Warner Bros. Discovery, Inc.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001437107-25-000096
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001437107-25-000192
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 215 previous paragraphs and 228 current paragraphs.
139 unchanged; 57 reworded; 32 added; 15 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
In June 2025, the Company announced its plans to separate the Company, in a tax-free transaction, into two publicly traded companies (the “Separation”). Warner Bros. will primarily consist of our Streaming and Studios reportable segments and include Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as its film and television libraries. Discovery Global will primarily consist of our Global Linear Networks reportable segment and include premier entertainment, sports and news television brands around the world including CNN, TNT Sports in the U.S., and Discovery, free-to-air channels across Europe, and digital products such as Discovery+ and Bleacher Report. The Separation is expected to be completed by mid-2026, subject to closing and other conditions, including final approval by the Warner Bros. Discovery Board, receipt of tax opinions with respect to the tax-free nature of the transaction for U.S. federal income tax purposes, and market conditions. There can be no assurance that the Separation will occur in accordance with the expected plans or anticipated timeline, or at all.
Current report
Distribution revenue remained flat for the three and six months ended June 30, 2025, primarily attributable to a 9% decline in domestic linear subscribers for the three and six months ended June 30, 2025, offset by a 22% increase in Streaming subscribers for the three and six months ended June 30, 2025 as a result of continued global expansion of HBO Max, including new distribution deals.
Current report
Content revenue increased 16% and decreased 7% for the three and six months ended June 30, 2025, respectively. The increase for the three months ended June 30, 2025 was primarily attributable to a 38% increase in theatrical product revenue as a result of higher film rental revenue, primarily due to the strong performance of A Minecraft Movie, Sinners, and Final Destination Bloodlines, which were released in the second quarter of 2025. The increase in theatrical product revenue was partially offset by lower television product revenue due to lower third-party licensing.
Current report
The decrease for the six months ended June 30, 2025 was primarily attributable to a decrease in television product revenue due to lower third-party licensing, a 34% decrease in games revenue attributable to no releases in 2025 compared to the prior year release of Suicide Squad: Kill the Justice League in the first quarter of 2024, and a decrease in home entertainment revenue due to the strong prior year performance of Dune: Part Two, Wonka, and Aquaman and the Lost Kingdom. The decrease for the six months ended June 30, 2025 was partially offset by an increase in theatrical product revenue attributable to higher film rental revenue due to the strong current year performance of A Minecraft Move, Sinners, and Final Destination Bloodlines.
Current report
Other revenue decreased 23% and 15% for the three and six months ended June 30, 2025, respectively.
Current report
Costs of revenues decreased 4% and 10% for the three and six months ended June 30, 2025, respectively. The decrease for the three months ended June 30, 2025 was primarily attributable to lower content expense related to the amortization of purchase accounting fair value step-up for content, lower domestic sports and content costs due to the timing of programming releases in our Streaming segment, and a 49% decrease in games content expense commensurate with lower games revenue. The decrease for the three months ended June 30, 2025 was partially offset by an 18% increase in theatrical product content expense as a result of higher film costs commensurate with higher theatrical product revenue.
Current report
Selling, general and administrative expenses were flat and decreased 1% for the three and six months ended June 30, 2025, respectively. For the three months ended June 30, 2025, higher overhead expenses were offset by lower marketing and personnel expenses. The decrease for the six months ended June 30, 2025 was primarily attributable to lower marketing expenses, partially offset by higher overhead costs.
Current report
Other Income, net
Current report
Other income, net was $139 million and $221 million for the three and six months ended June 30, 2025, respectively. (See Note 13 to the accompanying consolidated financial statements.)
Current report
Income Tax (Expense) Benefit
Current report
Income tax (expense) benefit was $(866) million and $7 million for the three months ended June 30, 2025 and 2024, respectively and $(881) million and $(129) million for the six months ended June 30, 2025 and 2024, respectively. The increase in income tax expense for the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily attributable to higher pre-tax book income, including a $3.0 billion gain recognized in connection with the Tender Offers in 2025 (See Note 8) and a non-cash goodwill impairment charge of $9.1 billion recorded in 2024, the majority of which was not deductible for tax purposes.
Current report
Adjusted EBITDA increased $400 million and $653 million for the three and six months ended June 30, 2025, respectively.
Current report
Content revenue increased 59% for the three months ended June 30, 2025, primarily attributable to a 115% increase in television product revenue and a 38% increase in theatrical product revenue, partially offset by a 14% decrease in games revenue.
