Fourth Quarter Highlights

For the quarter that ended on December 31st, Warner Bros reported revenue of $10.28 billion that came short of LSEG’s estimate of $10.35 billion. 

Warner Bros made a fourth-quarter net loss of $400 million, or 16 cents per share, narrowing down its 2023’s comparable quarter loss of $2.1 billion, or 86 cents per share. Adjusted EBITDA dropped 5% YoY to $2.5 billion, with the drop attributed to the underperformance of studio revenue that was the result of the unforseen WGA and SAGAFTR strikes. Studio revenue tanked 17% to $3.17 billion.

Excluding the impact of foreign currency exchange, Discovery reported a 14% decline in linear television advertising revenue with a 4% drop in actual distribution revenue.

On a brighter note, Warner Bros Discovery ended 2023 with a 86% YoY rise in free cash flow that amounted to $6.16 billion. With the Olympic Games on this year’s repertoire, CFO Gunnar Wiedenfels is expecting another strong year of FCF but declined to provide an official guidance. 

Although Warner Bros still has $44.2 billion of gross debt, it paid off $12 billion of debt over the last two years.

Warner Bros Made Streaming History 

Warner Bros got ahead of the legendary Disney, Comcast and its NBCUniversal, as well as Paramount Global by reaching profitability on the streaming front. Max wrapped up 2023 by becoming profitable, with full-year adjusted EBITDA amounting to $103 million. This success is owed to dramatically lowered content spending.

Although Warner Bros expects Max another profitable full-year, it will be in for a loss during the first half of the year due to increased content spending. By the end of the year, Max’s advertising tier that is currently only available in the U.S., will expand to 40 international markets. Warner Bros guided for Max’s 2025 EBITDA of $1 billion for 2025.

For the quarter, Max expanded its global direct-to-consumer subscribers to 97.7 million, which represents a 2% increase compared to the previous quarter.

Disney+ reported 111.3 million core subscribers in the fourth quarter, as it lost 1.3 million subscribers due to price hikes. But Disney, the preeminent creator of entertainment content on the planet, is merely claiming it's on track to become profitable by the end of this fiscal year.

Warner Bros Discovery told a remarkable turnaround story in the streaming kingdom.

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