Results
Warner Bros.
Discovery Reports Second-Quarter 2026 Results Three Months Ended June 30, 2026 2025 % Change $ in millions Reported Ex-FX(*) Distribution $ 4,950 $ 4,885 1 % 1 % Advertising 1,724 2,216 (22) % (22) % Content 1,828 2,471 (26) % (26) % Other 215 240 (10) % (11) % Total revenues $ 8,717 $ 9,812 (11) % (12) % Net income available to Warner Bros.
Discovery, Inc. 149 1,580 (91) % NM Adjusted EBITDA(*) 1,879 1,953 (4) % (6) % Cash provided by operating activities 848 983 (14) % Free cash flow(*) 572 702 (19) % NM - Not Meaningful (*) A non-GAAP financial measure; see the section starting on page 11 titled Definitions & Sources for additional details.
Q2 2026 Highlights • Total revenues were $8.7 billion, a 12% ex-FX(1) decrease from the prior year quarter. • Distribution revenues increased 1% ex-FX, as dynamic underlying growth in global streaming subscribers was partially offset by continued domestic linear pay TV subscriber declines and the impact of the HBO Max domestic distribution deal renewal with a former related party, previously disclosed in the second quarter of 2025. • Advertising revenues decreased 22% ex-FX, as ad-lite streaming subscriber growth was more than offset by the absence of the NBA along with continued domestic linear audience declines.
5The absence of the NBA in the current year negatively impacted the year-over-year growth rate by 20% ex-FX. • Content revenues decreased 26% ex-FX, primarily due to lower theatrical revenue at the Studios segment. • Net income available to Warner Bros.
3Discovery, Inc. was $0.1 billion, which includes $1.1 billion of pre-tax acquisition- related amortization of intangibles, content fair value step-up, and restructuring expenses. • Total Adjusted EBITDA(2)(*) was $1.9 billion, a 6% ex-FX decrease compared to the prior year quarter, as growth in the Streaming segment was more than offset by a decline in the Studios and Global Linear Networks segments. • Cash provided by operating activities was $848 million.
Free cash flow(3)(*) was $572 million.
2Free cash flow was unfavorably impacted by approximately $350 million of separation & transaction-related items compared to an approximate $250 million impact in the prior year quarter. • Ended the first quarter with $29.7 billion of net debt(4)(*) and 3.4x net leverage(5)(*). • During the second quarter, the Company repaid in full the $15 billion bridge loan facility with a $13 billion Term Loan B and a €1.7 billion Term Loan B. Q2 2026 Earnings Press ReleaseAugust 6, 2026 1
Streaming Segment Three Months Ended June 30, 2026 2025 % Change $ in millions Reported Ex-FX(*) Distribution $ 2,689 $ 2,410 12 % 11 % Advertising 306 282 9 % 8 % Subscriber-related revenues(*) 2,995 2,692 11 % 10 % Content 84 102 (18) % (13) % Other — (1) NM NM Total revenues 3,079 2,793 10 % 10 % Costs of revenues (excluding depreciation & amortization) 1,904 1,913 — % — % Selling, general and administrative 663 587 13 % 14 % Adjusted EBITDA $ 512 $ 293 75 % 63 % (*) A non-GAAP financial measure; see the section starting on page 11 titled Definitions & Sources for additional details.
Q2 2026 Highlights • Streaming revenues increased 10% ex-FX to $3,079 million compared to the prior year quarter.
Subscriber-related revenues(6)(*) increased 10% ex-FX compared to the prior year quarter. • Distribution revenue increased 11% ex-FX, as a result of the continued growth in existing markets and global expansion of HBO Max, including new distribution deals, partially offset by the domestic distribution deal renewal with a former related party, previously disclosed in the second quarter of 2025. • Advertising revenue increased 8% ex-FX, primarily driven by an increase in global ad-lite subscribers.
4The absence of the NBA in the current year negatively impacted the year-over-year growth rate by 16% ex-FX. • Streaming operating expenses increased 3% ex-FX to $2,567 million compared to the prior year quarter. • Costs of revenues were relatively flat compared to the prior year quarter, as higher international content costs to support HBO Max launches were offset by shifts in the overall mix of programming. • SG&A increased 14% ex-FX, primarily due to higher marketing costs tied to HBO Max international launches and higher overhead costs. • Streaming Adjusted EBITDA increased 63% ex-FX to $512 million compared to the prior year quarter.
