WBD Q1 results: Global DTC subscribers up to 97.6 million

Warner Bros. Discovery, Inc. reported its financial results for the quarter ended March 31, 2023. The company reported total revenues of $10,700 million for Q1, a decrease of 5% ex-FX, or a decrease of 3% ex-FX excluding the impact of the 2022 Winter Olympic Games, compared to the prior year quarter, on a combined basis.
The net loss available to Warner Bros. Discovery, Inc. was $(1,069) million, including $1,810 million of pre-tax amortization from acquisition-related intangible assets and $95 million of pre-tax restructuring expenses. Q1 total Adjusted EBITDA was $2,611 million, which increased by 12% ex-FX compared to the prior year quarter, on a combined basis.
The company ended Q1 with $2.6 billion of cash on hand, $49.5 billion of gross debt, and 5.0x net leverage. Additionally, global DTC subscribers increased by 1.6 million to 97.6 million at the end of Q1 versus 96.1 million subscribers at the end of Q4.
In Q1, Warner Bros. Discovery, Inc. was the #1 most-watched Total TV linear portfolio among P25-54 viewers, driven by the broadcast of the NCAA March Madness tournament, and had 6 of the top 10 cable networks in Prime. The company also celebrated CNN’s first-ever Oscar® with Navalny winning best documentary feature film.
Furthermore, the Q1 launch of Hogwarts Legacy was the largest release of all time for Warner Bros. Games and is the best-selling game year-to-date with over $1 billion in retail sales.
However, Q1 cash provided by operating activities was $(631) million, which includes $836 million of semi-annual interest payments largely attributable to merger-related debt. Reported free cash flow was $(930) million.
David Zaslav, President and Chief Executive Officer of Warner Bros. Discovery, said: “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. We made a meaningful turn this quarter with $50 million in segment EBITDA and 1.6 million net adds, and we feel great about the trajectory we are on. In fact, we now expect our U.S. DTC business to be profitable for 2023 – a year ahead of our guidance. 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 strategy and ability to achieve our financial targets.”
Despite the challenges, the company remains optimistic about the future and continues to invest in high-quality content and innovative technologies to provide the best entertainment experiences to its global audience.