Current report
•The increase in television product revenue was attributable to higher intercompany content licensing, primarily due to the timing of renewals.
Current report
•The increase in theatrical product revenue was attributable to higher film rental revenue, partially offset by lower content licensing. The increase in film rental revenue was primarily due to the strong performance of A Minecraft Movie, Sinners, and Final Destination Bloodlines, which were released in the second quarter of 2025.
Current report
•The decrease in games revenue was attributable to no releases in 2025.
Current report
Content revenue increased 18% for the six months ended June 30, 2025, primarily attributable to a 54% increase in television product revenue and a 3% increase in theatrical product revenue, partially offset by a 34% decrease in games revenue.
Current report
•The increase in television product revenue was attributable to higher intercompany content licensing, primarily due to the timing of renewals.
Current report
Other revenue decreased 5% and 6% for the three and six months ended June 30, 2025.
Current report
Costs of revenues increased 38% and was flat for the three and six months ended June 30, 2025. The increase for the three months ended June 30, 2025 was primarily attributable to an 87% increase in television product content expense and an 18% increase in theatrical product content expense, partially offset by a 49% decrease in games content expense commensurate with lower games revenue. The increase in television product content expense was due to higher costs commensurate with higher intercompany content licensing due to the timing of renewals. The increase in theatrical content expense was a result of higher film costs commensurate with higher theatrical product revenue.
Current report
Selling, general and administrative expenses increased 12% and 8% for the three and six months ended June 30, 2025. The increase for the three and six months ended June 30, 2025 was primarily attributable to higher theatrical marketing expenses. Additionally, the increase in theatrical marketing expense for the six months ended June 30, 2025 was partially offset by lower games marketing expenses.
Current report
Adjusted EBITDA increased $653 million and $728 million for the three and six months ended June 30, 2025, respectively.
Current report
Advertising revenue decreased 13% and 12% for the three and six months ended June 30, 2025, respectively, primarily attributable to audience declines in domestic networks of 23% and 25%, respectively, and the broadcast of the NCAA Final Fourand championship game in 2024, partially offset by the broadcast of the Stanley Cup Finalsin 2025.
Current report
Other revenue decreased 1% and was flat for the three and six months ended June 30, 2025, respectively.
Current report
Selling, general and administrative expenses decreased 6% and 2% for the three and six months ended June 30, 2025, respectively, primarily attributable to lower overhead costs.
Current report
Adjusted EBITDA decreased 25% and 19% for the three and six months ended June 30, 2025, respectively.
Current report
Bridge Loan Facility
Current report
During the three months ended June 30, 2025, we and WMH entered into a Bridge Loan Facility with JPMorgan Chase Bank, N.A. WMH drew $17.0 billion of the available Bridge Loan Facility to finance the early settlement of the Tender Offers, Consent Solicitations, and the repayment in full and termination of our $1,500 million 364-day senior unsecured term loan facility, and the payment of fees and expenses therewith and for general corporate purposes. The Bridge Loan Facility is expected to be refinanced prior to the Separation. The Bridge Loan Facility contains customary representations and warranties as well as affirmative and negative covenants. As of June 30, 2025, we were in compliance with all applicable covenants and there were no events of default under the Bridge Loan Facility.
Current report
•the occurrence of any event, change or other circumstances that could give rise to the abandonment of the Separation or pursuit of a different structure;
Current report
•failure to satisfy in a timely manner any of the conditions to the Separation or complete the Separation in a timely or favorable manner or at all;
Current report
•the effects of the announcement, pendency or completion of the Separation on our ongoing business operations;
Current report
•challenges related to obtaining permanent financing to refinance the Bridge Loan Facility on favorable terms in a timely manner or at all;
Removed paragraphs (15)
Previous report
Content revenue decreased 25% for the three months ended March 31, 2025, primarily attributable to a 27% decrease in theatrical product revenue as a result of lower film rental revenue and home entertainment revenue and a 48% decrease in games revenue. The decrease in content revenue was partially offset by the timing of Global Linear Networks third party licensing deals.
Previous report
Other revenue decreased 6% for the three months ended March 31, 2025.
Previous report
Other Income (Expense), net
Previous report
Other income (expense), net was $82 million for the three months ended March 31, 2025. (See Note 13 to the accompanying consolidated financial statements.)
