Warner Bros. Discovery, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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, 2026 · Filed Aug 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001437107-26-000057
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001437107-26-000075
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 199 previous paragraphs and 208 current paragraphs.
130 unchanged; 50 reworded; 27 added; 18 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 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 (27)
Current report
On April 23, 2026, WBD stockholders approved the adoption of the PSKY Merger Agreement. In July 2026, two lawsuits were filed in the United States District Court for the Northern District of California by a coalition of twelve state attorneys general and the Writers Guild of America West and Writers Guild of America East seeking to block the PSKY Merger, alleging the transaction would violate Section 7 of the Clayton Act by reducing competition in key markets. On July 24, 2026, defendants agreed not to complete the PSKY Merger until the earlier of (i) five days after the merits determination in these matters or (ii) June 1, 2027. (See Note 15 to the accompanying consolidated financial statements.) The outcome of such litigation is uncertain and could prevent the completion of the PSKY Merger.
Current report
Advertising revenue decreased 22% and 16% for the three and six months ended June 30, 2026, respectively, primarily attributable to audience declines in domestic networks of 17% and 13%, respectively, which were impacted by the absence of the NBA in 2026, partially offset by the broadcast of the NCAA Final Four and championship game in the current year quarter and an increase in global ad-lite streaming subscribers.
Current report
Content revenue decreased 26% and 16% for the three and six months ended June 30, 2026, respectively, primarily attributable to a 46% and 21% decrease in theatrical product revenue as a result of lower film rental revenue due to the current year slate in relation to the strong performance of A Minecraft Movie, Sinners, and Final Destination Bloodlines, which were released in the second quarter of 2025. Additionally, content revenue for both periods was negatively impacted by the timing of third-party licensing deals at Global Linear Networks, partially offset by higher Studios third-party television content sales.
Current report
Other revenue decreased 11% and 6% for the three and six months ended June 30, 2026, respectively, primarily attributable to the absence of the NBA in 2026.
Current report
Selling, general and administrative expenses increased 3% and 7% for the three and six months ended June 30, 2026, respectively, primarily attributable to higher transaction and integration costs and higher marketing expenses.
Current report
Income From Equity Investees, net
Current report
Other Income, net
Current report
Other income, net was $50 million and $12 million for the three and six months ended June 30, 2026, respectively. (See Note 13 to the accompanying consolidated financial statements.)
Current report
Adjusted EBITDA increased 63% and 38% for the three and six months ended June 30, 2026, respectively.
Current report
Content revenue decreased 41% for the three months ended June 30, 2026, primarily attributable to a 46% decrease in theatrical product revenue, and a 45% decrease in television product revenue, partially offset by a 45% increase in games revenue.
Current report
•The decrease in theatrical product revenue was primarily driven by lower film rental revenue due to the current quarter slate in relation 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 television product revenue was primarily attributable to lower intercompany content licensing, primarily due to the timing of renewals.
Current report
•The increase in games revenue was primarily attributable to the release of LEGO Batman: Legacy of the Dark Knight in the current quarter.
Current report
Content revenue decreased 13% for the six months ended June 30, 2026, primarily attributable to a 21% decrease in theatrical product revenue and a 7% decrease in television product revenue, partially offset by a 9% increase in games revenue.
Current report
•The decrease in television product revenue was primarily attributable to lower intercompany content licensing, primarily due to the timing of renewals, partially offset by third-party content sales.
Current report
•The increase in games revenue was primarily attributable to the release of LEGO Batman: Legacy of the Dark Night in the current quarter, partially offset by the prior year catalog.
Current report
Costs of revenues decreased 12% for the six months ended June 30, 2026, primarily attributable to a 23% decrease in theatrical product content expense, an 8% decrease in television product content expense, and a 3% decrease in games content expense.
Current report
•The decrease in theatrical content expense was primarily due to lower film costs commensurate with lower theatrical product revenue, partially offset by impairments in the current year.
Current report
•Games content expense was relatively flat.
