Warner Bros Discovery says HBO Max lifted streaming as Paramount deal draws scrutiny

Warner Bros. Discovery reported second-quarter earnings ahead of Wall Street expectations even as revenue missed estimates, with streaming again providing the clearest area of growth and the company saying its U.S. bundle with Disney is delivering measurable subscriber benefits. Revenue fell 12% year over year on a constant-currency basis to $8.72 billion, below the $9.29 billion analyst consensus estimate, while earnings were 6 cents a share versus expectations for a 13-cent loss. Net income dropped 91% to $149 million and adjusted EBITDA declined 6% to $1.88 billion. The streaming division posted revenue of $3.08 billion, up 10% on a constant-currency basis, as HBO Max added subscribers, expanded internationally and benefited from new distribution agreements. Segment advertising revenue rose 8% as ad-supported subscribers increased, distribution revenue climbed 11%, and streaming adjusted EBITDA improved to $512 million from $293 million a year earlier. Executives also said the discounted bundle combining Max, Disney+ and Hulu has lowered churn, improved subscriber additions and produced more engaged customers who stay subscribed longer than users of standalone services. Jean-Briac Perrette called the Disney partnership in the U.S. the company’s longest-running and most successful programmer-led bundle. Warner Bros. Discovery said the bundle reflects a broader push toward partnerships designed to make streaming offers more compelling while reducing subscriber turnover. Perrette pointed to distributor-led bundles including Verizon’s package of Max with Netflix in the U.S., as well as arrangements with Mercado Libre and Claro in Latin America and Canal+ and Sky in Europe. Executives also said 2027 could be HBO’s strongest year yet, pointing to a slate that includes Harry Potter, The White Lotus and Lanterns. Elsewhere, the studios and linear networks businesses remained under pressure. Studios revenue fell 39% to $2.33 billion as a weaker film slate hurt content and theatrical sales, while global linear networks revenue declined 17% to $3.99 billion as the loss of NBA broadcast rights, a 10% decline in domestic linear pay-TV subscribers and weaker audience levels weighed on distribution and advertising. The company generated $848 million in operating cash flow and $572 million in free cash flow, ending the quarter with $3.4 billion in cash. Separately, Warner Bros. Discovery said its proposed $110 billion merger with Paramount Skydance remains on track for a U.S. antitrust trial beginning March 2, 2027, though the transaction has received U.K. regulatory clearance and the company said it remains highly confident the deal will close.