Previous report
Income Tax Benefit
Previous report
Income tax expense was $15 million and $136 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in income tax expense was primarily attributable to variability in pre-tax book income and loss, the mix of jurisdictions to which they relate, and the effect of foreign operations.
Previous report
Advertising revenue increased 35% for the three months ended March 31, 2025, driven by an increase in ad-lite subscribers.
Previous report
Selling, general and administrative expenses increased 4% for the three months ended March 31, 2025, primarily attributable to higher overhead expenses, partially offset by timing of marketing costs.
Previous report
Adjusted EBITDA increased $253 million for the three months ended March 31, 2025.
Previous report
Content revenue decreased 17% for the three months ended March 31, 2025, primarily attributable to a 27% decrease in theatrical product revenue and a 48% decrease in games revenue, partially offset by a 4% increase in television product revenue.
Previous report
•The increase in television product revenue was attributable to higher intercompany content sales, partially offset by lower initial telecast revenue due to timing of deliveries in the current year.
Previous report
Selling, general and administrative expenses increased 5% for the three months ended March 31, 2025, primarily attributable to higher overhead expenses, partially offset by lower games marketing expenses.
Previous report
Adjusted EBITDA increased 63% for the three months ended March 31, 2025.
Previous report
Other revenue increased 1% for the three months ended March 31, 2025.
Previous report
Selling, general and administrative expenses increased 3% for the three months ended March 31, 2025, primarily attributable to higher marketing expenses.
Reworded paragraphs (57)
Previous wording
Warner Bros. Discovery is a leading global media and entertainment company that creates and distributes a differentiated and comprehensive portfolio of content and products across television, film, streaming, interactive gaming, publishing, themed experiences, and consumer products through brands including: Discovery Channel, Max, CNN, DC Studios, TNT Sports, HBO, Food Network, TLC, TBS, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Games, Adult Swim, Turner Classic Movies, and others.
Current wording
Warner Bros. Discovery is a leading global media and entertainment company that creates and distributes a differentiated and comprehensive portfolio of content and products across television, film, streaming, interactive gaming, publishing, themed experiences, and consumer products through brands including: Discovery Channel, HBO Max, CNN, DC Studios, TNT Sports, HBO, Food Network, TLC, TBS, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Games, Adult Swim, Turner Classic Movies, and others.
Previous wording
In December 2024, we announced that our board of directors had authorized the Company to implement a new corporate structure designed to enhance our strategic flexibility and create potential opportunities to unlock shareholder value. Under the new corporate structure, the Company will serve as the parent company for two distinct operating divisions: Streaming & Studios and Global Linear Networks. In the first quarter of 2025, we renamed our Direct-to-Consumer reportable segment to Streaming and our Networks reportable segment to Global Linear Networks. There were no changes to our reportable segments or the composition of our reportable segments as a result of these changes. We have included supplemental Streaming & Studios and Global Linear Networks division information and supplemental consolidating data within Management’s Discussion and Analysis of this Quarterly Report on Form 10-Q.
Current wording
In the first quarter of 2025, the Company renamed its Direct-to-Consumer reportable segment to Streaming and its Networks reportable segment to Global Linear Networks. There have been no changes to the Company’s reportable segments or the composition of our reportable segments as a result of these announcements. We have included supplemental Streaming & Studios and Global Linear Networks division information and supplemental consolidating data within Management’s Discussion and Analysis of this Quarterly Report on Form 10-Q.
Previous wording
Headwinds in the industry, such as continued pressures on linear distribution and declines in linear subscribers and continued softness in the U.S. linear advertising market, have had, and are expected to continue to have, a material impact on the operations and results of the Company, including a negative impact on the results of operations attributed to declines in linear advertising revenue. The increase of digital advertising available in the marketplace has also resulted in, and is expected to continue to result in, increased competition for advertising expenditures for both traditional linear networks and ad-supported tiers in streaming services. In addition, the imposition of tariffs by the U.S. government and any retaliatory tariffs from foreign governments, including tariffs directly or indirectly applicable to our industry, may negatively impact our operations and results, including by leading to higher productions costs or decreased spending by advertisers whose expenditures are sensitive to such actions or to general economic conditions.
