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- **Box Office Dominance**: Warner Bros. leads global box office with $4 billion in 2025 revenue, driven by Superman, The Conjuring, and One Battle After Another. Studio EBITDA expected to exceed $2.4 billion in 2025, targeting $3 billion by 2026.
- **HBO Max Growth**: 150 million global subscribers by end-2026, with Q3 series like Task and Gilded Age averaging 10 million weekly viewers. Unique value proposition combines films, originals, and local sports/content.
- **Sports Strategy Shift**: U.S. standalone sports app focuses on non-rental content; international sports bundled with local content. $300 million annual savings from NBA rights exit.
- **Library Monetization**: Shift from licensing to internal use boosts margins; 100,000+ hour library includes exclusive HBO Max titles like The Wire.
- **ARPU Outlook**: U.S. ARPU faces short-term pressure but set to grow in late 2026. International ARPU growth from ad-supported tier expansion and price increases.

**【CEO Summary Section】**
- Warner Bros. Discovery is now the global leader in motion pictures, with $4 billion in 2025 box office revenue, driven by hits like Superman, The Conjuring: Last Rites, and One Battle After Another. The studio is on track to exceed $2.4 billion in EBITDA this year and aims for $3 billion by 2026.
- HBO Max has expanded to over 100 countries, adding 30 million subscribers in 3 years, and will reach 150 million global subscribers by end-2026. The platform's unique value proposition combines Warner Bros. films, HBO originals, and local sports/content, with 2025 Q3 series like Task and Gilded Age averaging 10 million weekly viewers.
- The company is investing in AI and original content, with upcoming projects like the Gremlins reboot (2027) and a decade-long Harry Potter franchise expansion.

**【CFO Financial Commentary】**
- The company reduced sports rights costs by $300 million annually by transitioning away from NBA rights, and will launch a standalone sports streaming app in the U.S. in 2026. This app will complement HBO Max's global sports strategy, which includes local sports partnerships in Europe and Latin America.
- The library monetization strategy has shifted from licensing to internal use, eliminating $5 billion in intercompany profits and driving higher margins. The library now includes over 100,000 hours of content, with titles like The Wire and Game of Thrones exclusive to HBO Max.
- Debt reduction efforts have lowered net leverage to 3.3x EBITDA, with $1 billion paid down in Q3 2025.

**【Q&A Key Highlights】**
- **Library Utilization**: HBO Max will continue accessing Discovery Global Networks' library (e.g., CNN, TLC, HGTV) post-separation, with a focus on monetizing the library through premium pricing rather than licensing. The platform will add thousands of hours annually from free-to-air channels outside the U.S.
- **Sports Strategy**: The U.S. sports app will focus on non-rental sports content to avoid cannibalizing HBO Max's core storytelling business. Internationally, sports will be bundled with local content to drive growth. The company sees opportunities to acquire sports rights over the next 3-5 years.
- **ARPU Trends**: U.S. ARPU will face short-term pressure due to affiliate rate resets, but is expected to return to growth in late 2026. Internationally, ARPU growth will come from ad-supported tier expansion and price increases. Password sharing enforcement will also contribute to ARPU improvement.
- **Content Spending**: The studio balances franchise sequels (e.g., DC, Harry Potter) with new IP, with a focus on high-margin originals like The Pitt and The Penguin. The TV studio won 14 Emmys in 2025, including for The Pitt and The Penguin.

Warner Bros. Discovery, Inc. (WBD) Q3 2025 Earnings Call Transcript

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