Warner Bros. Discovery reported a 10 percent year-over-year revenue decline in the first quarter of 2025, totaling $9 billion, missing analysts’ expectations. The results reflect a mix of gains in streaming and setbacks in traditional segments such as theatrical distribution, television networks, and home entertainment. The company recorded a net loss of $453 million for the quarter, a significant improvement from the $966 million loss recorded during the same period last year.
The quarterly revenue figure fell short of the $9.75 billion forecast from analysts surveyed by Zacks Investment Research. Earnings per share landed at a loss of 18 cents per diluted share, below the expected loss of 13 cents. This underperformance came amid a restructuring effort that took effect at the start of the year, separating the company’s operations into three primary divisions: linear networks, studios, and streaming.
A sharp 27 percent drop in content revenue played a major role in the overall decline. This decrease was primarily linked to a weaker theatrical slate compared to the first quarter of 2024, which featured strong box office results from titles such as Dune: Part Two and Godzilla x Kong: The New Empire. In contrast, the latest quarter had no equivalent theatrical performers. In addition, last year’s performance was boosted by home entertainment sales of Wonka and Aquaman and the Lost Kingdom, both of which delivered strong post-theater returns.
The lack of major gaming titles also had an impact. No new releases were scheduled for the current quarter, a stark contrast to the prior year, which included Suicide Squad: Kill the Justice League and residual momentum from Hogwarts Legacy and Mortal Kombat 1. This resulted in a 48 percent drop in games revenue.
The studio division saw an 18 percent revenue drop, falling to $2.3 billion. However, operating profit in this segment rose 41 percent to $259 million, attributed largely to reduced costs across production and distribution. Distribution and advertising revenue both fell by approximately 80 percent and 75 percent respectively, with each category generating only $1 million in the quarter. Other studio revenue decreased by 8 percent to $173 million. Television-related revenue declined 4 percent, influenced by delivery schedules and shifts in internal content sales.
The company’s streaming division continued to expand, offering a contrasting narrative to the downward trends elsewhere. The segment delivered a quarterly profit of $339 million, up from $86 million in the same quarter last year. Streaming revenue rose 8 percent to $2.7 billion. Warner Bros. Discovery added 5.3 million subscribers across its streaming platforms, bringing the global total to 122.3 million. Of those, 57.6 million were domestic and 64.6 million were international.
Distribution revenue in streaming increased by 7 percent, reaching $2.33 billion. This growth was driven by international expansion of the Max platform and newly signed domestic distribution agreements. Advertising revenue within the streaming segment rose 35 percent to $237 million, thanks to growth in ad-supported subscription tiers. Subscriber-related revenue climbed 9 percent to $2.6 billion. At the same time, content revenue within the streaming division fell 11 percent to $88 million, reflecting lower licensing activity following Max’s expansion into new territories, including Australia.
The global average revenue per user fell to $7.11, while domestic ARPU dropped to $11.15 and international ARPU settled at $3.63. These declines were attributed to a change in subscriber mix, specifically a broader distribution of Max Basic with Ads, which carries a lower ARPU than traditional subscription tiers.
The company introduced a new $7.99 monthly “extra member” add-on, an initiative designed to limit password sharing and encourage account monetization. Max is projected to reach availability in more than 85 global markets by the end of the year, with planned launches in the U.K., Ireland, Germany, and Italy beginning in early 2026. Warner Bros. Discovery aims to grow its global subscriber base to at least 150 million by the close of 2026. Executives have projected that the streaming division could deliver approximately $1.3 billion in profit during 2025.
In a letter to shareholders, CEO David Zaslav highlighted Max’s programming slate and audience engagement. He pointed to the success of The White Lotus, now in its third season, calling it one of television’s rare examples of appointment-viewing. According to the company, the show is averaging over 25 million global viewers per episode, marking a more than 40 percent increase from season two.
Zaslav also praised The Pitt, a serialized medical drama that averaged more than 12 million global viewers across 15 episodes. The show, which has been renewed for a second season, represents a push into genre-specific programming designed to capture steady weekly audiences. Zaslav said Warner Bros. Discovery is in active development on similar procedurals targeted at the same segment of viewers.
The upcoming Harry Potter series has entered the production phase, with a tentative premiere date set for early 2027. The studio intends to maintain a consistent pipeline of IP-driven and serialized content designed to build long-term viewer loyalty and subscriber retention.
The company’s linear networks segment continued to struggle, as domestic cord-cutting and global distribution challenges persisted. Revenue from this business fell 7 percent to $4.8 billion, while operating profit declined 15 percent to $1.8 billion. Distribution revenue dropped 9 percent, largely because of a reduction in domestic pay TV subscribers. A modest 2 percent increase in domestic affiliate rates partially offset this decline.
International distribution trends were also unfavorable, with subscriber declines and lower affiliate rates affecting overall revenue. Advertising sales within the linear segment dropped 12 percent to $1.8 billion. A 27 percent decline in domestic network audiences had the largest effect, though there were marginal improvements in international markets and live sports programming.
Zaslav addressed shareholders and analysts during a morning earnings call, reinforcing the company’s commitment to profitability and long-term content planning. He reaffirmed Warner Bros. Discovery’s focus on segment-specific strategies, including scaling the ad-supported Max tier, expanding in growth territories, and securing wider distribution agreements.
He also referenced a significant internal licensing agreement set to benefit the studio division in the second quarter. A similar transaction occurred during the fourth quarter of 2024, which helped offset revenue volatility across both studio and streaming units. The upcoming second quarter is expected to reflect the impact of major theatrical releases such as A Minecraft Movie and Sinners, while Superman is scheduled for a July release.
Warner Bros. Discovery shares fell by approximately 2 percent in early trading following the earnings announcement. The company attributed the quarter’s losses to $1.6 billion in pre-tax expenses related to amortization of acquired content, valuation step-ups, and restructuring charges stemming from the merger and organizational changes.
Executives emphasized that the restructuring—which now separates the linear, studio, and streaming divisions—will allow for more targeted management and clearer financial reporting. The aim is to provide greater clarity and accountability as the company continues to pursue long-term profitability across each segment.
