warner bros discovery reported a big quarterly loss, even as its direct-to-consumer segment turned a profit for the first time.
The company expects the DTC, or streaming, business to be profitable for 2023, a year ahead of its expectations, CEO David Zaslav said in an earnings release Friday morning.
First quarter revenue was $10.7 billion, roughly in line with analysts’ estimates. The company reported a net loss of $1.1 billion and adjusted EBITDA of $2.6 billion.
Here’s what the company reported, versus what analysts were estimating, according to Refinitiv:
- Income: $10.7 billion vs. $10.78 billion expected
- Loss per share: 44 cents versus earnings expectations of 1 percent
Like all major media companies, Warner Bros. Discovery is turning to streaming video as millions of Americans cancel traditional pay TV each year. The company ended the quarter with 97.6 million streaming subscribers, up 1.6 million from the previous quarter.
The direct-to-consumer segment generated a profit of $50 million for the quarter.
Warner Bros. Discovery is adding Discovery+ content to HBO Max and relaunching the service as Max in the US later this month. zaslav previously promised Its streaming business will turn unprofitable by 2024 and turn profitable by 2025. Zaslav has aggressively cut back on material spending, including deleting shows and movies from max, Jumpstart efforts to make the business profitable.
Warner Bros. Discovery lost $930 million in free cash flow in the quarter, primarily due to interest rates and sports media rights payments.
The company ended the fourth quarter with $49.5 billion in debt on its balance sheet, and $2.6 billion in cash on hand. Warner Bros. is trying to discover boost free cash flow by cutting costs including Thousands of employees laid off last yearTo reduce your heavy debt load.
This is a developing story. Check back for updates.
WATCH: Warner Bros. Discovery CEO David Zaslav speaks to CNBC after unveiling ‘Max’