Current wording
Headwinds in the industry, such as continued pressures on linear distribution and declines in linear subscribers and continued softness in the U.S. linear advertising market, have had, and are expected to continue to have, a material impact on the operations and results of the Company, including a negative impact on the results of operations attributed to declines in linear advertising revenue. The increase of digital advertising available in the marketplace has also resulted in, and is expected to continue to result in, increased competition for advertising expenditures for both traditional linear networks and ad-supported tiers in streaming services. In addition, the imposition of tariffs by the U.S. government and any retaliatory tariffs from foreign governments, including tariffs directly or indirectly applicable to our industry, may negatively impact our operations and results, including by leading to higher productions costs or decreased spending by advertisers whose expenditures are sensitive to such actions or to general economic conditions. We continue to closely monitor the ongoing impact of industry trends to our business; however, the full effects on our operations and results will depend on future developments, which are highly uncertain and cannot be predicted.
Previous wording
Advertising revenue decreased 11% for the three months ended March 31, 2025, primarily attributable to audience declines in domestic networks of 27%.
Current wording
Advertising revenue decreased 10% and 9% for the three and six months ended June 30, 2025, respectively, primarily attributable to audience declines in domestic networks of 23% and 25%, respectively, for the three and six months ended June 30, 2025 and domestic pricing pressures within our Streaming segment, partially offset by an increase in ad-lite subscribers.
Previous wording
Costs of revenues decreased 15% for the three months ended March 31, 2025, primarily attributable to a 41% decrease in theatrical product content expense, as a result of lower film costs commensurate with lower theatrical product revenue and lower payments to partners and participants, and a 66% decrease in games content expense due to a $187 million impairment related to Suicide Squad: Kill the Justice League in the prior year. In addition, costs of revenues was positively impacted by lower domestic Streaming content costs due to the timing of programming releases, and the timing of content, production, and news related spend at the Global Linear Networks segment.
Current wording
The decrease for the six months ended June 30, 2025 was primarily attributable to a 60% decrease in games content expense due to a $213 million impairment related to Suicide Squad: Kill the Justice League in the prior year and lower games content expense commensurate with lower games revenue, a 13% decrease in theatrical product content expense as a result of lower film costs due to lower payments to partners, lower content expense related to the amortization of purchase accounting fair value step-up for content, and lower domestic sports and content costs due to the timing of programming releases in our Streaming segment. The decrease for the six months ended June 30, 2025 was partially offset by higher international content costs to support HBO Max launches.
Previous wording
Depreciation and amortization decreased 18% for the three months ended March 31, 2025, primarily attributable to intangible assets acquired during the Merger that are being amortized using the sum of the months’ digits method, partially offset by the shortening of the useful lives of certain intangible assets.
Current wording
Depreciation and amortization decreased 17% and 18% for the three and six months ended June 30, 2025, respectively, primarily attributable to intangible assets acquired in connection with the acquisition of the WarnerMedia business (the “WarnerMedia Business”) from AT&T Inc. that are being amortized using the sum of the months’ digits method and the end of the useful life for certain intangible assets, partially offset by the shortening of the useful lives of certain intangible assets.
Previous wording
Restructuring and other charges increased 59% for the three months ended March 31, 2025. Restructuring and other charges primarily includes organizational restructuring costs and consulting fees. (See Note 3 to the accompanying consolidated financial statements.)
Current wording
Restructuring and other charges decreased 32% and 12% for the three and six months ended June 30, 2025, respectively. Restructuring and other charges primarily includes organizational restructuring costs and consulting fees. (See Note 3 to the accompanying consolidated financial statements.)
Previous wording
Impairments and loss on dispositions was $90 million for the three months ended March 31, 2025, primarily attributable to a $87 million ROU asset impairment charge related to the Hudson Yards, New York office lease. (See Note 13 to the accompanying consolidated financial statements.)
Current wording
Impairments and loss on dispositions were $26 million and $116 million for the three and six months ended June 30, 2025, respectively, primarily attributable to a $87 million ROU asset impairment charge related to the Hudson Yards, New York office lease in the first quarter of 2025. (See Note 13 to the accompanying consolidated financial statements.)
Previous wording
Interest expense, net decreased $47 million for the three months ended March 31, 2025, primarily attributable to lower debt during the period. (See Note 8 and Note 9 to the accompanying consolidated financial statements.)
Current wording
Interest expense, net decreased $55 million and $102 million for the three and six months ended June 30, 2025, respectively, primarily attributable to lower debt during the period. (See Note 8 and Note 9 to the accompanying consolidated financial statements.)
