In This Article:
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Direct-to-Consumer Subscribers: Ended 2024 with approximately 117 million subscribers, adding about 6.5 million in Q4.
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Direct-to-Consumer EBITDA: Contributed almost $700 million, a $3 billion improvement over two years.
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Subscriber Growth Target: Clear path to at least 150 million subscribers by the end of 2026.
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Studios EBITDA Target: Aiming to generate $3 billion or more in EBITDA.
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Linear Television Agreements: Secured multiyear renewal agreements with five of the six largest ATV providers in America, with overall rate increases.
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Warner Bros. Discovery Inc (NASDAQ:WBD) added 6.5 million subscribers in Q4 2024, reaching a total of 117 million subscribers globally.
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The direct-to-consumer business contributed almost $700 million in EBITDA, marking a $3 billion improvement over two years.
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The company has a clear path to achieving at least 150 million subscribers by the end of 2026, which is expected to drive further revenue and EBITDA growth.
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Warner Bros. Discovery Inc (NASDAQ:WBD) has struck multiyear renewal agreements with five of the six largest ATV providers in America, providing stability to its linear business.
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The company is implementing a new organizational structure to enhance strategic flexibility and unlock additional shareholder value.
Negative Points
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Warner Bros. Discovery Inc (NASDAQ:WBD) faces near-term linear pressure as it adds direct-to-consumer and greater packaging flexibility.
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The company expects slower rate increases in its domestic affiliate business, moving from mid-single-digit to low single-digit growth.
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There is ongoing pressure on the linear television business, with weaker ad sales results than expected in Q4 2024.
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The company anticipates some deterioration in ARPU in the near term due to international expansion and lower-priced offerings.
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Warner Bros. Discovery Inc (NASDAQ:WBD) is not providing consolidated financial guidance for 2025, citing uncertainties and moving pieces across its business segments.
Q & A Highlights
Q: Can you give an update on the restructuring and its potential long-term impacts? Also, how do you plan to address near-term linear pressure as you add direct-to-consumer and greater packaging flexibility? A: Gunnar Wiedenfels, CFO, explained that the restructuring is a priority and significant progress has been made, with the new structure effective January 1. This reorganization aims to enhance strategic flexibility and unlock shareholder value. David Zaslav, CEO, added that the restructuring provides visibility into the strength of their Studio and streaming business. Regarding linear pressure, Wiedenfels highlighted successful early renewals with rate increases, providing stability. He noted that while rate increases will be slower, the company is seeing positive revenue impacts internationally.