WBD Q2 revenue falls 11% as advertising and studio businesses weigh on earnings

Warner Bros. Discovery (WBD) reported revenue of $8.72 billion for the second quarter of 2026, down 11% from $9.81 billion in the corresponding quarter last year, as declines across advertising, content and its Studios business weighed on the media and entertainment company.

On a constant-currency basis, revenue declined 12% year-on-year. Advertising revenue fell 22% to $1.72 billion, while content revenue declined 26% to $1.83 billion. Distribution revenue, however, increased 1% to $4.95 billion.

WBD said the advertising decline reflected continued domestic linear audience pressure and the absence of the NBA, which negatively impacted the year-on-year advertising growth rate by 20% ex-FX. Growth in ad-supported streaming subscribers provided a partial offset. Content revenue, meanwhile, was affected primarily by lower theatrical revenue at the Studios business.

Net income available to WBD stood at $149 million, sharply lower than $1.58 billion in Q2 2025. The previous year's result included a substantial gain from the extinguishment of debt. Diluted earnings per share stood at $0.06, compared with $0.63 a year earlier. WBD nevertheless swung to operating income of $237 million from an operating loss of $185 million in the year-ago quarter.

Adjusted EBITDA declined 4% to $1.88 billion, or 6% ex-FX, as growth in streaming was more than offset by declines at Studios and Global Linear Networks.

Streaming remained a bright spot for the company. Segment revenue increased 10% ex-FX to $3.08 billion, while subscriber-related revenue also grew 10%. Streaming advertising revenue increased 8% ex-FX, driven primarily by growth in global ad-lite subscribers.

Streaming adjusted EBITDA surged 63% ex-FX to $512 million, compared with $293 million in Q2 2025. Distribution revenue grew 11% ex-FX, supported by HBO Max's expansion in existing and international markets and new distribution agreements.

The Studios business faced a significantly tougher quarter. Revenue declined 39% ex-FX to $2.33 billion, while adjusted EBITDA plunged 89% to $96 million. Theatrical revenue fell 46%, reflecting a weaker slate compared with the strong performance of A Minecraft Movie, Sinners and Final Destination Bloodlines in the year-ago period. Games revenue, however, increased 45%, driven by the release of LEGO Batman: Legacy of the Dark Knight.

WBD's Global Linear Networks revenue declined 17% to $3.99 billion, with advertising revenue falling 27% amid domestic audience declines and the absence of the NBA. Distribution revenue declined 9%, driven primarily by a 10% decrease in domestic linear pay-TV subscribers. Adjusted EBITDA for the segment fell 5% ex-FX to $1.45 billion.

Cash provided by operating activities declined 14% to $848 million, while free cash flow fell 19% to $572 million. WBD ended the quarter with $3.4 billion in cash, $33.1 billion in gross debt and net leverage of 3.4x. During the quarter, the company also repaid its $15 billion bridge loan facility through new term loans.