Previous wording
(Loss) gain on extinguishment of debt
Current wording
Gain on extinguishment of debt, net
Previous wording
During the three months ended March 31, 2025, the Company repaid in full at maturity $2,165 million of aggregate principal amount outstanding of its senior notes due March 2025, and redeemed in full $1,500 million aggregate principal amount outstanding of its senior notes due March 2026. (See Note 8 to the accompanying consolidated financial statements.)
Current wording
During the three months ended June 30, 2025, the Company commenced and completed the Tender Offers by purchasing senior notes and debentures in the aggregate principal amount of $17.7 billion and recorded a gain on extinguishment of debt of approximately $3.0 billion. Additionally, the Company repaid in full at maturity $487 million of aggregate principal amount outstanding of its senior notes due June 2025. (See Note 8 to the accompanying consolidated financial statements.)
Previous wording
Loss From Equity Investees, net
Current wording
Income (Loss) From Equity Investees, net
Previous wording
Losses from our equity method investees were $7 million for the three months ended March 31, 2025. The changes are attributable to our share of net earnings and losses from our equity investees. (See Note 7 to the accompanying consolidated financial statements.)
Current wording
Income (loss) from our equity method investees was $5 million and $(2) million for the three and six months ended June 30, 2025, respectively. The changes are attributable to our share of net earnings and losses from our equity investees. (See Note 7 to the accompanying consolidated financial statements.)
Previous wording
Income tax expense for the three months ended March 31, 2025, reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to the effect of foreign operations, changes in unrecognized tax benefits, and state and local income taxes.
Current wording
Income tax expense for the three and six months ended June 30, 2025, reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to the effect of foreign operations and changes in unrecognized tax benefits.
Previous wording
The Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million. Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024. As of March 31, 2025, we recognized a nominal income tax expense for Pillar Two GloBE minimum tax. The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on our future tax liability.
Current wording
The Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million. Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024. As of June 30, 2025, we recognized an immaterial income tax expense for Pillar Two GloBE minimum tax. The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on our future tax liability. (See Note 12 to accompanying consolidated financial statements.)
Previous wording
Distribution revenue increased 8% for the three months ended March 31, 2025, primarily attributable to a 23% increase in subscribers as a result of continued global expansion of Max, including new distribution deals, partially offset by lower global distribution ARPU due to a mix shift in the subscriber base across distribution channels, geography, and product type.
Current wording
Distribution revenue increased 9% and 8% for the three and six months ended June 30, 2025, respectively, primarily attributable to a 22% increase in subscribers as a result of continued global expansion of HBO Max, including new distribution deals, partially offset by the impact of a wholesale deal renewal and lower global distribution ARPU due to a mix shift in the subscriber base across distribution channels, geography, and product type.
Previous wording
Advertising revenue decreased 8% for the three months ended March 31, 2025, primarily attributable to audience declines of 27% in domestic linear networks, partially offset by an increase in ad-lite subscribers.
Current wording
Advertising revenue increased 17% and 25% for the three and six months ended June 30, 2025, respectively, primarily attributable to an increase in ad-lite subscribers, partially offset by domestic pricing pressures.
Previous wording
The current “independently-branded, regional products” referred to in (iv) above consist of TVN/Player and BluTV.
Current wording
The current “independently-branded, regional product” referred to in (iv) above consist of TVN/Player.
Previous wording
i. individuals who subscribe to Streaming products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-brand, regional products (currently consisting of TVN/Player and BluTV), that may be offered by us or by certain joint venture partners or affiliated parties from time to time;
Current wording
i. individuals who subscribe to Streaming products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-brand, regional products (currently consisting of TVN/Player), that may be offered by us or by certain joint venture partners or affiliated parties from time to time;
Previous wording
Global ARPU decreased 9% for the three months ended March 31, 2025, primarily attributable to growth in lower ARPU international markets. Additionally, global ARPU was negatively impacted by a 5% decrease in domestic ARPU for the three months ended March 31, 2025, primarily attributable to broader wholesale distribution of Max Basic with Ads.
Current wording
Global ARPU decreased 11% and 10% for the three and six months ended June 30, 2025, respectively, primarily attributable to a 33% increase year-over-year in international subscribers. Additionally, global ARPU was negatively impacted by an 8% and 6% decrease in domestic ARPU for the three and six months ended June 30, 2025, respectively, primarily attributable to broader distribution of HBO Max Basic with Ads.
Previous wording
Content revenue decreased 7% for the three months ended March 31, 2025, primarily attributable to lower third-party licensing as a result of launching Max in new international markets.