Q2 2026 Earnings Press ReleaseAugust 6, 2026 2
Studios Segment Three Months Ended June 30, 2026 2025 % Change $ in millions Reported Ex-FX(*) Distribution $ 4 $ 1 NM NM Advertising — — NM NM Content 2,125 3,591 (41) % (41) % Other 199 209 (5) % (5) % Total revenues 2,328 3,801 (39) % (39) % Costs of revenues (excluding depreciation & amortization) 1,514 2,215 (32) % (32) % Selling, general and administrative 718 723 (1) % (1) % Adjusted EBITDA $ 96 $ 863 (89) % (89) % (*) A non-GAAP financial measure; see the section starting on page 11 titled Definitions & Sources for additional details.
1Q2 2026 Highlights • Studios revenues decreased 39% ex-FX to $2,328 million compared to the prior year quarter. • Content revenue decreased 41% ex-FX. • Theatrical revenue decreased 46% ex-FX, driven by lower box office revenue primarily due to this quarter’s slate in relation to the strong performance of A Minecraft Movie, Sinners, and Final Destination Bloodlines in the prior year quarter. • TV revenue decreased 45% ex-FX, primarily driven by lower intercompany content licensing due to the timing of renewals. • Games revenue increased 45% ex-FX, due to the release of LEGO Batman: Legacy of the Dark Knight in the current year quarter. • Studios operating expenses decreased 24% ex-FX to $2,232 million compared to the prior year quarter. • Costs of revenues decreased 32% ex-FX. • Theatrical content expense decreased 41% ex-FX due to lower theatrical revenues, partially offset by impairments in the current year quarter. • TV content expense decreased 35% ex-FX primarily driven by lower intercompany content licensing. • Games content expense increased 52% ex-FX, due to the release of LEGO Batman: Legacy of the Dark Knight in the current year quarter. • SG&A decreased 1% ex-FX, primarily driven by lower marketing costs. • Studios Adjusted EBITDA decreased by 89% ex-FX to $96 million compared to the prior year quarter.
Q2 2026 Earnings Press ReleaseAugust 6, 2026 3
Global Linear Networks Segment Three Months Ended June 30, 2026 2025 % Change $ in millions Reported Ex-FX(*) Distribution $ 2,265 $ 2,477 (9) % (9) % Advertising 1,429 1,953 (27) % (27) % Content 261 287 (9) % (12) % Other 36 86 (58) % (59) % Total revenues 3,991 4,803 (17) % (17) % Costs of revenues (excluding depreciation & amortization) 1,885 2,592 (27) % (27) % Selling, general and administrative 660 699 (6) % (6) % Adjusted EBITDA $ 1,446 $ 1,512 (4) % (5) % (*) A non-GAAP financial measure; see the section starting on page 11 titled Definitions & Sources for additional details.
Q2 2026 Highlights • Global Linear Networks revenues decreased 17% ex-FX to $3,991 million compared to the prior year quarter. • Distribution revenue decreased 9% ex-FX, primarily driven by a 10% decrease in domestic linear pay TV subscribers, partially offset by a 1% increase in domestic affiliate rates. • Advertising revenue decreased 27% ex-FX, primarily driven by 17% domestic audience declines, largely due to the absence of the NBA in the current year quarter.
The absence of the NBA negatively impacted the year-over-year growth rate by 20% ex-FX.
7Additionally, the broadcast of the NCAA March Madness Final Four and Championship in the current year, along with the absence of the NHL Stanley Cup Finals, which was broadcast in the prior year, positively impacted the year-over-year growth rate by 4% ex-FX. • Content revenue decreased 12% ex-FX, primarily due to the timing of third party licensing deals. • Global Linear Networks operating expenses decreased 23% ex-FX to $2,545 million compared to the prior year quarter. • Costs of revenues decreased 27% ex-FX, primarily driven by the absence of the NBA in the current year quarter.
6The absence of the NBA favorably impacted the year-over-year growth rate by 30% ex-FX. • SG&A decreased 6% ex-FX, primarily driven by lower overhead costs, partially offset by higher marketing costs. • Global Linear Networks Adjusted EBITDA decreased 5% ex-FX to $1,446 million compared to the prior year quarter.
