Warner Bros. Discovery logs another miss as advertising weighs on quarter
Jacek_Sopotnicki/iStock Editorial via Getty Images

Warner Bros. Discovery (NASDAQ:WBD) missed expectations on top and bottom lines as the advertising contraction came for the company, as it is for most media peers.
Shares are down 1.3% postmarket.
Revenues slipped by nearly 11% year-over-year, to $9.82B. Excluding foreign exchange effects, on a pro forma combined basis, revenues fell by 8%.
The company swung to a hefty net loss of $2.31B from a year-ago gain of $156M, as reported. Looking on a pro forma basis for comparison purposes, loss widened to $1.85B from a year-ago loss of $659M.
The net income figure was affected by $1.92B in pretax amortization from acquisition-related assets, and $1.52B in pretax restructuring and other charges.
Earnings before interest, taxes, depreciation and amortization expanded heavily as reported (to $2.42B from $726M), but with pro form adjustments, it fell slightly from a year-ago $2.67B.
Revenue by segment: Studios, $3.09B (down 8% on a pro forma basis); Networks, $5.21B (down 11%); Direct-to-Consumer, $2.32B (down 7%).
Meanwhile in operations, the company is still keeping detailed streaming subscriber breakouts close to the vest - but it says it rose to nearly 95M global customers in aggregate across HBO, HBO max and Discovery+.
"We are reimagining and transforming the organization for the future while driving synergy enterprise-wide, increasing our target to at least $3.5 billion, and making significant progress on our combined DTC product," CEO David Zaslav said. "While we have lots more work to do, and there are some difficult decisions still to be made, we have total conviction in the opportunity ahead."
Cash from operations tumbled 85% to $124M, and free cash flow swung to a use of free cash of $192M (from year-ago free cash flow of $705M).
The company ended the quarter with $2.5B of cash on hand, vs. $50.4B in gross debt (net leverage of 5.1x), and it has an undrawn $6B revolving credit facility. During Q3 it voluntarily repaid $2.5B on a term loan due April 2025, and average duration of outstanding debt is 14 years (average cost of debt 4.3%).
Conference call to come at 4:30 p.m. ET.