Current report
Adjusted EBITDA decreased 89% and 26% for the three and six months ended June 30, 2026, respectively.
Current report
Content revenue decreased 12% and 10% for the three and six months ended June 30, 2026, respectively, primarily attributable to the timing of third-party licensing deals.
Current report
Other revenue decreased 59% and 25% for the three and six months ended June 30, 2026, respectively, primarily attributable to the absence of the NBA in 2026.
Current report
Selling, general and administrative expenses decreased 6% and 3% for the three and six months ended June 30, 2026, respectively, primarily attributable to lower overhead costs, partially offset by higher marketing expenses.
Current report
Adjusted EBITDA decreased 5% and 8% for the three months ended June 30, 2026, respectively.
Current report
First Lien Credit Facility
Current report
Initial Term Loans and Bridge Loan Agreement
Current report
During the three months ended June 30, 2026, we used net proceeds from the Initial Term Loans, together with cash on the balance sheet, to repay in full $15,000 million of outstanding loans under the Bridge Loan Agreement. Additionally, we repaid $250 million of aggregate principal amount outstanding of the Initial Term Loans.
Removed paragraphs (18)
Previous report
Content revenue decreased 2% for the three months ended March 31, 2026, primarily attributable to the timing of third-party licensing deals at Global Linear Networks, a decrease in television product revenue due to lower initial telecast, and lower games library revenue at our Studios segment, partially offset by higher Studios third-party television licensing.
Previous report
Other revenue decreased 1% for the three months ended March 31, 2026.
Previous report
Selling, general and administrative expenses increased 11% for the three months ended March 31, 2026, primarily attributable to higher marketing and transaction and integration costs.
Previous report
Loss From Equity Investees, net
Previous report
Other (Expense) Income, net
Previous report
Other (expense) income, net was $(38) million for the three months ended March 31, 2026. (See Note 13 to the accompanying consolidated financial statements.)
Previous report
Content revenue decreased 27% for the three months ended March 31, 2026, primarily attributable to the timing of third-party licensing deals.
Previous report
Adjusted EBITDA increased 17% for the three months ended March 31, 2026.
Previous report
Content revenue increased 33% for the three months ended March 31, 2026, primarily attributable to a 58% increase in television product revenue and a 21% increase in theatrical product revenue, partially offset by a 30% decrease in games revenue.
Previous report
•The increase in theatrical product revenue was primarily due to higher intercompany content licensing driven by the launch of HBO Max in international markets.
Previous report
•The decrease in games revenue was primarily attributable to lower library revenues.
Previous report
Selling, general and administrative expenses increased 3% for the three months ended March 31, 2026, primarily attributable to higher marketing expenses and overhead costs.
Previous report
Adjusted EBITDA increased $516 million for the three months ended March 31, 2026.
Previous report
Content revenue decreased 9% for the three months ended March 31, 2026, primarily attributable to the timing of third-party licensing deals.
Previous report
Adjusted EBITDA decreased 10% for the three months ended March 31, 2026.
Previous report
Bridge Loan Facility
Previous report
Bridge Loan Facility
Previous report
The Bridge Loan Facility was amended in February 2026 to, among other things, extend the maturity to the earlier of (x) June 30, 2027 and (y) the date that the previously proposed Separation Transaction occurs. The Bridge Loan Facility is expected to be refinanced or repaid prior to its maturity.
Reworded paragraphs (50)
Previous wording
Following the board of directors’ determination that it had received a “Company Superior Proposal,” as defined in the Netflix Merger Agreement, from Paramount Skydance Corporation (“PSKY”) and Netflix’s waiver of its right to propose revisions to the Netflix Merger Agreement, on February 27, 2026, in accordance with the terms of the Netflix Merger Agreement, the Company terminated the Netflix Merger Agreement in connection with entering into the PSKY Merger Agreement (as defined below). As a result of the termination of the Netflix Merger Agreement, PSKY, on behalf of the Company, paid Netflix a termination fee of $2.8 billion in cash (the “Netflix Termination Fee”) as required by the terms of the Netflix Merger Agreement. During the three months ended March 31, 2026, the Company recorded an expense for the Netflix Termination Fee in the consolidated statements of operations. The amount paid by PSKY is reimbursable by the Company to PSKY in certain circumstances in the event the PSKY Merger Agreement is terminated, and therefore has been recorded in accrued liabilities in the consolidated balance sheets.
