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WBD sees DTC profit; FY revenue down 4%

February 23, 2024

Warner Bros Discovery (WBD) has reported financial results for the quarter and year ended December 31st 2023.

Total Q4 revenues were $10.28 billion (€9.4bn). Revenues decreased 7 per cent ex-FX compared to the prior year quarter. Global DTC subscribers were 97.7 million at the end of Q4, which included 1.3 million subscribers from the acquisition of BluTV. DTC revenues increased 3 per cent ex-FX to $2.52 billion compared to the prior year quarter. Global DTC ARPU was $7.94, a 7 per cent ex-FX increase vs the prior year quarter.

Full-year total revenues decreased 4 per cent ex-FX to $41.3 billion compared to the prior year, on a combined basis. Streaming profits stood at $103 million, compared with a loss of nearly $2.1 billion in 2022.

Further Q4 highlights: 

  • Net loss available to WBD was $(400) million, including $1,69 billion of pre-tax amortisation driven by acquisition-related intangibles and $75 million of pre-tax restructuring expenses. 
  • Q4 total Adjusted EBITDA was $2.47 billion. Adjusted EBITDA decreased 5 per cent ex-FX compared to the prior year quarter. 
  • TNT Sports continued to strengthen its global sports portfolio with a four-year extension of its UK Premier League rights, as well as signing a seven-year agreement with NASCAR in the US beginning in 2025. 
  • In Q4, Adult Swim had the largest year-over-year primetime delivery growth in cable among P18-49 and P25-54, led by Rick and Morty as cable’s #1 comedy.
  • Studios revenues decreased 18 per cent ex-FX to $3.17 billion compared to the prior year quarter.
  • Content revenue decreased 20 per cent ex-FX.
  • TV revenue declined significantly primarily due to the impact of the WGA and SAG-AFTRA strikes and certain large licensing deals in the prior year.
  • Networks revenues decreased 8 per cent ex-FX to $5.03 billion compared to the prior year quarter. The AT&T SportsNet business exit negatively impacted the year-over-year growth rate by approximately 100 bps
  • Theatrical revenue increased due to the larger release slate in the current year quarter (Wonka, Aquaman and the Lost Kingdom and The Color Purple).
  • Games revenue increased meaningfully due to the continued performance of Hogwarts Legacy, including the Q4 launch on the Nintendo Switch.

David Zaslav, President and CEO of WBD, commented: “After executing against our strategic plan to reposition the company, we are now on solid footing with a clear pathway to growth. We generated $6.2 billion in free cash flow and paid down $5.4 billion in debt in 2023, which puts us at 3.9x net leverage. We have an attack plan for 2024 that includes the roll-out of Max in key international markets, a more robust creative pipeline across our film and TV studios, and further progress against our long-range financial goals and are confident in our ability to drive sustained operating momentum and enhanced shareholder value.”

Commenting on the results, Guy Meyers, Regional Director, Customer Success at Recurly, said: “Warner Bros Discovery is weathering the general financial climate well, all things considered, and today’s results reflect that. To see revenues increase again, Warner Bros and streaming companies in general need to reinvest in their content offering. This is the most effective way to bring users back and prevent subscriber churn on their streaming platforms. The appetite for good-quality streaming content is there—Warner Bros needs to continue evolving their service to remain ahead of its competitors.”

“Warner Bros occupies strong niches in areas like factual programming, for example, with Discovery+ focused on documentary and reality shows. By expanding platforms like this, it can solidify a strong base of loyal subscribers.  The announcement of their joint venture with Disney and Fox to bring live sports streaming to the masses is promising—tapping into an incredibly lucrative community of sports fans. If they can crack this particular audience with a combined offering of high quality sports content and extras, then the sky’s the limit for Warner Bros,” added Meyers.


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