Warner Bros Discovery Inc (NASDAQ:WBD) stock fell 1.82% (As on February 27, 11:18:37 AM UTC-4, Source: Google Finance) after the company reported a larger-than-expected fourth-quarter loss, though revenue and subscriber growth topped estimates, as the media and entertainment giant considers a revised takeover bid from Paramount Skydance (PSKY). Warner Bros., which operates the HBO Max streaming service, saw revenue in the streaming and studios segment increase 4% to $5.55 billion in the fourth quarter. Studios revenue dropped 13% while streaming inclined 5%. Global streaming subscribers came in at 131.6 million, up from 116.9 million in the prior-year period, and ahead of the average analyst estimate of 130.9 million.
Moreover, revenue in the global linear networks unit fell 12% to around $4.2 billion. Within the segment, distribution revenue moved down 8% amid lower domestic linear pay TV subscribers, while advertising slipped 11%, driven by domestic audience declines. Content revenue tumbled 31% due to the timing of third-party licensing deals.
Meanwhile, Netflix is walking away from its offer to buy Warner Bros. Discovery’s studio and streaming business. Warner’s board announced that Skydance-owned Paramount’s latest offer to buy the entire company for $31 per share was superior to the agreement it had previously struck with Netflix. Warner gave Netflix four business days to come up with a counteroffer — but Netflix instead responded less than two hours later, declining to raise its proposal. It said the new price it would have to pay made the deal “no longer financially attractive.”
Warner Bros.’ net loss narrowed to $0.10 a share for the December quarter from $0.20 the year before, compared with the FactSet-polled consensus for a $0.03 loss. The company had reported the adjusted revenue decline of 6 percent to $9.46 billion in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $9.35 billion.
The company anticipates finishing the ongoing three-month period with more than 140 million subscribers, helped by HBO Max’s recent launches in Germany and Italy and its upcoming introduction in the UK and Ireland next month, it said in the letter. The group is targeting more than 150 million subscribers by the end of 2026.
Warner Bros. projects subscriber-related revenue growth to continue to accelerate throughout the year, driven by factors including “healthy” subscriber gains, a full-year benefit of subscription price increases and a robust content slate. The company will also continue to invest in content and marketing to support the continuing global rollout of HBO Max and further penetration of existing markets.