Current wording
Following the board of directors’ determination that it had received a “Company Superior Proposal,” as defined in the Netflix Merger Agreement, from Paramount Skydance Corporation (“PSKY”) and Netflix’s waiver of its right to propose revisions to the Netflix Merger Agreement, on February 27, 2026, in accordance with the terms of the Netflix Merger Agreement, the Company terminated the Netflix Merger Agreement in connection with entering into the PSKY Merger Agreement (as defined below). As a result of the termination of the Netflix Merger Agreement, PSKY, on behalf of the Company, paid Netflix a termination fee of $2.8 billion in cash (the “Netflix Termination Fee”) as required by the terms of the Netflix Merger Agreement. In the first quarter of 2026, the Company recorded an expense for the Netflix Termination Fee in the consolidated statements of operations. The amount paid by PSKY is reimbursable by the Company to PSKY in certain circumstances in the event the PSKY Merger Agreement is terminated and has been recorded in accrued liabilities in the consolidated balance sheets.
Previous wording
On April 23, 2026, WBD stockholders approved the adoption of the PSKY Merger Agreement. The completion of the PSKY Merger is subject to customary closing conditions, including regulatory clearances. In addition, PSKY’s obligation to consummate the PSKY Merger is subject to WBD not having completed the separation of its Streaming & Studios business from its Global Linear Networks business nor having declared or made any dividend to WBD’s stockholders to effectuate the separation. There can be no assurance that the PSKY Merger will occur in accordance with the expected plans or anticipated timeline, or at all.
Current wording
The completion of the PSKY Merger is subject to customary closing conditions, including regulatory clearances. In addition, PSKY’s obligation to consummate the PSKY Merger is subject to WBD not having completed the separation of its Streaming & Studios business from its Global Linear Networks business nor having declared or made any dividend to WBD’s stockholders to effectuate the separation. There can be no assurance that the PSKY Merger will occur in accordance with the expected plans or anticipated timeline, or at all.
Previous wording
The PSKY Merger Agreement contains certain customary termination rights for WBD and PSKY, including, without limitation, a right for either party to terminate if the PSKY Merger is not completed on or before March 4, 2027, subject to an extension to June 4, 2027 in certain circumstances as specified in the PSKY Merger Agreement. Termination under specified circumstances will require WBD to pay PSKY a termination fee of $3.0 billion and reimburse PSKY for (i) any payment made by PSKY, which will in no event be more than $1,528 million, in connection with WBD’s obligation to complete the Junior Lien Exchange Offer by December 30, 2026 and (ii) the Netflix Termination Fee, or PSKY to pay WBD a termination fee of $7.0 billion. Additionally, the PSKY Merger Agreement provides for customary pre-closing covenants of WBD, including covenants relating to conducting its business in the ordinary course consistent with past practice and to refrain from taking certain actions without PSKY’s consent.
Current wording
The PSKY Merger Agreement contains certain customary termination rights for WBD and PSKY, including, without limitation, a right for either party to terminate if the PSKY Merger is not completed on or before March 4, 2027, subject to an extension to June 4, 2027 in certain circumstances as specified in the PSKY Merger Agreement. Termination under specified circumstances will require WBD to pay PSKY a termination fee of $3.0 billion and reimburse PSKY for (i) any payment made by PSKY, which will in no event be more than $1,528 million, in connection with WBD’s obligation to complete the Junior Lien Exchange Offer (as defined below) by March 4, 2027 and (ii) the Netflix Termination Fee, or PSKY to pay WBD a termination fee of $7.0 billion. Additionally, the PSKY Merger Agreement provides for customary pre-closing covenants of WBD, including covenants relating to conducting its business in the ordinary course consistent with past practice and to refrain from taking certain actions without PSKY’s consent.
