Warner Bros. Discovery CFO's MoffettNathanson Presentation: A Turning Point for WBD?

Warner Bros. Discovery (WBD) Chief Financial Officer Gunnar Wiedenfels is set to take the stage at the MoffettNathanson 2025 Media, Internet & Communications Conference on May 15 in New York. The event provides a critical opportunity for Wiedenfels to address investors on the company’s financial trajectory and strategic pivots amid a turbulent year of losses, restructuring, and high-stakes bets on streaming and premium content.

Q1 2025: Mixed Results, but Signs of Strategic Shifts

Warner Bros. Discovery’s first quarter of 2025 painted a complex picture. The company reported a net loss of $453 million, a significant improvement from the prior year’s $1 billion loss, but still fell short of expectations. Revenue dipped to $8.98 billion, missing estimates by over $600 million. However, the streaming division offered a bright spot: 5.3 million new global subscribers boosted the total to 122 million, while streaming revenue rose 8% to $2.7 billion, with adjusted EBITDA hitting $339 million—a 296% jump from Q1 2024.

The studio division, meanwhile, faced a rocky start to the year. Studio revenue dropped 18% to $2.3 billion, partly due to flops like Mickey 17 and the shuttering of video game studios. Yet, Q2 2025 brought a dramatic rebound, driven by blockbusters like A Minecraft Movie ($875 million global box office) and Sinners ($250 million+). Wiedenfels has emphasized that 2025’s second quarter could offset Q1’s struggles, signaling a potential turning point for the studio’s financial health.

Strategic Restructuring and the Spin-Off Debate

The company’s broader strategy is centered on streamlining operations to prioritize high-margin segments. In late 2024, WBD reorganized into two divisions: one focused on streaming (HBO Max, Discovery+) and film/TV studios, and another housing its struggling cable networks (CNN, HGTV). This split has fueled speculation about a potential spin-off of the cable division, akin to NBCUniversal’s planned Versant spin-off.

Analysts and investors have largely cheered the move. WBD’s stock rose 5% in April 2025 after spin-off rumors surfaced, though CEO David Zaslav has avoided confirming the plan. CFO Wiedenfels will likely address this during his presentation, as investors seek clarity on how separating legacy linear TV—whose revenue fell 7% to $4.8 billion—could unlock value and reduce drag on the company’s growth-oriented businesses.

Content Strategy: Quality Over Quantity

Under Zaslav’s leadership, WBD has shifted focus to high-quality, franchise-driven content—a move that aligns with HBO’s prestige TV legacy and Warner Bros.’s storied film history. This pivot is reflected in hits like The Last of Us (Max) and The White Lotus (HBO), which fueled streaming subscriber growth.

The strategy also involves reducing costs in unprofitable areas, such as sports rights. Zaslav famously declined to renew NBA rights for TNT, calling sports a “rental business” unworthy of premium investments. While this decision risks alienating sports fans, it aligns with Wiedenfels’ cost-cutting goals.

Streaming Ambitions and Global Expansion

WBD aims to surpass 150 million global streaming subscribers by late 2026, relying on content like The White Lotus and The Pitt to drive growth. The company is also doubling down on ad-supported streaming, which saw 35% ad revenue growth in Q1. However, challenges persist in Asia, where content localization and competition with local platforms like Netflix and Disney+ remain hurdles.

Risks and Uncertainties

Despite progress, WBD faces significant risks. The cable division’s declining ad sales—11% drop in global linear advertising—highlight the vulnerability of traditional TV. Additionally, $300 million in sports rights costs in 2025 (due to overlapping old and new contracts) could strain margins. Macroeconomic pressures, including advertising volatility, also loom large.

Investors will also scrutinize Wiedenfels’ targets: $1.3 billion in streaming EBITDA by 2025 and $3 billion in studio EBITDA, which rely on hits like The Lord of the Rings: The Rings of Power Season 2 and Sinners to sustain momentum.

Conclusion: A Company at a Crossroads

Warner Bros. Discovery’s path forward hinges on executing its two-pillar strategy:
1. Streaming dominance: Achieving 150 million subscribers and $1.3 billion EBITDA by leveraging IP-driven content and ad revenue growth.
2. Cost discipline and asset optimization: Spinning off the cable division, shuttering underperforming divisions, and avoiding costly sports bets.

The company’s Q2 recovery in film revenue and streaming’s EBITDA jump suggest progress, but the road remains rocky. With a net loss still at $453 million in Q1, WBD must prove it can sustain profitability while navigating a fragmented media landscape.

Investors should watch for Wiedenfels’ clarity on:
- The cable division’s future and its impact on valuation.
- Studio EBITDA targets and content pipeline execution.
- Ad revenue trends across streaming and linear TV.

If WBD can deliver on these fronts, its stock—currently trading at $18.50 (down 25% from its 2023 high)—could regain momentum. Failure to do so risks further underperformance in a sector where only the most agile survive.

In short, the MoffettNathanson presentation is a pivotal moment for WBD. The CFO’s ability to convince investors that the company’s restructuring and strategic bets will pay off could determine whether 2025 marks the start of a revival—or another chapter in its struggles.