Warner Bros. Discovery, Inc. (WBD)

ITEM 1. Business.

For convenience, the terms “Warner Bros. Discovery”, “WBD”, the “Company,” “we,” “us” or “our” are used in this Annual Report on Form 10-K to refer to both Warner Bros. Discovery, Inc. and collectively to Warner Bros. Discovery, Inc. and one or more of its consolidated subsidiaries, unless the context otherwise requires.

Industry Trends

Headwinds in the industry, such as continued pressures on linear distribution and declines in linear subscribers and continued softness in the U.S. linear advertising market, have had, and are expected to continue to have, a material impact on the operations and results of the Company, including a negative impact on the results of operations attributed to declines in linear advertising revenue. The increase of digital advertising inventory available in the marketplace has also resulted in, and is expected to continue to result in, increased competition for advertising expenditures for both traditional linear networks and ad-supported tiers in streaming services. In addition, the imposition of tariffs by the U.S. government and any retaliatory tariffs from foreign governments, including tariffs directly or indirectly applicable to our industry, may negatively impact our operations and results, including by leading to higher productions costs or decreased spending by advertisers whose expenditures are sensitive to such actions or to general economic conditions. We continue to closely monitor the ongoing impact of industry trends to our business; however, the full effects on our operations and results will depend on future developments, which are highly uncertain and cannot be predicted.

Description of Business

Warner Bros. Discovery is a leading global media and entertainment company that creates and distributes a differentiated and comprehensive portfolio of content and products across television, film, streaming, interactive gaming, publishing, themed experiences, and consumer products through brands including: Discovery Channel, HBO Max, CNN, DC Studios, TNT Sports, HBO, Food Network, TLC, TBS, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Games, Adult Swim, Turner Classic Movies, and others.

We are home to one of the largest collections of owned content in the world with assets and intellectual property across sports, news, lifestyle, and entertainment in most languages and regions of the globe. We create some of the best-in-class content using our renowned library, beloved franchises, and acclaimed creative expertise to serve our audiences and consumers. Our asset mix strongly positions us to execute our key strategies: grow our streaming business globally, enhance our Studios segment, and manage our linear networks for the best possible success in order to create long-term value for our shareholders.

We generate revenue from fees charged to distributors that carry our network brands and programming, including cable, direct-to-home (“DTH”) satellite, telecommunication and digital service providers, as well as through direct-to-consumer (“DTC”) subscription services (distribution revenue); the sale of advertising on our networks and digital platforms (advertising revenue); the release of feature films for initial exhibition in theaters, the licensing of feature films and television programs to various television, subscription video on demand (“SVOD”) and other digital markets, distribution of feature films and television programs in the physical and digital home entertainment markets, sales of console games and mobile in-game content, sublicensing of sports rights, and licensing of intellectual property such as characters and brands (content revenue); and other sources such as studio tours and production services (other revenue).

In the first quarter of 2025, the Company renamed its DTC reportable segment to Streaming and its Networks reportable segment to Global Linear Networks.

In June 2025, the Company announced its plans to separate the Company into two publicly traded companies, Warner Bros. and Discovery Global, and in October 2025, the Company announced that the board of directors would evaluate a broad range of strategic options, including continuing to advance the separation of the Company, a transaction for the entire company or separate transactions for Warner Bros. and/or Discovery Global, as well as an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global.

Termination of Netflix Merger

In January 2026, the Company entered into an amended and restated agreement and plan of merger, by and among the Company, Netflix, Inc. (“Netflix”), Nightingale Sub, Inc., a wholly owned subsidiary of Netflix, and New Topco 25, Inc., a wholly owned subsidiary of WBD (the “Netflix Merger Agreement”), under which Netflix would have acquired the Streaming and Studios segments (subject to certain deviations) and certain other assets and liabilities, including the Company’s film and television studios, HBO Max, and HBO, following the separation and distribution of Discovery Global to the Company’s stockholders (the “Separation Transaction”).

Following the board of directors’ determination that it had received a “Company Superior Proposal,” as defined in the Netflix Merger Agreement, from PSKY and Netflix’s waiver of its right to propose revisions to the Netflix Merger Agreement, on February 27, 2026, in accordance with the terms of the Netflix Merger Agreement, the Company terminated the Netflix Merger Agreement in connection with entering into the PSKY Merger Agreement (as defined below). In connection with the termination of the Netflix Merger Agreement, PSKY, on behalf of the Company, paid Netflix a termination fee of $2.8 billion in cash (the “Netflix Termination Fee”) as required by the terms of the Netflix Merger Agreement.