Previous wording
Distribution revenue decreased 1% for the three months ended March 31, 2026, primarily attributable to a 10% decline in domestic linear subscribers and the impact of the previously disclosed domestic wholesale streaming deal renewal, partially offset by continued growth in existing streaming markets and the global expansion of HBO Max, including new distribution deals.
Current wording
Distribution revenue increased 1% and remained flat for the three and six months ended June 30, 2026, respectively, primarily attributable to continued growth in existing streaming markets and the global expansion of HBO Max, including new distribution deals, partially offset by a 10% decline in domestic linear subscribers for both periods and the impact of the previously disclosed domestic wholesale streaming deal renewal that occurred in the second quarter of 2025.
Previous wording
Costs of revenues decreased 10% for the three months ended March 31, 2026, primarily attributable to lower domestic sports costs due to the absence of the NBA in 2026, which had a favorable impact to costs of revenues of $358 million, and lower content expense related to the amortization of purchase accounting fair value step-up for content.
Current wording
Costs of revenues decreased 23% and 17% for the three and six months ended June 30, 2026, respectively, primarily attributable to lower domestic sports costs due to the absence of the NBA in 2026, lower Studios theatrical content expense commensurate with lower theatrical product revenue, and lower content expense related to the amortization of purchase accounting fair value step-up for content, partially offset by higher international content costs to support HBO Max launches.
Previous wording
During the three months ended March 31, 2026, the Company recorded a $2.8 billion expense for the Netflix Termination Fee. (See Note 1 to the accompanying consolidated financial statements.)
Current wording
During the six months ended June 30, 2026, the Company recorded a $2.8 billion expense for the Netflix Termination Fee. (See Note 1 to the accompanying consolidated financial statements.)
Previous wording
Depreciation and amortization decreased 21% for the three months ended March 31, 2026, primarily attributable to intangible assets acquired in connection with the acquisition of 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.
Current wording
Depreciation and amortization decreased 20% and 20% for the three and six months ended June 30, 2026, respectively, primarily attributable to intangible assets acquired in connection with the acquisition of 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.
Previous wording
Restructuring and other charges were $204 million for the three months ended March 31, 2026. Restructuring and other charges primarily includes organization restructuring costs, employee retention, and consulting fees related to the previously announced Separation Transaction and the PSKY Merger. (See Note 3 to the accompanying consolidated financial statements.)
Current wording
Restructuring and other charges were $113 million and $317 million for the three and six months ended June 30, 2026, respectively. Restructuring and other charges primarily includes organization restructuring costs, employee retention, and consulting fees related to the previously announced Separation Transaction and the PSKY Merger. (See Note 3 to the accompanying consolidated financial statements.)
Previous wording
Impairments and loss on dispositions were $14 million for the three months ended March 31, 2026.
Current wording
Impairments and loss on dispositions were $23 million and $37 million for the three and six months ended June 30, 2026, respectively.
Previous wording
Interest expense, net increased $113 million for the three months ended March 31, 2026. The increase for the three months ended March 31, 2026 was primarily attributable to higher interest costs associated with the Bridge Loan Facility. (See Note 8 to the accompanying consolidated financial statements.)
Current wording
Interest expense, net increased $48 million and $161 million for the three and six months ended June 30, 2026, respectively, primarily attributable to higher interest costs associated with the Bridge Loan Agreement, which was repaid in full in June 2026. (See Note 8 to the accompanying consolidated financial statements.)
Previous wording
Loss on extinguishment of debt, net
Current wording
Loss (Gain) on Extinguishment of Debt, net
Previous wording
Loss on extinguishment of debt, net was $27 million for the three months ended March 31, 2026.
Current wording
Loss (gain) on extinguishment of debt, net was $75 million and $102 million for the three and six months ended June 30, 2026, respectively. (See Note 8 to the accompanying consolidated financial statements.)
