01—Abstract
Summary
Summary of the 10-Q filed August 6, 2026. Cited figures are marked; the original filing is the authoritative source.
Warner Bros.
Discovery (WBD) reported revenues of $8.7 billiona for the three months ended June 30, 2026, a decrease from $9.8 billion in the prior year period, primarily driven by declines in advertising and content revenues. The company reported a net income of $162 million, a significant decrease from $1.6 billion in the same period last year. This decline is largely attributable to a substantial $2.8 billion Netflix Termination Fee recorded in the current quarter and ongoing pressures in the advertising market.
The company's balance sheet shows total assets of $97.2 billionb, with total liabilities of $63.3 billion as of June 30, 2026. Cash and cash equivalents stood at $3.4 billion.
The company continues to navigate significant strategic events, including the ongoing process related to the proposed merger with PSKY, which faces regulatory scrutiny and potential delays. The outcome of this merger remains uncertain and could materially impact future operations and financial condition.
02—Key points
Key Highlights
- Total revenues for the three months ended June 30, 2026, were $8.7 billion, down from $9.8 billion in the prior year period.
- Net income available to WBD stockholders was $149 million ($0.06 per share) for the three months ended June 30, 2026, compared to $1.58 billion ($0.64 per share) in the prior year period.
- The company recorded a $2.8 billion Netflix Termination Fee expense in the six months ended June 30, 2026.
- Advertising revenue decreased by 22% and 16% for the three and six months ended June 30, 2026, respectively, reflecting audience declines and the absence of the NBA.
- The proposed acquisition by PSKY is facing legal challenges from state attorneys general and the Writers Guild of America, with a trial scheduled for March 2027, creating significant uncertainty around the deal's completion.
- Streaming segment Adjusted EBITDA increased by 75% year-over-year for the three months ended June 30, 2026, driven by subscriber growth and distribution deals.
- Global Linear Networks segment Adjusted EBITDA decreased by 4% for the three months ended June 30, 2026, primarily due to subscriber declines and advertising revenue pressures.
03—Questions
Frequently Asked Questions
What is the status of the proposed acquisition by PSKY?
The proposed acquisition by PSKY is currently facing legal challenges from state attorneys general and the Writers Guild of America, alleging antitrust concerns. A trial is scheduled for March 2027, and the completion of the merger is uncertain. The company has agreed not to complete the merger until at least five days after a merits determination in these matters or June 1, 2027.
What led to the significant decrease in net income for the quarter?
The significant decrease in net income was primarily due to a $2.8 billion Netflix Termination Fee recorded in the six months ended June 30, 2026, as well as ongoing pressures in the advertising market and a decline in content revenue.
How is the Streaming segment performing?
The Streaming segment showed strong performance, with Adjusted EBITDA increasing by 75% year-over-year for the three months ended June 30, 2026. This growth was driven by continued expansion of HBO Max, new distribution deals, and growth in ad-lite subscribers.
What is the outlook for the Global Linear Networks segment?
The Global Linear Networks segment continues to face challenges, with a 9% decrease in distribution revenue and a 27% decrease in advertising revenue for the three months ended June 30, 2026. These declines are attributed to a continued reduction in domestic linear subscribers and audience declines in domestic networks, partially offset by affiliate rate increases. Adjusted EBITDA for this segment decreased by 4%.
04—Continue