PSKY Merger

On February 27, 2026, the Company entered into an agreement and plan of merger, by and among the Company, PSKY and Prince Sub Inc., a wholly owned subsidiary of PSKY (“Merger Sub”) (as may be amended from time to time, the “PSKY Merger Agreement”), pursuant to which and subject to the terms and conditions therein, at the effective time, Merger Sub will merge with and into WBD, with WBD surviving as a wholly owned subsidiary of PSKY.

Upon completion of the PSKY Merger, each issued and outstanding share of WBD common stock (subject to certain exceptions) will be converted into the right to receive an amount in cash equal to $31.00, without interest, plus, if the closing date of the PSKY Merger occurs after September 30, 2026, the Ticking Consideration (the “Merger Consideration”). The “Ticking Consideration” will be an amount in cash equal to $0.00277778 multiplied by the number of calendar days elapsed after September 30, 2026 to and including the closing date (which, for the avoidance of doubt, will not exceed $0.25 per 90 calendar day period).

Concurrently with the execution of the PSKY Merger Agreement, Larry J. Ellison and an associated trust entered into a guarantee in favor of WBD to, among other things, jointly and severally guarantee certain payments by PSKY under the PSKY Merger Agreement, including $45.72 billion of the Merger Consideration, and assist WBD with the consummation of the PSKY Merger.

The completion of the PSKY Merger is subject to the receipt of required regulatory approvals, the approval of WBD shareholders and other customary closing conditions. In addition, PSKY’s obligation to consummate the PSKY Merger is subject to WBD not having completed the separation of its Streaming & Studios business from its Global Linear Networks business nor having declared or made any dividend to WBD’s stockholders to effectuate the separation. There can be no assurance that the PSKY Merger will occur in accordance with the expected plans or anticipated timeline, or at all.

The PSKY Merger Agreement contains certain customary termination rights for WBD and PSKY, including, without limitation, a right for either party to terminate if the PSKY Merger is not completed on or before March 4, 2027, subject to an extension to June 4, 2027 specified in the PSKY Merger Agreement. Termination under specified circumstances will require WBD to pay PSKY a termination fee of $3.0 billion and reimburse PSKY for (i) any payment made by PSKY, which will in no event be more than $1,528 million, in connection with WBD’s obligation to complete the Junior Lien Exchange Offer (as defined herein) by December 30, 2026 and (ii) the Netflix Termination Fee, or PSKY to pay WBD a termination fee of $7.0 billion.

Reportable Segments

There have been no changes to the Company’s reportable segments or the composition of the Company’s reportable segments as a result of these actions. Any differences in the composition of our reportable segments as a result of the previously proposed Separation Transaction have not been reflected as our chief operating decision maker (“CODM”), the Chief Executive Officer (“CEO”), has not implemented any corresponding changes to the way our business was managed through December 31, 2025.

We have included supplemental Streaming & Studios and Global Linear Networks division information and supplemental consolidating data in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K.

As of December 31, 2025, we classified our operations in three reportable segments:

•Streaming - Our Streaming segment primarily consists of our premium pay-TV and streaming services.

•Studios - Our Studios segment primarily consists of the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to third parties and our networks/streaming services, distribution of our films and television programs to various third party and internal television and streaming services, distribution through the home entertainment market (physical and digital), related consumer products and themed experience licensing, and interactive gaming.

•Global Linear Networks - Our Global Linear Networks segment primarily consists of our domestic and international television networks.

Our segment presentation aligns with our management structure and the financial information management uses to make decisions about operating matters, such as the allocation of resources and business performance assessments. Financial information for our segments and the geographical areas in which we do business is set forth in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 23 to the consolidated financial statements included in Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

Streaming

WBD’s Streaming segment includes our streaming services, such as HBO Max and discovery+, premium pay-TV services, such as HBO, and certain premium sports streaming products. Our streaming services are available on most mobile and connected TV devices. As of December 31, 2025, we had 131.6 million Streaming subscribers1. Our strong subscriber growth this year has driven increased revenue and profitability for the Streaming segment. In January 2026, HBO Max was launched in Germany and Italy, and we anticipate launching in the UK in March 2026.

