Warner Bros celebrates record quarter for subscriber adds

Warner Bros. Discovery Inc. reported a strong third-quarter performance on Thursday, celebrating a record quarter for subscriber growth at its streaming platform, Max, alongside a return to profitability.

Warner Bros celebrates record quarter for subscriber adds

The New York-based media giant posted net income of $135 million, a marked turnaround from a loss of $417 million during the same period last year. However, adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) fell 19% to $2.41 billion, down from $2.97 billion. Revenue also declined by 3.6%, reaching $9.62 billion compared to $9.98 billion in the previous year. Free cash flow dropped significantly to $632 million, from $2.06 billion in the same quarter last year. Warner Bros. reported a record 110.5 million global direct-to-consumer (DTC) subscribers at the end of the quarter, reflecting a quarter-on-quarter increase of 7.2 million. This marks the largest subscriber growth since the launch of Max, with growth seen across all regions. The company also saw an uptick in global DTC average revenue per user (ARPU), which rose 1% year-over-year to $7.84. DTC revenue grew 9% to $2.63 billion, and adjusted EBITDA for the segment surged to $289 million, up from $111 million. In other segments, Warner Bros. saw a 17% decline in Studios revenue, which fell to $2.68 billion, while adjusted EBITDA dropped 58% to $308 million. Networks revenue increased by 3% to $5.01 billion, though adjusted EBITDA for the division fell 11% to $2.12 billion.

"Extraordinary disruption"

The company indicated that it would provide a fourth-quarter outlook during its upcoming earnings call. Chief Executive David Zaslav acknowledged the "extraordinary disruption" faced during the quarter but emphasized that the company’s strategy for long-term success was yielding significant results.