Warner Bros. Discovery posts $9 billion revenue in Q1

Warner Bros. Discovery reported total revenues of $8.9 billion for the quarter ending March 31, 2026, marking a 3% decline on an ex-foreign exchange basis, as weakness in advertising and continued linear TV subscriber erosion weighed on performance.

The media conglomerate said distribution revenues remained broadly flat year-on-year, with growth in global streaming subscribers offset by continued declines in domestic linear pay TV subscribers. The company also cited the impact of the HBO Max domestic distribution deal renewal with a former related party, which had previously been disclosed in the second quarter of 2025.

Advertising revenues fell 8% on an ex-FX basis during the quarter. The decline was driven by the absence of the NBA and continued audience erosion across domestic linear television networks, despite growth in ad-lite streaming subscribers. According to the company, the loss of NBA programming alone negatively impacted year-on-year advertising growth by 7% on an ex-FX basis.

Content revenues were largely unchanged from the prior-year period, as higher intercompany content revenues within the Studios segment were offset by increased intercompany eliminations.

The company reported a net loss attributable to Warner Bros. Discovery of $2.9 billion for the quarter. The loss included $1.3 billion in pre-tax acquisition-related amortisation of intangibles, content fair value step-up, and restructuring expenses. The result also reflected a $2.8 billion termination fee paid to Netflix.

Warner Bros. Discovery said PSKY paid the termination fee on its behalf under the merger agreement terms. The amount could be refundable to PSKY under certain circumstances, including if Warner Bros. Discovery terminates the merger agreement for a superior proposal or violates interim operating covenants, creating a repayment obligation.

Adjusted EBITDA stood at $2.2 billion for the quarter and remained relatively unchanged on an ex-FX basis compared to the prior-year quarter. Gains in the Streaming and Studios divisions were offset by declines in the Global Linear Networks segment.

The company generated negative operating cash flow of $208 million during the quarter, while free cash flow came in at negative $476 million. Warner Bros. Discovery said free cash flow was adversely impacted by approximately $100 million in separation and transaction-related costs.

The company ended the quarter with net debt of $30.1 billion.