HBO is one of the most respected and innovative entertainment brands in the world, serving iconic, award-winning programming through the HBO linear channels and our DTC streaming service, HBO Max. In 2025, HBO’s crime drama The Penguin earned Colin Farrell a Golden Globe Award in the category for Best Performance by a Male Actor in a Limited Series, Anthology Series, or a Motion Picture Made for Television, and the series garnered nine wins at the 77th Emmy Awards. Other Emmy standouts were Hacks and the new HBO Max series The Pitt. The Pitt concluded its freshman season with a 13-week streak of week-over-week growth – with every episode since its two-part premiere on January 9, 2025 outperforming the last. The medical drama, produced by Warner Bros. Television, received five Emmy Awards including Outstanding Drama series and is renewed for a third season. Other hit HBO series that returned to critical acclaim in 2025 included The White Lotus, The Gilded Age, and The Last of Us.

HBO Max is a streaming destination for a variety of programming including HBO Originals, Warner Bros. films, HBO Max Originals, the DC universe, the Wizarding World of Harry Potter, CNN, and programming across food, home, reality, lifestyle, and documentaries from leading brands like HGTV, Food Network, Discovery Channel, and more. Our strategy to grow our Streaming business globally delivered success in 2025 with HBO Max’s expansion hitting over 100 markets including Latin America, the Caribbean, Europe, Australia, and Asia and the addition of 14.7 million global subscribers to our Streaming products.

In 2025, our content pipeline for HBO and HBO Max included the highly anticipated returns of The White Lotus, The Last of Us, Hacks, ...And Just Like That, Peacemaker, and The Gilded Age, as well as the series premieres of It: Welcome to Derry and Task. Notable new series slated for 2026 include the Game of Thrones prequel, A Knight of the Seven Kingdoms, the dark comedy miniseries DTF St. Louis starring David Harbour and Jason Bateman, and the HBO Original comedy series Rooster, from co-showrunners and executive producers Bill Lawrence and Matt Tarses and stars Steve Carell, who also serves as executive producer. Hit series returning in 2026 include House of the Dragon, Euphoria, The Pitt, and Hacks.

discovery+ is WBD’s non-fiction, real-life subscription-based streaming service. discovery+ features a wide range of series across popular passion verticals, including lifestyle and relationships; home and food; true crime; paranormal; adventure and natural history; science, tech, and the environment; and a slate of high-quality documentaries.

HBO Max and discovery+ currently feature both ad-free and ad-lite versions in most markets.

1 Streaming subscriber

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-05-06 (period ending 2026-03-31).

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s discussion and analysis of financial condition and results of operations is a supplement to and should be read in conjunction with the accompanying consolidated financial statements and related notes. This section provides additional information regarding our businesses, current developments, results of operations, cash flows and financial condition. Additional context can also be found in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”).

BUSINESS OVERVIEW

In the first quarter of 2025, the Company renamed its DTC reportable segment to Streaming and its Networks reportable segment to Global Linear Networks.

Termination of Netflix Merger

On January 19, 2026, the Company entered into an amended and restated agreement and plan of merger, by and among the Company, Netflix, Inc. (“Netflix”), Nightingale Sub, Inc., a wholly owned subsidiary of Netflix, and New Topco 25, Inc., a wholly owned subsidiary of WBD (the “Netflix Merger Agreement”), pursuant to which Netflix would have acquired the Streaming and Studios segments (subject to certain deviations) and certain other assets and liabilities, including the Company’s film and television studios, HBO Max, and HBO, following the separation and distribution of Discovery Global to the Company’s stockholders (the “Separation Transaction”).

Following the board of directors’ determination that it had received a “Company Superior Proposal,” as defined in the Netflix Merger Agreement, from Paramount Skydance Corporation (“PSKY”) and Netflix’s waiver of its right to propose revisions to the Netflix Merger Agreement, on February 27, 2026, in accordance with the terms of the Netflix Merger Agreement, the Company terminated the Netflix Merger Agreement in connection with entering into the PSKY Merger Agreement (as defined below). As a result of the termination of the Netflix Merger Agreement, PSKY, on behalf of the Company, paid Netflix a termination fee of $2.8 billion in cash (the “Netflix Termination Fee”) as required by the terms of the Netflix Merger Agreement. During the three months ended March 31, 2026, the Company recorded an expense for the Netflix Termination Fee in the consolidated statements of operations. The amount paid by PSKY is reimbursable by the Company to PSKY in certain circumstances in the event the PSKY Merger Agreement is terminated, and therefore has been recorded in accrued liabilities in the consolidated balance sheets.