Q2 2026 Earnings Press ReleaseAugust 6, 2026 4
Corporate Three Months Ended June 30, 2026 2025 % Change $ in millions Reported Ex-FX(*) Adjusted EBITDA $ (298) $ (316) 6 % 6 % (*) A non-GAAP financial measure; see the section starting on page 11 titled Definitions & Sources for additional details. • Corporate Adjusted EBITDA improved by $18 million, primarily driven by lower overhead costs.
Inter-segment Eliminations Three Months Ended June 30, $ in millions 2026 2025 Total revenue eliminations $ (682) $ (1,586) Total expense eliminations (805) (1,187) Adjusted EBITDA $ 123 $ (399) Leverage and Liquidity • Ended Q2 with $3.4 billion of cash on hand, $33.1 billion of gross debt(7)(*), and 3.4x net leverage(5)(*). • During the second quarter, the Company repaid in full the $15 billion bridge loan facility with a $13 billion Term Loan B and a €1.7 billion Term Loan B. • As of June 30, 2026, the weighted average maturity of the Company's outstanding debt was 8.3 years with a weighted average cost of 5.2%. • As of June 30, 2026, the Company’s $4.0 billion revolving credit facility was undrawn.
Free Cash Flow Three Months Ended June 30, $ in millions 2026 2025 % Change Cash provided by operating activities $ 848 $ 983 (14) % Purchases of property and equipment (276) (281) (2) % Free cash flow(*) $ 572 $ 702 (19) % (*) A non-GAAP financial measure; see the section starting on page 11 titled Definitions & Sources for additional details. • Q2 2026 cash provided by operating activities decreased to $848 million from $983 million in the prior year quarter.
Free cash flow(3)(*) decreased to $572 million from $702 million, primarily driven by higher net content investment partially offset by lower tax payments and the timing of working capital.
8Free cash flow was unfavorably impacted by approximately $350 million of separation & transaction-related items compared to an approximate $250 million impact in the prior year quarter. • As of June 30, 2026, the Company had $3,900 million drawn on its revolving receivables program, a $50 million increase vs. Q1.
Q2 2026 Earnings Press ReleaseAugust 6, 2026 5
Warner Bros.
Discovery, Inc. Consolidated Statements of Operations Three Months Ended June 30, Unaudited; in millions, except per share amounts 2026 2025 Distribution $ 4,950 $ 4,885 Advertising 1,724 2,216 Content 1,828 2,471 Other 215 240 Total revenues 8,717 9,812 Costs of revenues, excluding depreciation and amortization 4,621 5,967 Selling, general and administrative 2,564 2,477 Depreciation and amortization 1,159 1,447 Restructuring and other charges 113 80 Impairments and loss on dispositions 23 26 Total costs and expenses 8,480 9,997 Operating income (loss) 237 (185) Interest expense, net (511) (463) (Loss) gain on extinguishment of debt, net (75) 2,958 Income from equity investees, net 28 5 Other income, net 50 139 (Loss) income before income taxes (271) 2,454 Income tax benefit (expense) 433 (866) Net income 162 1,588 Net income attributable to noncontrolling interests (13) (7) Net income attributable to redeemable noncontrolling interests — (1) Net income available to Warner Bros.
Discovery, Inc. $ 149 $ 1,580 Net income per share available to Warner Bros.
Discovery, Inc. Series A common stockholders: Basic $ 0.06 $ 0.64 Diluted $ 0.06 $ 0.63 Weighted average shares outstanding: Basic 2,511 2,477 Diluted 2,575 2,499 Q2 2026 Earnings Press ReleaseAugust 6, 2026 6
Warner Bros.
Discovery, Inc. Consolidated Balance Sheets Unaudited; in millions, except par value June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 3,369 $ 4,566 Receivables, net 4,952 5,294 Prepaid expenses and other current assets 4,218 3,346 Total current assets 12,539 13,206 Film and television content rights and games 19,245 19,114 Property and equipment, net 6,652 6,685 Goodwill 25,861 25,933 Intangible assets, net 25,922 27,764 Other noncurrent assets 7,029 7,383 Total assets $ 97,248 $ 100,085 Liabilities and equity Current liabilities: Accounts payable $ 1,060 $ 1,093 Accrued liabilities 12,076 9,626 Deferred revenues 1,514 1,642 Current portion of debt 1,493 139 Total current liabilities 16,143 12,500 Noncurrent portion of debt 30,530 32,428 Deferred income taxes 5,579 6,383 Other noncurrent liabilities 11,001 11,608 Total liabilities 63,253 62,919 Commitments and contingencies Redeemable noncontrolling interests — 19 Warner Bros.
