NEW YORK—As it announced a new strategy for its streaming operations, Warner Bros. Discovery reported that it added only 1.7 million direct-to-consumer subs worldwide in Q2, 2022, growing the Q1 sub count of 90.4 million to 92.1 million worldwide.
In the U.S. DTC subs for HBO Max and discovery+ actually declined from 53.3 million in Q1 2022 to 53.0 in Q2 2022.
The sluggish increase globally and the declines in the U.S. reflects in part a change to how the combined company reported subscribers. For example, HBO used to report unactivated subs under its deal with AT&T to offer HBO Max. Those are now excluded.
“We've had a busy, productive four months since launching Warner Bros. Discovery, and have more conviction than ever in the massive opportunity ahead,” David Zaslav, president and CEO of Warner Bros. Discovery said in a statement. “We have the most powerful creative engine and bouquet of owned content in the world, as highlighted by our industry leading 193 Emmy nominations, and we intend to maximize the value of that content through a broad distribution model that includes theatrical, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more, everywhere in the world. We’re confident we’re on the right path to meet our strategic goals and really excel, both creatively and financially, and couldn’t be more excited about the future of our company.”
The company also reported a net loss of $3,418 million, and includes $2,004 million of amortization of intangibles, $1,033 million of restructuring and other charges, and $983 million of transaction and integration expenses.
Other highlights included:
- Q2 total reported revenues were $9,827 million. Pro forma combined revenues decreased 1% ex-FX compared to the prior year quarter.
- Net loss available to Warner Bros. Discovery, Inc. was $(3,418) million, and includes $2,004 million of amortization of intangibles, $1,033 million of restructuring and other charges, and $983 million of transaction and integration expenses.
- Total reported Adjusted EBITDA was $1,664 million. Pro forma combined Adjusted EBITDA decreased 31% ex-FX compared to the prior year quarter.
- Cash provided by operating activities increased to $1,011 million and reported free cash flow increased to $789 million.
- Ended Q2 with $3,896 million of cash on hand, gross debt of $53.0 billion, and net leverage of 5.0x.
- Ended Q2 with 92.1 million global DTC subscribers, an increase of 1.7 million versus 90.4 million subscribers at the end of Q1, as adjusted for the Company's new DTC subscriber definition. The new definition resulted in the exclusion of 10 million legacy Discovery non-core subscribers and unactivated AT&T mobility subscribers from the Q1 subscriber count.
- Warner Bros. Discovery was the #1 TV portfolio for total time spent by viewers in the U.S., TNT was the #1 TV network overall for Men 18-49 & 18-34, driven by sports, and TLC was the #1 cable network in the industry, ex-sports, in Primetime for Women 25-54.
- Re-extended the agreement with AT&T to continue to offer its internet and mobility customers access to HBO Max’s portfolio of original programming and series.