PSKY Merger

On February 27, 2026, the Company entered into an Agreement and Plan of Merger, by and among the Company, PSKY and Prince Sub Inc., a wholly owned subsidiary of PSKY (“Merger Sub”) (as may be amended from time to time, the “PSKY Merger Agreement”), pursuant to which and subject to the terms and conditions therein, at the effective time, Merger Sub will merge with and into WBD, with WBD surviving as a wholly owned subsidiary of PSKY (the “PSKY Merger”).

Upon completion of the PSKY Merger, each issued and outstanding share of WBD’s Series A common stock (“WBD Common Stock”) (subject to certain exceptions) will be converted into the right to receive an amount in cash equal to $31.00, without interest, plus, if the closing date of the PSKY Merger occurs after September 30, 2026, the Ticking Consideration (together, the “Merger Consideration”). The “Ticking Consideration” will be an amount in cash equal to $0.00277778 multiplied by the number of calendar days elapsed after September 30, 2026 to and including the closing date (which, for the avoidance of doubt, will not exceed $0.25 per 90 calendar day period).

Concurrently with the execution of the PSKY Merger Agreement, Larry J. Ellison and an affiliated trust entered into a guarantee in favor of WBD to, among other things, jointly and severally guarantee certain payments by PSKY under the PSKY Merger Agreement, including $45.72 billion of the aggregate Merger Consideration, and assist WBD with the consummation of the PSKY Merger.

On April 23, 2026, WBD stockholders approved the adoption of the PSKY Merger Agreement. The completion of the PSKY Merger is subject to customary closing conditions, including regulatory clearances. In addition, PSKY’s obligation to consummate the PSKY Merger is subject to WBD not having completed the separation of its Streaming & Studios business from its Global Linear Networks business nor having declared or made any dividend to WBD’s stockholders to effectuate the separation. There can be no assurance that the PSKY Merger will occur in accordance with the expected plans or anticipated timeline, or at all.

The PSKY Merger Agreement contains certain customary termination rights for WBD and PSKY, including, without limitation, a right for either party to terminate if the PSKY Merger is not completed on or before March 4, 2027, subject to an extension to June 4, 2027 in certain circumstances as specified in the PSKY Merger Agreement. Termination under specified circumstances will require WBD to pay PSKY a termination fee of $3.0 billion and reimburse PSKY for (i) any payment made by PSKY, which will in no event be more than $1,528 million, in connection with WBD’s obligation to complete the Junior Lien Exchange Offer by December 30, 2026 and (ii) the Netflix Termination Fee, or PSKY to pay WBD a termination fee of $7.0 billion. Additionally, the PSKY Merger Agreement provides for customary pre-closing covenants of WBD, including covenants relating to conducting its business in the ordinary course consistent with past practice and to refrain from taking certain actions without PSKY’s consent.

Reportable Segments

As of March 31, 2026, we classified our operations in three reportable segments:

•Streaming - Our Streaming segment primarily consists of our premium pay-TV and streaming services.

•Global Linear Networks - Our Global Linear Networks segment primarily consists of our domestic and international television networks.

Our segment presentation is aligned with our management structure and the financial information management uses to make decisions about operating matters, such as the allocation of resources and business performance assessments.

INDUSTRY TRENDS

RESULTS OF OPERATIONS

Foreign Exchange Impacting Comparability

The impact of exchange rates on our business is an important factor in understanding period-to-period comparisons of our results. For example, our international revenues are favorably impacted as the U.S. dollar weakens relative to other foreign currencies and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies. We believe the presentation of results on a constant currency basis (“ex-FX”), in addition to results reported in accordance with U.S. GAAP provides useful information about our operating performance because the presentation ex-FX excludes the effects of foreign currency volatility and highlights our core operating results. The presentation of results on a constant currency basis should be considered in addition to, but not a substitute for, measures of financial performance reported in accordance with U.S. GAAP.

The ex-FX change represents the percentage change on a period-over-period basis adjusted for foreign currency impacts. The ex-FX change is calculated as the difference between the current year amounts translated at a baseline rate, which is a spot rate for each of our currencies determined early in the fiscal year as part of our forecasting process (the “2026 Baseline Rate”), and the prior year amounts translated at the same 2026 Baseline Rate. In addition, consistent with the assumption of a constant currency environment, our ex-FX results exclude the impact of our foreign currency hedging activities, as well as realized and unrealized foreign currency transaction gains and losses. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies.