Current wording
Content revenue decreased 21% and 15% for the three and six months ended June 30, 2025, respectively, primarily attributable to lower third-party licensing as a result of launching HBO Max in new international markets.
Previous wording
Costs of revenues decreased 4% for the three months ended March 31, 2025, primarily attributable to lower domestic content costs due to the timing of programming releases, partially offset by higher international content costs to support Max launches.
Current wording
Costs of revenues decreased 6% and 5% for the three and six months ended June 30, 2025, respectively, primarily attributable to lower domestic sports and content costs due to the timing of programming releases, partially offset by higher international content costs to support HBO Max launches.
Previous wording
Selling, general and administrative expenses decreased 1% for the three months ended March 31, 2025, primarily attributable to lower marketing expenses and the release of previously recorded non-income tax reserves, partially offset by higher overhead expenses.
Current wording
Selling, general and administrative expenses decreased 10% and 4% for the three and six months ended June 30, 2025, respectively, primarily attributable to lower marketing costs. Additionally, the decrease for the six months ended June 30, 2025 was partially offset by higher overhead costs.
Previous wording
Excluded from the ARPU calculation are: (i) Revenue and subscribers for streaming products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-branded, regional products (currently consisting of TVN/Player and BluTV), that may be offered by us or by certain joint venture partners or affiliated parties from time to time; (ii) A limited amount of international discovery+ revenue and subscribers that are part of non-strategic partnerships or short-term arrangements as may be identified by the Company from time to time; (iii) Cinemax, Max/HBO hotel and bulk institution (i.e., subscribers billed on a bulk basis), and international basic HBO revenue and subscribers; and (iv) Users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires.
Current wording
Excluded from the ARPU calculation are: (i) Revenue and subscribers for streaming products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-branded, regional products (currently consisting of TVN/Player), that may be offered by us or by certain joint venture partners or affiliated parties from time to time; (ii) A limited amount of international discovery+ revenue and subscribers that are part of non-strategic partnerships or short-term arrangements as may be identified by the Company from time to time; (iii) Cinemax, Max/HBO hotel and bulk institution (i.e., subscribers billed on a bulk basis), and international basic HBO revenue and subscribers; and (iv) Users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires.
Previous wording
The following table presents, for our Studios segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (in millions).
Current wording
The following table presents, for our Studios segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (loss) (in millions).
Previous wording
Unless otherwise indicated, the discussion of percent changes below is on an ex-FX basis. The Studios discussion below also includes intra-segment revenue and expense between product lines, which represented less than 4% of total revenues and operating expenses for this segment for the three months ended March 31, 2025. Intra-segment revenue and expense are eliminated at the Studios segment level.
Current wording
Unless otherwise indicated, the discussion of percent changes below is on an ex-FX basis. The Studios discussion below also includes intra-segment revenue and expense between product lines, which represented less than 2% and 3% of total revenues and operating expenses for this segment for the three and six months ended June 30, 2025, respectively. Intra-segment revenue and expense are eliminated at the Studios segment level.
Previous wording
•The decrease in theatrical product revenue was attributable to lower film rental revenue and home entertainment revenue, partially offset by higher intercompany content sales. The decrease in film rental revenue was primarily due to the strong prior year performance of Dune: Part Two and Godzilla x Kong: The New Empire, which were released in the first quarter of 2024, as well as higher carryover from releases in the fourth quarter of 2023 compared to the fourth quarter of 2024. The decrease in home entertainment revenue was primarily due to the strong prior year performance of Wonkaand Aquaman 2.
Current wording
•The increase in theatrical product revenue was attributable to higher film rental revenue and intercompany content sales, partially offset by lower home entertainment revenue. The increase in film rental revenue was primarily due to the strong current year performance of A Minecraft Movie, Sinners, and Final Destination Bloodlines. The decrease in home entertainment revenue was primarily due to the strong prior year performance of Dune: Part Two, Wonka, and Aquaman and the Lost Kingdom.
Previous wording
•The decrease in games revenue was attributable to the prior year release of Suicide Squad: Kill the Justice League, which was released in the first quarter of 2024, and carryover from Hogwarts Legacy and Mortal Kombat 1, which were released in 2023, compared to no releases in the first quarter of 2025.
Current wording
•The decrease in games revenue was attributable to no releases in 2025 compared to the prior year release of Suicide Squad: Kill the Justice League in the first quarter of 2024.
