Warner Bros Discovery’s Earnings Call Contradictions: HBO Max Subscriber Trends and 2027 Film Slate Signals Clash

Date of Call: Aug 6, 2026

Financials Results

• Revenue: Streaming segment delivered more than $3 billion in revenues for the first time ever.
• Operating Margin: Streaming generated a nearly 17% adjusted EBITDA margin.

Guidance:

• Expect momentum in streaming to continue with strong content pipeline in 2027.
• Long-term goal for studio segment remains to generate over $3 billion in adjusted EBITDA.
• Plan assumes a larger number of films in 2027 and beyond.
• Expect strong financial returns from diversified studio operations including ancillary revenue streams.
• Anticipate best year ever in terms of retention and lower churn in 2026.

Business Commentary:

Streaming Revenue and Growth:

• Warner Bros. Discovery's streaming segment delivered more than $3 billion in revenues for the first time in Q2 2026, with subscriber-related revenue growth accelerating 200 basis points sequentially to 10% ex FX.
• This growth was driven by strong engagement and subscriber trends, particularly fueled by the global recognition of HBO as a high-quality streaming service.

EBITDA Improvement:

• The streaming business generated $512 million in adjusted EBITDA, marking a more than 60% EBITDA improvement over the same period in 2025.
• This turnaround is attributed to the transformation of HBO from a predominantly U.S.-only service to a global high-growth asset, leveraging the cultural influence of HBO programming.

Content Pipeline and Emmy Recognition:

• HBO series such as "The Pit," "A Knight of the Seven Kingdoms," "House of the Dragon," and "Euphoria" have each averaged at least 25 million global viewers per episode, with several exceeding 30 million.
• The company's commitment to storytelling excellence is reflected in its leading the industry with 150 Emmy nominations, including HBO Max leading with 122 Emmy nominations.

Studio Segment Transformation:

• The studio segment, despite recent underperformance in films, has diversified across theatrical, television, licensing, games, experiences, retail, and consumer products, enhancing its resilience.
• Investments in ancillary areas like consumer products and a strategic focus on a balanced film slate are part of a long-term plan to achieve over $3 billion in adjusted EBITDA.

Network and Sports Performance:

• Warner Bros. Discovery's global networks demonstrated resilience with premium sports properties, including the highest-rated national championship basketball game on TNT Sports and a 50% viewership increase for the NHL playoffs.
• The quality and reliability of CNN's journalism also contributed to a 24% increase in linear viewership and a 19% increase in minutes spent across all CNN platforms.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted 'strong results,' 'great financial progress,' and 'positive engagement and subscriber trends.' They noted 'no question' about the long-term $3 billion EBITDA target for the studio and are 'confident' the Paramount Skydance transaction will close. The tone focused on resilience, growth, and a robust content pipeline.

Q&A:

• Question from Steven Cahall (Wells Fargo): Can you speak more to the scripted show pipeline on HBO and how to get back to $3 billion in studio EBITDA?
  Response: HBO has a strong pipeline including returning shows and new local content globally. For the studio, the long-term $3 billion EBITDA target is firm, supported by a diversified business model, upcoming film slate, and benefits from SVOD content replenishing the library.

• Question from Rich Greenfield (LightShed Partners): How many films are you making this year and next, and how long would a split take if the Paramount deal fails?
  Response: Making 14 films in 2026, ramping to 19 in 2027, with confidence in maintaining that output. The company is confident the Paramount deal will close.

• Question from Sean Diffley (Morgan Stanley): Comment on linear advertising trends and the licensing demand environment.
  Response: Licensing demand is healthy with strong margins. Linear ad decline was driven by NBA; underlying trends are mixed internationally due to caution and geopolitical factors, but HBO Max growth is countering declines in some markets.

• Question from Jessica Reif Ehrlich (Bank of America): How do you maintain focus amid deal delays, any change in DC strategy, and what have you seen from bundling?
  Response: Company culture and focus remain strong on driving performance. DC strategy is robust with upcoming projects. Bundles are benefiting subscriber acquisition and retention, with lower churn and high confidence in best-ever retention for 2026.

Contradiction Point 1

HBO Max Subscriber Growth Trajectory

Inconsistent portrayal of HBO Max's subscriber growth trend.

Steven Cahall (Wells Fargo) - Steven Cahall (Wells Fargo)

2026Q2: Growth of HBO Max is countering declines in certain markets. - Gunnar Wiedenfels(CFO)

What is the status of HBO's scripted show pipeline for 2027, particularly regarding the conclusion of major series and the introduction of new IP to drive growth? - Rich Greenfield (LightShed Partners)

2026Q1: Subscriber growth, engagement, and churn metrics are at their best in four years. - J.B. Perrette(COO)

Contradiction Point 2

Linear Networks' Strategic Importance

Contradiction on the focus and financial outlook for traditional linear networks.

Steven Cahall (Wells Fargo) - Steven Cahall (Wells Fargo)

2026Q2: Underlying linear advertising... internationally, Q2 was weaker than Q1, and a mixed picture persists into early Q3... - Gunnar Wiedenfels(CFO)

What is HBO's 2027 scripted show pipeline, particularly regarding upcoming series conclusions and new IP shows aimed at driving growth? - Rich Greenfield (LightShed Partners)

2026Q1: On linear networks... WBD can help by providing great programming. - David Zaslav(CEO)

Contradiction Point 3

Bundling Strategy and Benefits

Mixed messaging on the proven benefits and strategic confidence in bundling.

Steven Cahall (Wells Fargo) - Steven Cahall (Wells Fargo)

2026Q2: Bundles... are believing in their power, showing benefits in subscriber acquisition and improved churn. - David Zaslav(CEO)

What is HBO's scripted show pipeline for 2027, particularly as major series conclude and new IP shows are introduced to drive growth? - Rich Greenfield (LightShed Partners)

2026Q1: The industry is moving toward fewer, better consumer experiences (bundling). Disney’s bundle reduced churn and improved economics. - David Zaslav(CEO)

Contradiction Point 4

2027 Film Slate Quality and Output Commitment

Contradiction on the strength and readiness of the 2027 film slate.

Rich Greenfield (LightShed Partners) - Rich Greenfield (LightShed Partners)

2026Q2: The 2027 film slate with more tentpole IP is expected to help... The company is making 14 films in 2026, ramping up to 19 in 2027... They are confident in maintaining this larger output. - Gunnar Wiedenfels(CFO) and David Zaslav(CEO)

How does the number of films planned for 2026 compare to 2027, and what is the confidence level in sustaining theatrical output? - Robert Fishman (MoffettNathanson LLC)

2025Q4: The 2027 film slate is highlighted as stunning, with major tentpoles like *Godzilla vs. Kong 3*, *Superman*, *Man of Tomorrow*, *Minecraft 2*, and *Lord of the Rings: Hunt for Gollum*. - David Zaslav(CEO)

Contradiction Point 5

International Content Strategy and Local Investment Needs

Contradiction on the necessity of investing in local international content.

What were Steven Cahall's key insights from Wells Fargo's earnings call? - Steven Cahall (Wells Fargo)

2026Q2: A strong pipeline of international local content is also being developed. - David Zaslav(CEO) and JB Perrette(COO)

Can you provide details on HBO's scripted show pipeline for 2027, particularly as major series conclude, and highlight any new IP shows expected to drive growth? - Peter Supino (Wolfe Research, LLC)

2025Q4: The global content strategy leverages established IP to drive engagement and ARPU effectively. ... No major step change in local content spending required. - Jean-Briac Perrette(COO)