Warner Bros. Discovery(WBD) - 2024 Q3 - Quarterly Results

Financial Performance - Q3 2024 total revenues were $9.6 billion, a 3$0.1 billion, including $1.6 billion of pre-tax acquisition-related amortization and restructuring expenses[3]. - Q3 total Adjusted EBITDA was$2.4 billion, an 18% decrease compared to the prior year quarter[3]. - Total revenues for Q3 2024 were $9,623 million, a decrease of 4$9,979 million in Q3 2023[34]. - Operating income for Q3 2024 was $281 million, compared to$97 million in Q3 2023, indicating a significant improvement[34]. - Net income available to Warner Bros. Discovery, Inc. was $135 million in Q3 2024, a recovery from a net loss of$417 million in Q3 2023[34]. - The company reported a net loss of $10,842 million for the nine months ended September 30, 2024, compared to a net loss of$2,687 million for the same period in 2023[36]. - Adjusted EBITDA for Q3 2024 was $2,413 million, down from$2,969 million in Q3 2023, representing a decrease of 19%[40]. Subscriber Growth and Direct-to-Consumer (DTC) Performance - Global Direct-to-Consumer (DTC) subscribers reached 110.5 million, with an increase of 7.2 million subscribers in Q3, marking the largest quarterly growth since the launch of Max[3][16]. - Total DTC subscribers reached 110.5 million, up from 103.3 million in the previous quarter[20]. - DTC revenues increased 9% ex-FX to $2,634 million compared to the prior year quarter[15][16]. - DTC Adjusted EBITDA reached$289 million, a $178 million increase year-over-year, despite a$41 million loss from the broadcast of the Olympics in Europe[19]. - Global DTC ARPU increased by 1% ex-FX to $7.84, supported by domestic ad-tier subscriber growth and higher pricing[17]. Revenue Breakdown - Studios revenues decreased 17$2,680 million compared to the prior year quarter[6][7]. - Content revenue decreased 18% ex-FX, with theatrical revenue down 40% ex-FX due to lower box office performance[7][8]. - Networks revenues increased 3% ex-FX to $5,010 million compared to the prior year quarter[13]. - Distribution revenue increased by 8$2,598 million, a decline of 8% from $2,833 million in Q3 2023[37]. - Content revenue decreased by 11$2,345 million, with SG&A increasing by 27% ex-FX due to higher overhead and marketing expenses[18]. - Total operating expenses for Q3 2024 were $2,895 million, a 17$2,472 million in Q3 2023[38]. - Cost of revenues for Q3 2024 was $2,185 million, up 21$1,800 million in Q3 2023[38]. - Free cash flow decreased by 69% to $632 million from$2,059 million, primarily due to higher net content investment and lower operating profits[26]. - The company experienced a cash outflow from operating activities of $2,660 million for the nine months ended September 30, 2024, down from$3,899 million in the same period of 2023[36]. Debt and Leverage - As of September 30, 2024, the company had $3.5 billion in cash and$40.7 billion in gross debt, with a net leverage ratio of 4.2x[24]. - The company repaid or repurchased $0.9 billion of debt in Q3 2024[24]. - Gross debt is reported at$40.7 billion, which includes total debt of $40.2 billion and finance leases of$452 million[47]. - Net leverage is calculated as net debt of $37.2 billion divided by the last four quarters' Adjusted EBITDA of$8,781 million, resulting in a net leverage ratio of approximately 4.23[48]. Assets and Liabilities - Total assets decreased to $106,333 million as of September 30, 2024, down from$122,757 million at the end of 2023[35]. - Cash and cash equivalents at the end of Q3 2024 were $3,490 million, compared to$2,430 million at the end of Q3 2023[36]. - Total liabilities decreased to $70,159 million as of September 30, 2024, down from$76,285 million at the end of 2023[35]. Strategic Initiatives - Warner Bros. Discovery announced a multi-year renewal of the Charter carriage agreement, enhancing the distribution of Max across Spectrum TV Select packages[1]. - The company aims to enhance its market position through strategic investments and potential acquisitions, focusing on expanding its direct-to-consumer offerings[50].