Warner Bros. Discovery, Inc. (WBD) Financial Report Analysis - Q3 2025

Key Insights at a Glance

• Total Revenue: $29.294 billion for the nine months ended September 30, 2025 (up from $27.836 billion in 2024)
• Total Adjusted EBITDA: $977 million for the nine months ended September 30, 2025 (down from $1.817 billion in 2024)
• Net Income: $(11.032 billion) for the nine months ended September 30, 2025, a significant decline from a loss of $(178 million) in 2024
• Cash and Cash Equivalents: $4.294 billion as of September 30, 2025 (down from $5.312 billion at year-end 2024)
• Recommendation: Hold - While revenues show growth, significant losses and a decline in adjusted EBITDA warrant caution.

Detailed Financial Analysis

Revenue Performance

Warner Bros. Discovery reported a total revenue of $29.294 billion for the nine-month period ending September 30, 2025, reflecting an increase from $27.836 billion in the same period of 2024. This growth can be attributed primarily to the strength in the Streaming and Studios segments.

• Streaming Segment Revenue: Increased to $8.082 billion from $7.662 billion in 2024.
• Studios Segment Revenue: Decreased slightly to $9.436 billion from $7.950 billion in 2024, indicating fluctuations in film and television production revenues.
• Global Linear Networks Revenue: Reported at $15.407 billion, a drop from $13.460 billion in the previous year, which may reflect the ongoing shift in consumer preferences from traditional cable to streaming platforms.

Profitability Metrics

Despite the revenue growth, the company faced a substantial net loss of $(11.032 billion) for the nine months ended September 30, 2025, compared to a loss of $(178 million) the previous year. This drastic increase in losses can be attributed to several factors:

• Content Costs: Content expenses increased significantly, reflecting the high costs associated with production and licensing as the company invests heavily to compete in the streaming space.
• Interest Expense: Net interest expenses ballooned to $1.527 billion, up from $1.501 billion, impacting overall profitability. The company is managing a significant debt load, currently reported at $33.844 billion.
  

Adjusted EBITDA Analysis

The company reported a Total Adjusted EBITDA of $977 million for the nine months ended September 30, 2025, down from $1.817 billion in 2024. This decline signals challenges in maintaining operational efficiency amid rising costs and market pressures.

• Streaming Adjusted EBITDA: Decreased to $345 million from $268 million year-over-year, indicating struggles to balance growth with profitability.
• Studios Adjusted EBITDA: Showed a decrease to $2.712 billion, indicating the pressures of production costs.
• Global Linear Networks Adjusted EBITDA: Declined to $7.202 billion, reflecting the continued shift in viewing habits and advertising revenues.

Cash Flow and Liquidity

As of September 30, 2025, Warner Bros. Discovery's cash and cash equivalents totaled $4.294 billion, down from $5.312 billion at year-end 2024. The decrease is concerning, as it may limit the company's flexibility in managing operational costs and pursuing growth opportunities.

Legal and Regulatory Risks

The company continues to face ongoing legal challenges, including a class-action lawsuit regarding alleged misleading statements related to negotiations with the NBA, which could lead to potential liabilities. Such legal woes could further strain the company’s financial resources.

Market and Economic Context

The media and entertainment industry is navigating significant shifts, with consumer preferences moving toward on-demand streaming services. This has forced traditional media companies like Warner Bros. Discovery to adapt quickly and invest heavily in content creation and technology, often at the expense of short-term profitability.

Competitive Landscape

Warner Bros. Discovery faces intense competition from various streaming platforms, including Netflix, Disney+, and Amazon Prime. As such, the company must continue to innovate and differentiate its content offerings to attract and retain subscribers.

Conclusion and Recommendation

Warner Bros. Discovery, Inc. is at a pivotal juncture, exhibiting both growth potential and significant challenges. While total revenues are on the rise and the company is making strides in the streaming segment, the substantial losses and declining adjusted EBITDA raise red flags for investors.

Recommendation: Hold

Investors should maintain their positions in WBD as the company navigates its transformation, while keeping a close eye on profitability metrics, legal challenges, and competitive strategies. Future performance will be critical to watch, particularly as the company adjusts to the evolving media landscape.