Discovery, Inc. stockholders’ equity: Series A common stock: $0.01 par value; 10,800 and 10,800 shares authorized; 2,738 and 2,710 shares issued; and 2,508 and 2,480 shares outstanding 27 27 Preferred stock: $0.01 par value; 1,200 and 1,200 shares authorized, 0 shares issued and outstanding — — Additional paid-in capital 56,022 56,055 Treasury stock, at cost: 230 and 230 shares (8,244) (8,244) Accumulated deficit (14,279) (11,512) Accumulated other comprehensive loss (688) (407) Total Warner Bros.
Discovery, Inc. stockholders’ equity 32,838 35,919 Noncontrolling interests 1,157 1,228 Total equity 33,995 37,147 Total liabilities and equity $ 97,248 $ 100,085 Q2 2026 Earnings Press ReleaseAugust 6, 2026 7
Warner Bros.
Discovery, Inc. Consolidated Statements of Cash Flows Six Months Ended June 30, Unaudited; in millions 2026 2025 Operating Activities Net (loss) income $ (2,744) $ 1,139 Adjustments to reconcile net income to cash provided by operating activities: Content rights amortization and impairment 5,088 6,851 Depreciation and amortization 2,385 2,994 Deferred income taxes (812) (471) Loss (gain) on extinguishment of debt 102 (2,954) Share-based compensation expense 342 298 Impairments and loss on dispositions 37 116 Netflix Termination Fee accrual 2,800 — Other, net 42 (85) Changes in operating assets and liabilities, net of acquisitions and dispositions: Receivables, net 278 (460) Film and television content rights, games, and production payables, net (5,527) (6,314) Accounts payable, accrued liabilities, deferred revenues and other noncurrent liabilities (833) (141) Foreign currency, prepaid expenses and other assets, net (518) 563 Cash provided by operating activities 640 1,536 Investing Activities Purchases of property and equipment (544) (532) Proceeds from sales of investments 9 54 Investments in and advances to equity investees (25) (26) Proceeds from asset dispositions — 66 Other investing activities, net 61 7 Cash used in investing activities (499) (431) Financing Activities Principal repayments of debt, including premiums and discounts to par value (15,373) (20,403) Borrowings from debt, net of discount and issuance costs 14,781 18,303 Distributions to noncontrolling interests and redeemable noncontrolling interests (144) (174) Proceeds from the formation of music catalog joint venture — 601 Borrowings under commercial paper program and revolving credit facility 1,261 3,551 Repayments under commercial paper program and revolving credit facility (1,261) (3,551) Principal repayments of finance and other lease obligations (120) (101) Cash paid to settle share-based awards, net (451) (117) Other financing activities, net 34 5 Cash used in financing activities (1,273) (1,886) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (65) 256 Net change in cash, cash equivalents, and restricted cash (1,197) (525) Cash, cash equivalents, and restricted cash, beginning of period 4,570 5,416 Cash, cash equivalents, and restricted cash, end of period $ 3,373 $ 4,891 Q2 2026 Earnings Press ReleaseAugust 6, 2026 8
Reconciliation of Net (Loss) Income to Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization Three Months Ended June 30, Unaudited; in millions 2026 2025 Net income available to Warner Bros.
Discovery, Inc. $ 149 $ 1,580 Net income attributable to redeemable noncontrolling interests — 1 Net income attributable to noncontrolling interests 13 7 Income tax (benefit) expense (433) 866 (Loss) income before income taxes (271) 2,454 Other income, net (50) (139) Income from equity investees, net (28) (5) Loss (gain) on extinguishment of debt, net 75 (2,958) Interest expense, net 511 463 Operating Income (loss) 237 (185) Depreciation and amortization 1,159 1,447 Impairment and amortization of fair value step-up for content 77 388 Restructuring and other charges 113 80 Employee share-based compensation 187 173 Transaction and integration costs 72 17 Impairments and loss on dispositions 23 26 Amortization of capitalized interest for content 11 3 Facility consolidation costs — 4 Adjusted EBITDA(*) $ 1,879 $ 1,953 (*) A non-GAAP financial measure; see the section starting on page 13 titled Definitions & Sources for additional details Q2 2026 Earnings Press ReleaseAugust 6, 2026 9
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