Previous wording
Loss from our equity method investees was $5 million for the three months ended March 31, 2026. 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 from our equity method investees was $28 million and $23 million for the three and six months ended June 30, 2026, 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 benefit (expense) was $214 million and $(15) million for the three months ended March 31, 2026 and 2025, respectively. The increase in income tax benefit for the three months ended March 31, 2026 compared to the same period in 2025 was primarily attributable to excess tax benefits from share-based compensation.
Current wording
Income tax benefit (expense) was $433 million and $(866) million for the three months ended June 30, 2026 and 2025, respectively, and $647 million and $(881) million for the six months ended June 30, 2026 and 2025, respectively. The increase in income tax benefit for the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily attributable to lower pre-tax book income, including the absence of a $3.0 billion gain recognized in 2025 associated with the Tender Offers (see Note 8 to the accompanying consolidated financial statements), as well as excess tax benefits from share-based compensation.
Previous wording
Income tax benefit for the three months ended March 31, 2026, reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to a book tax difference in the Netflix Termination Fee accrual (See Note 1) based on current assessments, as well as excess tax benefits from share-based compensation.
Current wording
Income tax benefit for the three and six months ended June 30, 2026, reflects an effective income tax rate that differs from the federal statutory tax rate primarily due to the effect of foreign operations, excess tax benefits from share-based compensation, and changes in unrecognized tax benefits. Income tax benefit for the six months ended June 30, 2026 also reflects a book tax difference in the Netflix Termination Fee accrual based on current assessments. (See Note 1 to the accompanying consolidated financial statements.)
Previous wording
Distribution revenue increased 7% for the three months ended March 31, 2026, primarily attributable to continued growth in existing markets and the global expansion of HBO Max, including new distribution deals, partially offset by the impact of the previously disclosed domestic wholesale deal renewal that occurred in the second quarter of 2025.
Current wording
Distribution revenue increased 11% and 9% for the three and six months ended June 30, 2026, respectively, primarily attributable to continued growth in existing markets and the global expansion of HBO Max, including new distribution deals, partially offset by the impact of the previously disclosed domestic wholesale deal renewal that occurred in the second quarter of 2025.
Previous wording
Advertising revenue decreased 8% for the three months ended March 31, 2026, primarily attributable to the absence of the NBA in 2026, which had a negative impact of $133 million to advertising revenue, and audience declines in domestic networks of 8%, partially offset by an increase in global ad-lite subscribers.
Current wording
Advertising revenue increased 8% and 13% for the three and six months ended June 30, 2026, respectively, primarily attributable to an increase in global ad-lite subscribers, partially offset by the absence of the NBA in 2026.
Previous wording
Costs of revenues increased 2% for the three months ended March 31, 2026, primarily attributable to higher international content costs to support HBO Max launches, partially offset by shifts in the overall mix of programming.
Current wording
Costs of revenues were relatively flat for the three and six months ended June 30, 2026, as higher international content costs to support HBO Max launches were offset by shifts in the overall mix of programming.
Previous wording
Selling, general and administrative expenses increased 17% for the three months ended March 31, 2026, primarily attributable to higher marketing expenses to support HBO Max launches.
Current wording
Selling, general and administrative expenses increased 14% and 16% for the three and six months ended June 30, 2026, respectively, primarily attributable to higher marketing expenses to support HBO Max launches and higher overhead costs.
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 (loss) income (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 2% of total revenues and operating expenses for this segment for the three months ended March 31, 2026. 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 3% of total revenues and operating expenses for this segment for the three and six months ended June 30, 2026, respectively. Intra-segment revenue and expense are eliminated at the Studios segment level.
Previous wording
•The increase in television product revenue was primarily attributable to higher intercompany content licensing related to HBO Max international launches and higher third-party licensing.
Current wording
•The decrease in theatrical product revenue was primarily driven by lower film rental revenue due to the current year slate in relation to the strong performance of A Minecraft Movie, Sinners, and Final Destination Bloodlines, which were released in the second quarter of 2025, partially offset by higher intercompany content licensing related to HBO Max international launches.
