Advanced Television

WBD sheds 1.8m DTC subs in Q2

August 3, 2023

Warner Bros Discovery (WBD) has reported financial results for the quarter ended June 30th.

David Zaslav, President and Chief Executive Officer of WBD, commented: “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 US, is tracking well ahead of our financial projections, having generated positive EBITDA in the first half of the year.”Q2 Financial Summary & Operational Highlights:

  • Q2 total revenues were $10.35 billion. Revenues decreased 4 per cent ex-FX, compared to the prior year quarter, on a combined basis.

  • Net loss available to WBD was $(1.24) billion, and included $1.65 billion of pre-tax amortisation from acquisition-related intangible assets and $146 million of pre-tax restructuring expenses.

  • Q2 total Adjusted EBITDA was $2.14 billion. Adjusted EBITDA increased 23 per cent ex-FX compared to the prior year quarter, on a combined basis.

  • Cash provided by operating activities increased to $2.01 billion. Reported free cash flow increased to $1.72 billion.

    • Q2 2023 cash provided by operating activities and reported free cash flow are not directly comparable to the prior year quarter due to the acquisition of the WarnerMedia business.

  • Repaid $1.6 billion of debt during Q2. Ended the quarter with $3.1 billion of cash on hand, $47.8 billion of gross debt, and 4.6x net leverage.

    • Launched a debt tender offer today for up to $2.7 billion. 

  • Global DTC subscribers decreased 1.8 million to 95.8 million at the end of Q2 vs. 97.6 million subscribers at the end of Q1.

  • Successfully launched new DTC product, Max, in the US on May 23rd.

  • Nominated for 181 primetime Emmy awards, including 127 nominations for HBO & Max – the most of any network or platform.

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