DALLAS—While Netflix reported sub losses this week, AT&T reported healthy growth for HBO and HBO Max, with HBO and HBO Max hitting 76.8 million global subs in Q1 2022.
That was up 12.8 million year from Q1 2021 and up 3.0 million from Q4, 2021. At the end of the quarter, there were 48.6 million domestic HBO Max and HBO subscribers versus 44.2 million in the year-ago quarter, up 4.4 million year over year.
With the recent completion of the Warner Bros. Discovery merger, this is the last quarter that AT&T will be reporting.
Revenues for WarnerMedia under AT&T for the first quarter were $8.7 billion, up 2.5% versus the year-ago quarter, driven by higher subscription revenues and higher content and other revenues, partially offset by lower advertising revenues.
Subscription revenues were $4.0 billion, up 4.4%, primarily reflecting growth of HBO Max.
Content and Other revenues were $3.1 billion, up 3.4%, driven by higher theatrical revenues, higher HBO Max licensing, and partially offset by lower TV licensing.
Advertising revenues were $1.7 billion, down 3.0% year over year due to lower linear audiences and tough comparisons to the prior-year political environment, partially offset by higher sports.
But operating expenses totaled $7.4 billion, up 13.0% year over year and operating income was $1.3 billion, down 32.7% year over year, as a result of continued investments in HBO Max as well as in the launch of CNN+ at the end of the quarter. Operating income margin was 15.1%, compared to 23.0% in the year-ago quarter.
Warner Bros. Discovery is carrying about $58 billion in debt and the company will be taking a close look at ongoing costs and investments as it works to pay that debt down while funding investments needed to remain competitive in the streaming wars.