Consolidated Results of Operations

The table below presents our consolidated results of operations (in millions).

	Three Months Ended March 31,
	2026		2025			% Change	% Change (ex-FX)
Revenues:
Distribution	$	4,906		$	4,886			—	%	(1)	%
Advertising	1,847			1,980				(7)	%	(8)	%
Content	1,887			1,866				1	%	(2)	%
Other	253			247				2	%	(1)	%
Total revenues	8,893			8,979				(1)	%	(3)	%
Costs of revenues, excluding depreciation and amortization	4,643			5,131				(10)	%	(10)	%
Selling, general and administrative	2,475			2,194				13	%	11	%
Netflix Termination Fee (See Note 1)	2,800			—				NM		NM
Depreciation and amortization	1,226			1,547				(21)	%	(21)	%
Restructuring and other charges	204			54				NM		NM
Impairments and loss on dispositions	14			90				(84)	%	(84)	%
Total costs and expenses	11,362			9,016				26	%	25	%
Operating loss	(2,469)			(37)				NM		NM
Interest expense, net	(581)			(468)
Loss on extinguishment of debt, net	(27)			(4)
Loss from equity investees, net	(5)			(7)
Other (expense) income, net	(38)			82
Loss before income taxes	(3,120)			(434)
Income tax benefit (expense)	214			(15)
Net loss	(2,906)			(449)
Net income attributable to noncontrolling interests	(10)			(8)
Net loss attributable to redeemable noncontrolling interests	—			4
Net loss available to Warner Bros. Discovery, Inc.	$	(2,916)		$	(453)

NM - Not meaningful

Unless otherwise indicated, the discussion of percent changes below is on an ex-FX basis. The ex-FX percent changes of line items below operating loss in the table above are not included as the activity is principally in U.S. dollars.

Revenues

Distribution revenue decreased 1% for the three months ended March 31, 2026, primarily attributable to a 10% decline in domestic linear subscribers and the impact of the previously disclosed domestic wholesale streaming deal renewal, partially offset by continued growth in existing streaming markets and the global expansion of HBO Max, including new distribution deals.

Advertising revenue decreased 8% for the three months ended March 31, 2026, primarily attributable to the absence of the NBA in 2026, which had a negative impact of $133 million to advertising revenue, and audience declines in domestic networks of 8%, partially offset by an increase in global ad-lite subscribers.

Content revenue decreased 2% for the three months ended March 31, 2026, primarily attributable to the timing of third-party licensing deals at Global Linear Networks, a decrease in television product revenue due to lower initial telecast, and lower games library revenue at our Studios segment, partially offset by higher Studios third-party television licensing.

Other revenue decreased 1% for the three months ended March 31, 2026.

Costs of Revenues

Costs of revenues decreased 10% for the three months ended March 31, 2026, primarily attributable to lower domestic sports costs due to the absence of the NBA in 2026, which had a favorable impact to costs of revenues of $358 million, and lower content expense related to the amortization of purchase accounting fair value step-up for content.

Selling, General and Administrative

Selling, general and administrative expenses increased 11% for the three months ended March 31, 2026, primarily attributable to higher marketing and transaction and integration costs.

Netflix Termination Fee

During the three months ended March 31, 2026, the Company recorded a $2.8 billion expense for the Netflix Termination Fee. (See Note 1 to the accompanying consolidated financial statements.)

Depreciation and Amortization

Depreciation and amortization decreased 21% for the three months ended March 31, 2026, primarily attributable to intangible assets acquired in connection with the acquisition of the WarnerMedia Business from AT&T Inc. that are being amortized using the sum of the months’ digits method and the end of the useful life for certain intangible assets.

Restructuring and other charges

Restructuring and other charges were $204 million for the three months ended March 31, 2026. Restructuring and other charges primarily includes organization restructuring costs, employee retention, and consulting fees related to the previously announced Separation Transaction and the PSKY Merger. (See Note 3 to the accompanying consolidated financial statements.)

Impairments and Loss on Dispositions

Impairments and loss on dispositions were $14 million for the three months ended March 31, 2026.

Interest Expense, net

Interest expense, net increased $113 million for the three months ended March 31, 2026. The increase for the three months ended March 31, 2026 was primarily attributable to higher interest costs associated with the Bridge Loan Facility. (See Note 8 to the accompanying consolidated financial statements.)

