and responses remained direct and upbeat.
- Compared to the previous quarter, analyst skepticism focused more on operational specifics and strategic execution, while management continued to project strong confidence and stability.
Quarter-over-Quarter Comparison
- The company reiterated and expanded its commitment to studio leadership, with an emphasis on crossing $4 billion in box office revenue and an accelerated plan for high-profile franchise releases through 2027.
- Streaming targets were reaffirmed, but with new detail on upcoming launches in major European markets and a projected subscriber count of over 150 million by the end of 2026.
- Management tone remained assertive about growth, with more explicit references to monetization strategies for both the content library and sports assets.
- Analysts continued to focus on strategies for content monetization, ARPU trends, and the impact of sports rights changes, but with a greater emphasis on the operational implications of separating the company and expanding app offerings.
Risks and Concerns
- Management acknowledged industry headwinds in linear television, describing the need to “optimize our linear networks” and recognizing ongoing disruption.
- Wiedenfels noted the transitional impact of moving away from NBA rights, but emphasized cost benefits and the rollout of a stand-alone sports streaming app.
- The company faces execution risk in global scaling of streaming, maintaining premium ARPU, and further leveraging its expansive content library.
Final Takeaway
Warner Bros. Discovery’s management underscored its momentum in studio leadership, global streaming expansion, and disciplined financial management in Q3 2025. With robust content slates, an expanding international footprint for HBO Max, and strategic actions to optimize both sports and linear networks, the company outlined clear targets for EBITDA growth and subscriber scaling, aiming to drive sustained long-term shareholder value through operational execution and strategic separation.