Warner Bros. Discovery recently reported a 6% decline in quarterly revenue, even as its streaming service HBO Max gained new subscribers thanks to hits like “Heated Rivals.” However, the company is facing challenges with its traditional TV and film sectors.
Interestingly, there was no mention of any discussions with Paramount Skydance in their earnings report released on Thursday. Paramount Skydance’s latest proposal could disrupt their existing agreement with Netflix. It appears that Paramount has drawn Warner Brothers back to the negotiation table, potentially with an improved cash offer.
Warner Bros. Discovery’s total revenue for the quarter was about $9.5 billion, which aligns with estimates from LSEG. On a more positive note, HBO Max continues to thrive, bolstered by series like “Heated Rivalry” and “It: Welcome to Derry.”
During the quarter, Warner added 3.5 million streaming subscribers, bringing the total worldwide count to 131.6 million. This is a notable increase, although the streaming segment’s revenue grew just 5% to nearly $2.8 billion. Adjusted profit, however, fell 4% to $393 million due to the end of some distribution deals.
In contrast, the traditional arms of the business took a bit of a hit, with adjusted profit from the film and television studio group dropping 23% to $728 million. They did release nine top-grossing films in 2025, but, curiously, there were no major theatrical releases during the holiday season.
Revenue in the TV studio segment fell 18%, significantly affecting Warner’s linear networks, which are struggling with a decline in pay-TV subscribers across the board. The television segment’s sales decreased by 12% year-over-year to $4.2 billion, and adjusted profit fell 27% to $1.4 billion.
Going forward, investors are likely to keep an eye out for any updates regarding potential deals. Warner’s board has indicated they haven’t decided yet if the new proposal from Paramount is better than a merger with Netflix. They noted they would be more involved in discussions, suggesting that if a better offer surfaces, Netflix could adjust theirs within four business days.
