Warner Bros. Discovery (NASDAQ: WBD) reported fourth-quarter results that fell short of Wall Street expectations, but its stock still jumped about 10% in midday trading Thursday. Investors shrugged off the weaker numbers, focusing instead on a robust streaming performance and an optimistic outlook for the Max platform.
The entertainment giant posted a net loss of $0.20 per share on revenue of $10.03 billion for the quarter. That missed analyst forecasts from Visible Alpha, which had pegged earnings at $0.02 per share and revenue at $10.22 billion. While the top-line numbers disappointed, the streaming division’s performance stole the show.
The streaming unit delivered an adjusted EBITDA of $409 million in the fourth quarter. That figure crushed the $289.1 million estimate from LSEG analysts. Revenue for the division grew 5%, driven by subscriber growth and expanded content offerings.
Warner Bros. Discovery added 6.4 million streaming subscribers in the fourth quarter, topping the 4.9 million analysts had expected. By the end of the period, the company boasted 116.9 million direct-to-consumer (DTC) subscribers.
Not every segment fared as well. The TV networks division, which includes channels like CNN, Discovery Channel, and Animal Planet, saw revenue slide by 5%. A steep 17% drop in advertising sales drove the decline, underscoring persistent challenges in the cable television market. In contrast, the studios business thrived, with revenue climbing 15%. The boost came from higher content licensing fees, a sign that the industry is moving past the disruptions of last year’s Hollywood strikes.
In its annual letter to shareholders, Warner Bros. Discovery (NASDAQ: WBD) outlined ambitious plans for its Max streaming service. The company aims to expand Max to additional countries and targets at least 150 million global subscribers by the end of 2026. Management emphasized a “clear path” to achieving this goal, projecting strong revenue and adjusted EBITDA growth in its DTC business.
The earnings report arrives as Warner Bros. Discovery shifts its corporate strategy. In December, the company revealed plans to split its operations into two separate segments. One will house its television networks, including CNN, TBS, and TNT, while the other will encompass its film studios and the Max streaming platform. The company expects to finalize this restructuring by the second quarter of this year.
