An American flag flies at the Warner Bros. studio. in Burbank, California on September 12, 2025.
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Discovery of Warner Bros. On Wednesday, he reported a staggering first-quarter net loss, but he has an explanation.
The company reported a net loss of $2.9 billion, much larger than the $453 million net loss reported in the year-ago quarter.
That figure included $1.3 billion in “pre-tax amortization of acquisition-related intangible assets, increased fair value of content and restructuring expenses” as well as the $2.8 billion in termination fees that Warner Bros. Discovery had to Netflix after their pending transaction collapsed in February.
Netflix abandoned its plan to purchase WBD assets after Paramount Skydance came in with a higher offer. Paramount agreed to pay the termination fee as part of its agreement to purchase all of WBD, but the cost remains on WBD’s books until the deal closes.
Since the amount is repayable to Paramount under certain circumstances, such as if it terminated the agreement with Paramount for a higher bid, the obligation would transfer to WBD.
Paramount’s proposed acquisition received approval from WBD shareholders in April and is currently in the midst of a regulatory review process. On Monday, Paramount said in its earnings release that it had “made significant progress” toward closing the deal, which is expected to be finalized in the third quarter.
WBD also announced on Wednesday first quarter revenue down 1% year-on-year, to $8.89 billion. The company’s adjusted earnings before interest, depreciation and amortization taxes increased 5% to $2.2 billion. WBD had gross debt of $33.4 billion at the end of the quarter.
Streaming has remained a strong point for the company.
Total streaming revenue increased 9% to approximately $2.89 billion as subscriber revenue increased due to the expansion of HBO Max – WBD’s flagship streaming platform – into international markets. The unit’s advertising revenue increased 20% due to an increase in customers subscribing to the ad-supported tier.
The company said in a letter to shareholders that it surpassed its goal of more than 140 million global streaming customers at the end of the first quarter, and remained on track to surpass 150 million global subscribers by the end of the year.
WBD’s portfolio of pay TV networks, which includes CNN, TBS and Discovery Channel, continued to weigh on the company. Linear television networks reported revenue of $4.38 billion, down 8% from the previous year. The company said its linear advertising revenue was down 11%, primarily due to the absence of NBA media rights in its portfolio.
Revenues from the film studio division increased 35% to $3.13 billion year-on-year.