Previous wording
Costs of revenues increased 17% for the three months ended March 31, 2026, primarily attributable to a 32% increase in television product content expense and an 11% increase in theatrical product content expense, partially offset by a 43% decrease in games content expense.
Current wording
Costs of revenues decreased 32% for the three months ended June 30, 2026, primarily attributable to a 41% decrease in theatrical product content expense and a 35% decrease in television product content expense, partially offset by a 52% increase in games content expense.
Previous wording
•The increase in theatrical content expense was primarily due to higher film costs commensurate with higher theatrical product revenue and higher film impairments.
Current wording
•The decrease in theatrical content expense was primarily due to lower film costs commensurate with lower theatrical product revenue, partially offset by impairments in the current year.
Previous wording
•The increase in television product content expense was due to higher costs commensurate with higher revenues.
Current wording
•The decrease in television product content expense was due to lower costs commensurate with lower revenues.
Previous wording
•The decrease in games content expense was primarily due to lower games content expense commensurate with lower games revenue.
Current wording
•The increase in games content expense was primarily due to higher games content expense commensurate with higher games revenue.
Previous wording
Selling, general and administrative expenses decreased 1% for the three months ended March 31, 2026.
Current wording
Selling, general and administrative expenses decreased 1% and increased 1% for the three and six months ended June 30, 2026, respectively. The decrease for the three months ended June 30, 2026 was primarily attributable to lower marketing expenses, partially offset by higher overhead costs. The increase for the six months ended June 30, 2026 was primarily attributable to higher overhead costs, partially offset by lower marketing expenses.
Previous wording
Distribution revenue decreased 8% for the three months ended March 31, 2026, primarily attributable to a 10% decline in domestic linear subscribers, partially offset by a 2% increase in domestic affiliate rates. Declines in linear subscribers are expected to continue.
Current wording
Distribution revenue decreased 9% and 8% for the three and six months ended June 30, 2026, respectively, primarily attributable to a 10% decline in domestic linear subscribers for both periods, partially offset by 1% and 2% increases in domestic affiliate rates for the three and six months ended June 30, 2026, respectively. Declines in linear subscribers are expected to continue.
Previous wording
Advertising revenue decreased 12% for the three months ended March 31, 2026, primarily attributable to the absence of the NBA in 2026 and audience declines in domestic networks of 8%. The absence of the NBA had a negative impact to advertising revenue of $133 million.
Current wording
Advertising revenue decreased 27% and 20% for the three and six months ended June 30, 2026, respectively, primarily attributable to audience declines in domestic networks of 17% and 13%, respectively, which were impacted by the absence of the NBA in 2026 and had a negative impact to advertising revenue of $414 million and $547 million for the three and six months ended June 30, 2026, respectively. Additionally, advertising revenue benefited from the broadcast of the NCAA Final Four and championship game in the current year quarter.
Previous wording
Costs of revenues decreased 11% for the three months ended March 31, 2026, primarily attributable to lower domestic sports costs due to the absence of the NBA, which had a favorable impact to costs of revenues of $358 million.
Current wording
Costs of revenues decreased 27% and 20% for the three and six months ended June 30, 2026, respectively, primarily attributable to lower domestic sports costs due to the absence of the NBA in 2026, which had a favorable impact to costs of revenues of $760 million and $1,107 million for the three and six months ended June 30, 2026, respectively.
Previous wording
Adjusted EBITDA decreased 13% for the three months ended March 31, 2026, primarily attributable to the release of previously recorded non-income tax reserves in 2025.
Current wording
Adjusted EBITDA improved 6% and declined 2% for the three and six months ended June 30, 2026, respectively. The improvement for the three months ended June 30, 2026 was primarily attributable to lower corporate overhead expense. The decline for the six months ended June 30, 2026 was primarily attributable to the release of previously recorded non-income tax reserves in 2025, partially offset by lower corporate overhead expense.
