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Due to its commendable Q1 2023 streaming numbers, Warner Bros. Discovery expects its streaming business to stay profitable this year.
On Friday, May 5, Warner Bros Discovery (NASDAQ: WBD) reported its Q1 2023 earnings before the bell that came in mixed. For instance, the media and entertainment giant reported a significant overall loss despite raking in profit from its streaming endeavors. Warner Bros. Discovery lost $930 million in quarterly free cash flow even though its direct-to-consumer segment realized a $50 million profit for the same period.
Following its streaming success, the New York-based company expects its streaming business to remain profitable in 2023. This forecast comes in a year ahead of expectations.
For Q1 2023, Warner Bros. Discovery raked in a revenue haul of $10.7 billion compared to the consensus estimate of $10.78 billion. In addition, the multinational mass media and entertainment conglomerate also sustained a loss per share of 44 cents versus 1 cent expected. Warner Bros. Discovery’s net loss for the first quarter came in at $1.1 billion, with an adjusted EBITDA of $2.6 billion.
Warner Bros. Discovery CEO Comments on Q1 2023 Earnings
In an earnings release, Warner Bros. Discovery President and Chief Executive Officer David Zaslav commented on the quarterly outing, saying:
“It is an important time for Warner Bros. Discovery. We’ve come through some major restructurings and have repositioned our businesses with greater precision and focus. And we see a number of positive proof points emerging, with DTC perhaps the most prominent.”
According to the CEO, the company’s “meaningful turn this quarter with $50 million in segment EBITDA and 1.6 million net adds” puts it on the right trajectory.
Zaslav concluded by saying:
“Even in today’s challenging marketplace, we are positioned to drive free cash flow and deleverage our balance sheet, and we remain confident in our ability and strategy to attain our financial targets.”
Warner Bros. Discovery is scheduled for a conference call today at 8:00 a.m. ET to discuss its quarterly results.
Warner Bros. Discovery executives took pride in the entertainment giant’s ability to reverse losses in its streaming operations. Like several media powerhouses, the company has switched its focus to streaming video following the increasing subscription cancellation of traditional pay TV. The media company ended Q1 with 97.6 million streaming subscribers. This number represents a sizable increase of 1.6 million subscribers from the preceding quarter.
Despite a fiercely competitive streaming space, Warner Bros. Discovery hopes to keep thriving for the foreseeable future. The company currently ties with the likes of Netflix (NASDAQ: NFLX), Disney (NYSE: DIS), and Apple (NASDAQ: AAPL) for streaming subscribers.
Warner Bros. Discovery Streaming Shakeups
Warner Bros. Discovery is onboarding Discovery+ content to HBO Max and relaunching the streamer as Max in the US later in the month. Zaslav has slashed content spending to spur efforts to make Warner Bros. Discovery’s streaming business profitable. The CEO’s cost-cutting measures include pulling dozens of films and television series from HBO Max. According to a spokesperson for the streaming platform, most of the affected shows are reality or kids and family content that did not resonate with large audiences.