Warner Bros. Discovery reports before the market opens on Thursday, August 6, 2026. Earnings materials are expected around 7:00 a.m. ET, followed by the conference call at 8:00 a.m. ET.
This is no longer a conventional earnings event. WBD is trading primarily as a merger-arbitrage security, with operating results important mainly because they affect:
WBD closed August 5 at $25.99, versus Paramount’s $31-per-share cash offer—approximately 19% gross upside, before the transaction’s ticking consideration. The large spread reflects the state antitrust lawsuit, the pause in closing until a court ruling or June 1, 2027, and a trial now scheduled to begin March 2, 2027.
Consequently, a modest earnings beat or miss may have less impact than any new information about the merger timetable. Still, the report will provide the first major test of WBD’s operating trajectory since the deal became materially delayed.
| Metric | Q1 2026 |
|---|---|
| Revenue | $8.89B |
| Adjusted EBITDA | $2.20B |
| Free cash flow | $(476)M |
| Streaming revenue | $2.89B |
| Streaming adjusted EBITDA | $438M |
| Studios adjusted EBITDA | $775M |
| Global Linear Networks adjusted EBITDA | $1.63B |
| Net debt | $30.1B |
| Net leverage | 3.4x |
Q1’s reported $2.9 billion net loss was distorted by the $2.8 billion Netflix termination fee, which Paramount paid on WBD’s behalf. Investors should again focus on adjusted EBITDA, free cash flow and segment performance rather than headline GAAP earnings.
For comparison, WBD reported the following in Q2 2025:
| Metric | Q2 2025 |
|---|---|
| Revenue | $9.81B |
| Adjusted EBITDA | $1.95B |
| Free cash flow | $702M |
| Streaming subscribers | 125.7M |
| Streaming adjusted EBITDA | $293M |
| Studios adjusted EBITDA | $863M |
| Global Linear Networks adjusted EBITDA | $1.51B |
The comparisons are unusually complicated by sports-rights changes, theatrical timing, internal content licensing, international HBO Max launches and transaction-related expenses.
Streaming was WBD’s clearest growth engine in Q1:
The international HBO Max rollout is now largely complete, including launches in Germany, Italy, the U.K. and Ireland. Q2 should therefore begin to show whether the strategy can transition from launch-driven subscriber additions to sustainable monetization and operating leverage.
Positive read: Double-digit subscriber-related revenue growth or clear acceleration, continued subscriber momentum and expanding EBITDA despite launch investments.
Negative read: Subscriber growth without corresponding revenue growth, weak international monetization, or a material sequential decline in Streaming EBITDA.
Q1 Studios results were exceptionally strong, with revenue rising 31% ex-FX and adjusted EBITDA reaching $775 million. Much of the growth reflected internal licensing tied to international HBO Max expansion.
Q2 is a tougher test. Management explicitly warned that the segment would compare against:
Q2 2025 Studios adjusted EBITDA was $863 million, making a year-over-year decline likely and not necessarily indicative of deterioration.
A result below Q2 2025 can still be satisfactory if the full-year outlook remains intact and the underlying film, television and library businesses perform as planned.
Global Linear Networks remains WBD’s largest EBITDA contributor, but it is structurally declining. In Q1:
Q2 advertising will contain severe sports-related distortions. Management expects the absence of the NBA to reduce year-over-year advertising revenue by approximately 20% ex-FX, partly offset by an approximately four-percentage-point benefit from carrying the NCAA Final Four and championship game and not carrying the NHL Stanley Cup Final.
Crucially, management has said the loss of the NBA should be beneficial to first-half adjusted EBITDA, because rights-cost savings should exceed the lost advertising revenue.
Investors should judge Linear Networks on whether:
A large advertising decline is already expected. The more concerning outcome would be a sharper-than-anticipated EBITDA decline despite the NBA cost savings.
Q1 free cash flow was negative $476 million, reflecting content investment, taxes, working-capital timing and about $100 million of separation- and transaction-related costs. Q1 is seasonally WBD’s weakest cash-flow quarter, so Q2 should improve substantially.
The prior-year comparison is demanding: Q2 2025 produced $702 million of free cash flow despite approximately $250 million of separation expenses.
Key questions include:
With closing potentially delayed well into 2027, WBD may need to operate independently for several additional quarters. Sustained positive free cash flow would help protect the standalone valuation if the deal ultimately fails.
The original agreement calls for $31 per share in cash, plus approximately $0.25 for every 90 days after September 30, 2026. Paramount also owes WBD a $7 billion regulatory termination fee under specified antitrust-related termination circumstances.
The federal government cleared the transaction, but 12 state attorneys general sued in July to block it. Closing is now paused pending a court ruling or until June 1, 2027, and the antitrust trial is scheduled for March 2, 2027.
Management declined to answer transaction questions on the Q1 call. It may again limit discussion, but the dramatic change in timing makes some update necessary. Any suggestion of weakening commitment, renegotiation or operating disruption would likely outweigh a strong quarterly result.
The central question is not whether WBD beats quarterly earnings expectations—it is whether the operating business is strong enough to support the stock while investors wait for an uncertain merger outcome.
The best result would combine continued Streaming acceleration, controlled Linear declines and strong cash generation. That would both improve WBD’s standalone downside protection and reduce the risk that the extended regulatory process damages the company.
Conversely, weak operating performance would make the stock increasingly dependent on the Paramount deal closing. With WBD trading at $25.99 against a $31 cash offer, the market is already assigning substantial weight to that risk.