Warner Bros. Discovery reports record streaming growth despite missing revenue targets and facing merger hurdles.
Warner Bros. Discovery reported second-quarter revenue of $8.72 billion, falling short of the $9.29 billion projected by Wall Street. The company's total revenue declined by 11% compared to the previous year, largely due to the absence of NBA broadcasting rights and a 39% drop in studio division revenue. However, the streaming segment, anchored by HBO Max, saw record-breaking growth, with revenue increasing 10% to $3.1 billion and adjusted EBITDA jumping 75% to $512 million. CEO David Zaslav attributed the streaming success to creative excellence and quality storytelling in titles like Euphoria and House of the Dragon. Meanwhile, the company faces a legal challenge from 12 state attorneys general and the Writers Guild of America seeking to block its $110 billion merger with Paramount. Paramount CEO David Ellison expressed openness to a settlement but maintained that the company believes it will win in court. The merger trial is scheduled for March 2027.