Q2 2026 Warner Bros Discovery Inc Earnings Call Transcript
Key Points
- Streaming segment achieved record quarterly revenue of over $3 billion, with subscriber-related revenue growth accelerating to 10% ex-FX.
- Streaming adjusted EBITDA surged over 60% year-over-year to $512 million, with margins improving to nearly 17%.
- Strong content pipeline with major titles like 'Harry Potter,' 'Lanterns,' and 'The White Lotus' expected to drive continued subscriber growth and engagement.
- Studio segment is diversifying with plans to ramp up film production from 14 films in 2026 to 19 in 2027, leveraging strong IP and talent relationships.
- Healthy demand for content licensing, with high-margin library revenues and a positive outlook for downstream licensing as SVOD shows return to the library.
- Bundling partnerships (e.g., with Disney, Verizon, and international distributors) are improving subscriber acquisition and reducing churn, contributing to record-low churn expectations for 2026.
- Linear advertising revenue declined nearly 30% in Q2, largely due to the loss of NBA rights and a weaker international ad market.
- Studio segment faced underperformance from recent films, with a lighter tentpole slate in 2026 compared to the prior year.
- International advertising trends worsened in Q2 compared to Q1, with consumer caution and geopolitical uncertainty impacting markets.
- The prolonged Paramount Skydance transaction is creating uncertainty and potential distraction, though management remains confident in closing.
- The company is still navigating the impact of the NBA loss on linear networks, with ad revenue headwinds expected to persist.
- Visibility into the advertising market for the rest of 2026 is limited, with mixed trends across regions and the World Cup crowding out ad spend.
Ladies and gentlemen, welcome to the Warner Bros. Discovery second quarter 2026 earnings Conference Call. (Operator Instructions) Additionally, please be advised that today's conference call is being recorded.
I would now like to hand the conference over to Mr. Peter Lee, Senior Vice President, Investor Relations. You may begin.
Good morning, and thank you for joining us for our Q2 2026 earnings call. Joining me today from Warner Bros. Discovery's management is David Zaslav, President and Chief Executive Officer; Gunnar Wiedenfels, our Chief Financial Officer; and JB Perrette, CEO and President, Global Streaming and Games.
This morning, we issued our earnings release, shareholder letter and trending schedules. And these materials can be found on our website at ir.wbd.com.
Today's presentation will include forward-looking statements that we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward
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