Previous wording
The following table presents our inter-segment eliminations by revenue and expense, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating loss (in millions).
Current wording
The following table presents our inter-segment eliminations by revenue and expense, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (loss) (in millions).
Previous wording
Historically, we have generated a significant amount of cash from operations. During the three months ended March 31, 2026, we funded our working capital needs primarily through cash flows from operations. As of March 31, 2026, we had $3,264 million 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 $4,000 million 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, 2026, we funded our working capital needs primarily through cash flows from operations. As of June 30, 2026, we had $3,369 million 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 $4,000 million 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
We and DGH have a non-investment grade leveraged bridge loan facility (“Bridge Loan Facility”) with JPMorgan Chase Bank, N.A. The Bridge Loan Facility contains customary representations and warranties as well as affirmative and negative covenants. As of March 31, 2026, we were in compliance with all applicable covenants and there were no events of default under the Bridge Loan Facility.
Current wording
During the three months ended June 30, 2026, we and DGH entered into a First Lien Credit Agreement with JPMorgan Chase Bank, N.A and JPMorgan SE. The First Lien Credit Agreement provides for (i) 7-year $13,000 million U.S. dollar-denominated term loans and (ii) 7-year €1,717 million Euro-denominated term loans. The First Lien Credit Agreement contains customary representations and warranties as well as affirmative and negative covenants. As of June 30, 2026, we were in compliance with all applicable covenants and there were no events of default under the First Lien Credit Agreement.
Previous wording
During the three months ended March 31, 2026, we and DCL borrowed and repaid $261 million under our Credit Facility and commercial paper program. As of March 31, 2026, 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, 2026, we and DCL borrowed and repaid $1,261 million under our Credit Facility and commercial paper program. As of June 30, 2026, we and DCL had no outstanding borrowings under the Credit Facility or issuances under the commercial paper program.
Previous 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 $3,850 million as of March 31, 2026.
Current wording
We have a revolving agreement to transfer up to $4,000 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 $3,900 million as of June 30, 2026.
Previous wording
We have factoring agreements to sell certain of our non-U.S. trade accounts receivable on a limited recourse basis to a third-party financial institution. No amounts were sold under the Company’s factoring arrangement during the three months ended March 31, 2026.
Current wording
We have factoring agreements to sell certain of our non-U.S. trade accounts receivable on a limited recourse basis to a third-party financial institution. No amounts were sold under the Company’s factoring arrangement during the six months ended June 30, 2026.
Previous wording
During the three months ended March 31, 2026, we repurchased or repaid $123 million of aggregate principal amount outstanding of our senior notes. In addition, we have $1,496 million of senior notes coming due through March 2027.
Current wording
During the six months ended June 30, 2026, we repurchased or repaid $123 million of aggregate principal amount outstanding of our senior notes. In addition, we had $16 million of senior notes that were due in July 2026, and an additional $1,480 million of senior notes coming due through June 2027.
Previous wording
We effected capital expenditures of $268 million during the three months ended March 31, 2026, including amounts capitalized to support HBO Max. We expect to continue to incur significant costs to develop and market HBO Max.
Current wording
We effected capital expenditures of $544 million during the six months ended June 30, 2026, including amounts capitalized to support HBO Max. We expect to continue to incur significant costs to develop and market HBO Max.
Previous wording
Our uses of cash have included investments in equity method investments and equity investments without readily determinable fair value. (See Note 7 to the accompanying consolidated financial statements.) We also provide funding to our investees from time to time. During the three months ended March 31, 2026, we contributed $25 million for investments in and advances to our investees.
Current wording
Our uses of cash have included investments in equity method investments and equity investments without readily determinable fair value. (See Note 7 to the accompanying consolidated financial statements.) We also provide funding to our investees from time to time. During the six months ended June 30, 2026, we contributed $25 million for investments in and advances to our investees.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•The decrease in television product content expense was due to lower costs commensurate with lower revenues.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Advertising revenue increased 19% for the three months ended March 31, 2026, primarily attributable to an increase in global ad-lite subscribers.