Warner Bros. Discovery NASDAQ: WBD said its streaming segment surpassed $3 billion in quarterly revenue for the first time in the second quarter of 2026, as HBO Max benefited from subscriber growth, engagement and advertising monetization.
President and Chief Executive Officer David Zaslav said streaming revenue growth accelerated during the quarter, with subscriber-related revenue up 10% excluding foreign exchange effects. The segment generated $512 million in adjusted EBITDA, representing an increase of more than 60% from the second quarter of 2025 and an adjusted EBITDA margin of nearly 17%.
Zaslav characterized the result as a continuation of HBO Max's transition from a mostly U.S.-focused streaming service that lost more than $2 billion in 2022 to a global growth asset. He said HBO programming has helped drive the service's performance internationally.
HBO Pipeline and Global Streaming Growth
According to Zaslav, several HBO series have reached substantial global audiences in 2026. “The Pitt,” “A Knight of the Seven Kingdoms,” “House of the Dragon” and “Euphoria” have each averaged at least 25 million viewers per episode worldwide, with several programs surpassing 30 million average viewers.
The company highlighted upcoming programming including “The Gilded Age,” “Lanterns” and a “Harry Potter” series. Zaslav said Warner Bros. Discovery has greenlit “Harry Potter” for the next 10 consecutive years and plans to debut the series on Christmas Day. He also cited the return of “The White Lotus” and a content slate extending into 2027.
JB Perrette, CEO and President of Global Streaming and Games, said management views 2027 as potentially its strongest content year yet. He pointed to returning series including “The White Lotus,” “The Pitt” and “The Last of Us,” along with continued development of international originals.
Perrette said distribution revenue would have grown in the low teens excluding the impact of a previously disclosed related-party deal that the company was still lapping during part of the second quarter. He said the company expects the trajectory of distribution growth to remain solid through the rest of the year, supported by subscriber gains, advertising, engagement and pricing-related monetization efforts.
Management also emphasized the role of streaming bundles. Perrette said bundles with distributors and programmers have contributed to subscriber acquisition and retention, with “meaningful improvements in churn.” He cited offerings involving Disney in the U.S., Verizon, Netflix, MercadoLibre, Claro, Canal+, Sky, RTL+ and Viu. Warner Bros. Discovery expects 2026 to be its best year for retention and lower churn, he said.
Networks Show Sports, News Resilience
Zaslav said the company’s networks continued to face broader industry headwinds but benefited from sports, news and entertainment programming. TNT Sports aired what he described as the highest-rated national championship basketball game ever, while Major League Baseball regular-season viewership was up more than 20% and NHL playoff viewership increased 50%.
CNN’s linear viewership rose 24% from the prior year during the quarter, while minutes spent across CNN platforms increased 19%, according to Zaslav. He also said Warner Bros. Discovery’s network brands accounted for four of the 10 top general-entertainment cable shows in the quarter.
Discovery’s “Shark Week” recorded its highest year-over-year growth in more than a decade during its first three nights, with Discovery ranking first among cable networks in prime time among viewers ages 25 to 54, Zaslav said.
Chief Financial Officer Gunnar Wiedenfels said linear advertising revenue was affected by the absence of NBA programming, which was a negative factor for ad revenue but a positive contributor to profits in the second quarter. In the U.S., he said advertising trends remained broadly consistent with the first quarter and late 2025. Internationally, however, second-quarter conditions were weaker than the first quarter amid consumer caution and geopolitical uncertainty.
Wiedenfels said visibility for the rest of the year remained limited and noted that the World Cup could affect viewership and advertising across markets for media companies not carrying the event.
Studio Strategy Focuses on Larger Film Output and Licensing
Management acknowledged that a number of recent films underperformed expectations and that the studio business remains subject to volatility. Still, Wiedenfels reiterated Warner Bros. Discovery’s long-term target of more than $3 billion in adjusted EBITDA from the studio segment.
The company is producing 14 films in 2026 and plans to increase output to 19 films in 2027, Wiedenfels said. He said the larger slate is expected to include a mix of original movies, tentpole franchises, animation and films from the New Line label.
Zaslav said the 2027 lineup is expected to include “Lord of the Rings,” “Batman,” “Superman” and a sequel to “Minecraft.” The company also has “Cat in the Hat” and “Practical Magic” scheduled for the latter part of 2026.
Wiedenfels said the studio’s television production, consumer products, retail, tours and games operations are intended to reduce the volatility of theatrical results. He cited more than 80 Warner Bros. Television shows currently on air across platforms and said licensing and library revenue should benefit as subscription-video productions return to replenish the company’s content library.
Demand for library programming remains healthy, including for shows that are about a decade old, Wiedenfels said. He described the studio as a library-driven licensing business that is replenished by new content, while noting that Warner Bros. Discovery increasingly keeps programming for internal use across HBO Max and its linear networks.
The company also cited games as a future opportunity following a portfolio restructuring. Wiedenfels said “LEGO Batman” is due to launch this year, while a second installment of “Hogwarts Legacy” is the major title ahead.
Paramount Skydance Transaction
Warner Bros. Discovery did not take analyst questions regarding its proposed transaction with Paramount Skydance. Zaslav said the company remains confident the agreed-upon sale will be completed and said employees remain focused on improving operating performance while the transaction is pending.
About Warner Bros. Discovery (NASDAQ:WBD)
Warner Bros. Discovery NASDAQ: WBD is a global media and entertainment company formed when WarnerMedia and Discovery, Inc combined their businesses in 2022. Headquartered in New York City, the company assembles a broad portfolio of film and television production, linear and cable networks, streaming services and consumer distribution operations. Its assets span well-known studio brands, premium scripted and unscripted programming, news and factual entertainment, and licensed franchise properties.
The company's core activities include film and television production and distribution through units such as Warner Bros.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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