Previous wording
Costs of revenues decreased 29% for the three months ended March 31, 2025, primarily attributable to a 41% decrease in theatrical product content expense and a 66% decrease in games content expense. The decrease in theatrical content expense was a result of lower film costs commensurate with lower theatrical product revenue and lower payments to partners and participants. The decrease in games content expense was primarily due to a $187 million impairment related to Suicide Squad: Kill the Justice League in the prior year, and lower games content expense commensurate with lower games revenue.
Current wording
During the six months ended June 30, 2025, television product content expense increased 40%, offset by a 60% decrease in games content expense and 13% decrease theatrical product content expense. The increase in television product content expense was due to higher costs commensurate with higher intercompany content licensing due to the timing of renewals. The decrease in games content expense was primarily due to a $213 million impairment related to Suicide Squad: Kill the Justice League in the prior year, and lower games content expense commensurate with lower games revenue. The decrease in theatrical content expense was primarily a result of lower film costs due to lower payments to partners.
Previous wording
The table below presents, for our Global Linear Networks segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (in millions).
Current wording
The table below presents, for our Global Linear Networks segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (loss) (in millions).
Previous wording
Distribution revenue decreased 8% for the three months ended March 31, 2025, primarily attributable to a 9% decline in domestic linear subscribers, partially offset by a 2% increase in domestic affiliate rates. Additionally, distribution revenues were negatively impacted by lower international affiliate rates and international subscriber declines. Declines in linear subscribers are expected to continue.
Current wording
Distribution revenue decreased 7% for the three and six months ended June 30, 2025, primarily attributable to a 9% decline in domestic linear subscribers, and to a lesser extent, lower international affiliate rates and international subscriber declines, partially offset by a 2% increase in domestic affiliate rates for both periods. Declines in linear subscribers are expected to continue.
Previous wording
Content revenue increased 44% for the three months ended March 31, 2025, primarily attributable to timing of third party licensing deals.
Current wording
Content revenue decreased 2% and increased 19% for the three and six months ended June 30, 2025, respectively, primarily attributable to timing of third-party licensing deals.
Previous wording
Costs of revenues decreased 2% for the three months ended March 31, 2025, primarily attributable to timing of content, production, and news related spend.
Current wording
Costs of revenues increased 2% and was flat for the three and six months ended June 30, 2025, respectively, primarily attributable to higher domestic sports costs. Costs of revenues for the six months ended June 30, 2025 benefited from timing of content, production, and news related spend.
Previous wording
Adjusted EBITDA improved 33% for the three months ended March 31, 2025, primarily attributable to the release of previously recorded non-income tax reserves, lower facility costs due to office consolidations and closures, and lower securitization expense.
Current wording
Adjusted EBITDA decreased 9% and increased 14% for the three and six months ended June 30, 2025, respectively. The decrease for the three months ended June 30, 2025 was primarily attributable to higher overhead costs and securitization expense. The increase for the six months ended June 30, 2025 was primarily attributable to lower facility costs due to office consolidations and closures and the release of previously recorded non-income tax reserves.
Previous wording
Historically, we have generated a significant amount of cash from operations. During the three months ended March 31, 2025, we funded our working capital needs primarily through cash flows from operations. As of March 31, 2025, we had $3.9 billion of cash and cash equivalents on hand. We are a well-known seasoned issuer and have the ability to conduct registered offerings of securities, including debt securities, common stock and preferred stock, on short notice, subject to market conditions. Access to sufficient capital from the public market is not assured. We have a $6.0 billion revolving credit facility and a commercial paper program described below. We also participate in a revolving receivables program and an accounts receivable factoring program described below.
Current wording
Historically, we have generated a significant amount of cash from operations. During the six months ended June 30, 2025, we funded our working capital needs primarily through cash flows from operations. As of June 30, 2025, we had $4.9 billion of cash and cash equivalents on hand. We are a well-known seasoned issuer and have the ability to conduct registered offerings of securities, including debt securities, common stock and preferred stock, on short notice, subject to market conditions. Access to sufficient capital from the public market is not assured. We have a $4.0 billion revolving credit facility and a commercial paper program described below. We also participate in a revolving receivables program and an accounts receivable factoring program described below.
Previous wording
DCL and certain subsidiaries of the Company, as borrowers, have a multicurrency revolving credit agreement (the “Credit Agreement”) and have the capacity to borrow up to $6.0 billion under the Credit Agreement (the “Credit Facility”). DCL may also request additional commitments up to $1.0 billion from the lenders upon the satisfaction of certain conditions. The Credit Agreement contains customary representations and warranties as well as affirmative and negative covenants. As of March 31, 2025, we were in compliance with all applicable covenants and there were no events of default under the Credit Agreement.
