Warner Bros Discovery reported second-quarter revenue below analysts’ expectations on Thursday, as weaker box office performance and a sharp decline in advertising revenue offset continued growth in its streaming business.
The media and entertainment company posted revenue of $8.72 billion, falling short of the $9.29 billion forecast by analysts surveyed by LSEG.
Studio revenue plunged 39%, with films including Mortal Kombat II and Supergirl failing to match the commercial success of last year’s blockbuster releases, including A Minecraft Movie and Sinners.
The company said it expects stronger box office results in the second half of the year, supported by major releases such as Digger and Dune: Part Three.
Advertising revenue also came under pressure, falling 22% during the quarter due to the absence of National Basketball Association (NBA) game broadcasts and continued declines in audiences for traditional linear television.
Warner Bros Discovery also cited higher energy prices linked to conflicts involving Iran and Ukraine, which weighed on international advertising spending. In addition, the 2026 FIFA World Cup diverted audiences and advertising revenue in several markets during June and July.
Revenue from the company’s networks division, which includes CNN, declined 17%.
Despite the weaker revenue, Warner Bros Discovery reported a surprise quarterly profit of 6 cents per share, outperforming analysts’ expectations of a 13-cent loss.
The stronger-than-expected earnings were driven by a 23% reduction in operating expenses, reflecting lower content spending and the absence of costs associated with NBA broadcasting rights.
Streaming remained the company’s strongest-performing business during the quarter, with revenue rising 10% as HBO Max’s international expansion and original programming, including The Pitt, attracted more subscribers.
The streaming platform is expected to play a central role in Warner Bros Discovery’s proposed $110 billion merger with Paramount, which the company believes will strengthen its position against rivals Netflix and Disney through a combined HBO Max and Paramount+ service.
In a positive development for the transaction, Britain’s competition regulator cleared the merger on Thursday, concluding that it was unlikely to reduce competition in the UK.
However, the deal continues to face legal challenges in the United States, where California and 11 other states are seeking to block the merger on antitrust grounds. Paramount has agreed to delay completion of the transaction until June 2027, while a federal trial is scheduled for March 2027.
Speaking after the earnings release, the chief executives of both companies expressed confidence that the merger would ultimately proceed despite the ongoing legal hurdles.
Boluwatife Enome
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