David Zaslav

Source: Warner Bros Discovery

David Zaslav

Warner Bros Discovery executives did not discuss the ongoing merger battle between Paramount and Netflix in Thursday’s Q4 2025 earnings call as they reported a 6% year-on-year revenue decline to $9.5bn where the highlight was streaming and HBO Max global subs grew to 131.6m.

“While the Netflix Merger Agreement remains in effect and the Board continues to recommend the Netflix transaction and has not withdrawn or modified its recommendation, the board recently determined that the latest proposal from Paramount Skydance could reasonably be expected to lead to a “Company Superior Proposal” as defined in the Netflix Merger Agreement,” the company’s letter to shareholders said. “WBD continues to engage with PSKY to determine if a proposal that constitutes such a “Company Superior Proposal” can be reached.”

WBD reduced losses to $252m loss in the fourth quarter of 2025, when Netflix and Paramount were making their initial overtures for the company. Paramount has had a good week after raising its bid for the entirety of WBD to $31 per share, among other sweeteners, while Netflix co-CEO Ted Sarandos is understood to be in Washington DC today talking to White House officials and regulators about the streamer’s bid, which remains at $27.75 for WBD’s streaming and studios segment.

WBD’s streaming segment delivered a 5% gain to $2.8bn revenue as distribution and advertising increased by 3% and 18%, respectively. After rolling out in Italy and Germany, international HBO Max membership increased from 70m in Q3 2025 to 72.4m, while North America grew from 58m to 59.2m.

HBO Max will launch in the UK & Ireland on March 26, and WBD executives expect to end Q1 2026 on more than 140m members, and more than 150m by the end of the year. WBD said it will stop reporting subscriber numbers – a matter which would no longer be in its hands given that Paramount or Netflix will become the new owner. Netflix and Disney previously stopped reporting quarterly subscriber updates.

The streaming and studios unit, which is Netflix’s target acquisition, saw a 4% revenue increase to $5.6bn as adjusted EBITDA increased by 6% to $1.2bn.

Studios revenue fell 13% to $3.2bn. Warner Bros did not release a film theatrically in the quarter after a sensational 2025 in which a string of hits generated $4.4bn in global ticket sales. Warner Bros has the two best picture Oscar frontrunners in One Battle After Another and Sinners and the outcome will be decided at the 98th Academy Awards on March 15.

Emerald Fennell’s Wuthering Heights has opened well in Q1 and sits on more than $157m worldwide after two weekends in release. The theatrical slate for the year ahead includes Supergirl, Dune: Messiah, Evil Dead Burn from New Line, and Warner Bros Animation’s first release, The Cat In The Hat.

The cable TV unit saw a 12% drop in revenue to $4.2bn. This is the division that will get spun off into the Global Networks stand-alone that WBD CFO Gunnar Wiedenfels will run, while WBD CEO David Zaslav will take charge of streaming and studios. Who runs these divisions after WBD shareholders vote on new owners on March 20 remains to be seen.

Total revenue for 2025 of $37.3bn dropped 5% year-on-year. Free cash flow reached $1.4bn and the company ended Q4 with $4.6bn of cash on hand, and debt of $33.5bn.

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