Current wording
DCL and certain subsidiaries of the Company, as borrowers, have a multicurrency revolving credit agreement (the “Credit Agreement”) and have the capacity to borrow up to $4.0 billion under the Credit Agreement (the “Credit Facility”). DCL may also request additional commitments up to $1.0 billion from the lenders upon the satisfaction of certain conditions. In June 2025, we amended the Credit Agreement to, among other things, decrease the borrowing capacity from $6.0 billion to $4.0 billion and provide for early termination of the Credit Agreement upon completion of the Separation. The Credit Agreement contains customary representations and warranties as well as affirmative and negative covenants. As of June 30, 2025, we were in compliance with all applicable covenants and there were no events of default under the Credit Agreement.
Previous wording
During the three months ended March 31, 2025, we and DCL borrowed and repaid $695 million under our Credit Facility and commercial paper program. As of March 31, 2025, we and DCL had no outstanding borrowings under the Credit Facility or issuances under the commercial paper program.
Current wording
During the six months ended June 30, 2025, we and DCL borrowed and repaid $3,551 million under our Credit Facility and commercial paper program. As of June 30, 2025, we and DCL had no outstanding borrowings under the Credit Facility or issuances under the commercial paper program.
Previous wording
During the three months ended March 31, 2025, we entered into a new $1,500 million 364-day senior unsecured term loan credit facility. The proceeds were used to fund the redemption of $1,500 million aggregate principal amount outstanding of WMH’s senior notes due 2026.
Current wording
During the six months ended June 30, 2025, we entered into and repaid a $1,500 million 364-day senior unsecured term loan credit facility. The proceeds were used to fund the redemption of $1,500 million aggregate principal amount outstanding of WMH’s senior notes due 2026.
Previous wording
We have a revolving agreement to transfer up to $5,200 million of certain receivables through our bankruptcy-remote subsidiary, Warner Bros. Discovery Receivables Funding, LLC, to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred. We service the sold receivables for the financial institution for a fee and pay fees to the financial institution in connection with this revolving agreement. As customers pay their balances, our available capacity under this revolving agreement increases and typically we transfer additional receivables into the program. In some cases, we may have collections that have not yet been remitted to the bank, resulting in a liability. The outstanding portfolio of receivables derecognized from our consolidated balance sheets was $4,748 million as of March 31, 2025.
Current wording
We have a revolving agreement to transfer up to $5,000 million of certain receivables through our bankruptcy-remote subsidiary, Warner Bros. Discovery Receivables Funding, LLC, to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred. We service the sold receivables for the financial institution for a fee and pay fees to the financial institution in connection with this revolving agreement. As customers pay their balances, our available capacity under this revolving agreement increases and typically we transfer additional receivables into the program. In some cases, we may have collections that have not yet been remitted to the bank, resulting in a liability. The outstanding portfolio of receivables derecognized from our consolidated balance sheets was $4,499 million as of June 30, 2025.
Previous wording
We have a factoring agreement to sell certain of our non-U.S. trade accounts receivable on a limited recourse basis to a third-party financial institution. Total trade accounts receivable sold under the Company’s factoring arrangement was $102 million for the three months ended March 31, 2025.
Current wording
We have a factoring agreement to sell certain of our non-U.S. trade accounts receivable on a limited recourse basis to a third-party financial institution. Total trade accounts receivable sold under the Company’s factoring arrangement was $102 million for the six months ended June 30, 2025.
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Previous report — wording carried elsewhere
We continue to closely monitor the ongoing impact of industry trends to our business; however, the full effects on our operations and results will depend on future developments, which are highly uncertain and cannot be predicted.
Previous report — wording carried elsewhere
Distribution revenue decreased 1% for the three months ended March 31, 2025, primarily attributable to a 9% decline in domestic linear subscribers, as well as lower international affiliate rates and international subscriber declines in the Global Linear Networks segment, partially offset by a 23% increase in Streaming subscribers and a 2% increase in domestic affiliate rates.
Previous report — wording carried elsewhere
Other revenue decreased 7% for the three months ended March 31, 2025.
Previous report — wording carried elsewhere
Adjusted EBITDA decreased 14% for the three months ended March 31, 2025.