Warner Bros. Discovery(WBD)2025-02-27 15:46Financial Data and Key Metrics Changes - The direct-to-consumer business ended 2024 with approximately 117 million subscribers, having added about 6.5 million subscribers in Q4 and nearly 20 million in less than a year [9] - Direct-to-consumer EBITDA reached almost 3 billion improvement over two years, with expectations to nearly double in 2025 [11] - The company aims for at least 150 million subscribers by the end of 2026, which will drive further revenue and EBITDA growth [10] Business Line Data and Key Metrics Changes - Warner Bros' television business is showing growth and strength, with multi-year renewal agreements with major pay TV providers in the U.S. [12] - The restructuring announced in December aims to provide better visibility into the strength of the streaming and studios business [13] Market Data and Key Metrics Changes - The company is experiencing positive net revenue impacts from international affiliate renewals, indicating growth in the international market [25] - The domestic affiliate business saw close to 6% rate increases in Q4, but future rate increases are expected to be in the low single digits [24] Company Strategy and Development Direction - The company is focused on enhancing shareholder value and positioning itself as a global media leader [14] - There is an emphasis on bundling strategies with regional players to enhance content offerings and consumer experience [44][46] - The company is exploring opportunities for consolidation in the industry, particularly with local players aligning with its strategy [43] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the linear television market but remains optimistic about the long-term growth potential of the streaming business [12][14] - The company is committed to improving free cash flow and reducing debt, having paid down 19 billion since the transaction closure [64] Other Important Information - The company is not providing consolidated financial guidance for the year but expects significant improvements in EBITDA across its segments [49][51] - The international market is showing better trends compared to the domestic market, with moderate pressures anticipated [56] Q&A Session Summary Question: Update on restructuring and linear pressure - Management confirmed progress on restructuring and expects to provide more clarity on segment reporting in the upcoming earnings report [20][22] Question: Scale in DTC and programming diversity - Management believes Max has a unique offering with a strong content library and is focused on quality storytelling [33] Question: Asset landscape and consolidation opportunities - Management sees potential for consolidation in the industry and is open to discussions with regional players [43][44] Question: Free cash flow and balance sheet outlook - Management emphasized the importance of free cash flow and plans to continue reducing net debt while focusing on content investments [65] Question: Sports costs and future savings - Management anticipates several hundred million dollars in sports expense savings in 2026 compared to 2025 [77] Question: DTC subscriber growth and ARPU pressures - Management expects a significant portion of subscriber growth to come from international markets, with some near-term ARPU pressure anticipated [84][86] Question: Long-term goals for networks and studios - Management aims to stabilize network revenues and achieve 3 billion in studio EBITDA, with confidence in future profitability [90][99]