10-QPeriod: Q1 FY2026

Warner Bros. Discovery, Inc. Quarterly Report for Q1 Ended Mar 31, 2026

Filed May 6, 2026For Securities:WBD

Summary

Warner Bros. Discovery (WBD) reported a significant net loss of $2.916 billion for the first quarter of 2026, a substantial increase from the $453 million net loss in the prior year period. This widening loss is primarily attributed to a one-time $2.8 billion Netflix termination fee incurred due to the termination of the Netflix merger agreement and the subsequent entry into the PSKY merger agreement. Excluding this significant item, the operational performance shows some nuances, with total revenues slightly decreasing by 1% year-over-year (or 3% excluding foreign exchange impacts), driven by declines in advertising and distribution revenues, partially offset by growth in content and other revenue streams. Despite the substantial net loss, the company is navigating a significant transition with the pending acquisition by Paramount Skydance Corporation (PSKY). This event dominates the strategic narrative, with WBD stockholders approving the PSKY merger in April 2026. The company also continues to focus on its three core segments: Streaming, Studios, and Global Linear Networks. While Global Linear Networks saw a decline in Adjusted EBITDA, both Streaming and Studios segments demonstrated growth in Adjusted EBITDA, indicating underlying operational improvements in these areas. The company maintains a substantial cash balance and liquidity, though it faces ongoing industry headwinds such as declining linear subscribers and advertising market softness.

Financial Highlights

46 data points
Beta

Revenue

$8.89B

Net Income

-$2.92B

-32.8% Net Margin

EPS (Diluted)

$-1.17

Total Assets

$97.84B

Cash & Equivalents

$3.26B

Free Cash Flow

-$476.00M

Financial Statements
Beta
Revenue$8.89B
SG&A Expenses$2.48B
Operating Expenses$11.36B
Operating Income-$2.47B
Net Income-$2.92B
EPS (Basic)$-1.17
EPS (Diluted)$-1.17
Shares Outstanding (Basic)2.49B
Shares Outstanding (Diluted)2.49B

Key Highlights

  • 1Significant net loss of $2.916 billion in Q1 2026, primarily due to a $2.8 billion Netflix termination fee.
  • 2Total revenues decreased 1% to $8.893 billion in Q1 2026, with advertising and distribution revenues showing notable declines.
  • 3The company has entered into a definitive agreement for its acquisition by Paramount Skydance Corporation (PSKY), with stockholder approval obtained in April 2026.
  • 4Adjusted EBITDA for the Streaming segment increased 29% to $438 million, and for the Studios segment increased significantly to $775 million, indicating operational strengths.
  • 5Global Linear Networks segment's Adjusted EBITDA decreased 9% to $1.634 billion, reflecting ongoing industry pressures.
  • 6Cash and cash equivalents stood at $3.264 billion as of March 31, 2026, and the company maintained access to its $4 billion revolving credit facility.
  • 7The company is actively managing its debt, with some senior notes maturing in the near term.

Frequently Asked Questions

The substantial net loss of $2.916 billion for the three months ended March 31, 2026, is primarily due to a one-time Netflix termination fee of $2.8 billion. This fee was incurred as a result of terminating the Netflix merger agreement and subsequently entering into the PSKY merger agreement.

Warner Bros. Discovery entered into a merger agreement with PSKY on February 27, 2026. WBD stockholders approved the adoption of the PSKY Merger Agreement on April 23, 2026. The transaction is subject to customary closing conditions, including regulatory approvals. There is no assurance the merger will be completed as planned.

The Global Linear Networks segment's Adjusted EBITDA declined by 9% due to ongoing subscriber and advertising revenue pressures. However, the Streaming segment saw a 29% increase in Adjusted EBITDA, driven by subscriber growth and expansion, and the Studios segment's Adjusted EBITDA grew significantly, indicating strong performance in content production and licensing.

As of March 31, 2026, Warner Bros. Discovery had $3.264 billion in cash and cash equivalents. The company also has access to a $4 billion revolving credit facility and a commercial paper program, indicating a solid liquidity position to manage its operations and ongoing strategic initiatives.