Loss on extinguishment of debt, net

Loss on extinguishment of debt, net was $27 million for the three months ended March 31, 2026.

Loss From Equity Investees, net

Loss from our equity method investees was $5 million for the three months ended March 31, 2026. The changes are attributable to our share of net earnings and losses from our equity investees. (See Note 7 to the accompanying consolidated financial statements.)

Other (Expense) Income, net

Other (expense) income, net was $(38) million for the three months ended March 31, 2026. (See Note 13 to the accompanying consolidated financial statements.)

Income Tax Benefit (Expense)

Income tax benefit (expense) was $214 million and $(15) million for the three months ended March 31, 2026 and 2025, respectively. The increase in income tax benefit for the three months ended March 31, 2026 compared to the same period in 2025 was primarily attributable to excess tax benefits from share-based compensation.

Income tax benefit for the three months ended March 31, 2026, reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to a book tax difference in the Netflix Termination Fee accrual (See Note 1) based on current assessments, as well as excess tax benefits from share-based compensation.

The Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million. Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024. In January 2026, the OECD issued additional guidance on the minimum tax framework, including a “side by side” safe harbor framework that would apply to U.S.-parented groups. Even if this safe harbor applies, we would still be subject to local minimum tax regimes in countries that have adopted these rules. The interpretation and adoption of the OECD’s recommendations continue to vary across jurisdictions. As of March 31, 2026, we recognized an immaterial income tax expense for Pillar Two GloBE minimum tax. The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on our future tax liability. (See Note 12 to accompanying consolidated financial statements.)

Segment Results of Operations

The Company evaluates the operating performance of its segments based on financial measures such as revenues and Adjusted EBITDA. Adjusted EBITDA is defined as operating income excluding:

•employee share-based compensation;

•depreciation and amortization;

•restructuring and facility consolidation;

•certain impairment charges;

•gains and losses on business and asset dispositions;

•third-party transaction and integration costs;

•amortization of purchase accounting fair value step-up for content;

•amortization of capitalized interest for content; and

•other items impacting comparability.

The CODM uses this measure to assess the operating results and performance of the segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. The Company believes Adjusted EBITDA is relevant to investors because it allows them to analyze the operating performance of each segment using the same metric management uses. The Company excludes employee share-based compensation, restructuring, certain impairment charges, gains and losses on business and asset dispositions, and transaction and integration costs from the calculation of Adjusted EBITDA due to their impact on comparability between periods. Integration costs include transformative system implementations and integrations, such as Enterprise Resource Planning systems, and may take several years to complete. The Company also excludes the depreciation of fixed assets and amortization of intangible assets, amortization of purchase accounting fair value step-up for content (which is included in consolidated costs of revenues), and amortization of capitalized interest for content, as these amounts do not represent cash payments in the current reporting period.

The table below presents our Adjusted EBITDA for each of the Company’s reportable segments, corporate, and inter-segment eliminations (in millions).

	Three Months Ended March 31,
	2026		2025		% Change
Streaming	$	438	$	339	29	%
Studios	$	775	$	259	NM
Global Linear Networks	$	1,634	$	1,793	(9)	%
Corporate	$	(269)	$	(233)	(15)	%
Inter-segment eliminations	$	(375)	$	(53)	NM

Streaming Segment

The following table presents, for our Streaming segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (loss) (in millions).

	Three Months Ended March 31,
	2026		2025			% Change	% Change (ex-FX)
Revenues:
Distribution	$	2,533		$	2,329			9	%	7	%
Advertising	284			237				20	%	19	%
Content	68			88				(23)	%	(27)	%
Other	2			2				—	%	—	%
Total revenues	2,887			2,656				9	%	7	%
Costs of revenues, excluding depreciation and amortization	1,864			1,824				2	%	2	%
Selling, general and administrative	585			493				19	%	17	%
Adjusted EBITDA	438			339				29	%	17	%
Depreciation and amortization	332			371
Restructuring and other charges	26			12
Impairment and amortization of fair value step-up for content	41			47
Impairments and loss on dispositions	—			3
Operating income (loss)	$	39		$	(94)

Unless otherwise indicated, the discussion of percent changes below is on an ex-FX basis.

Revenues

Distribution revenue increased 7% for the three months ended March 31, 2026, primarily attributable to continued growth in existing markets and the global expansion of HBO Max, including new distribution deals, partially offset by the impact of the previously disclosed domestic wholesale deal renewal that occurred in the second quarter of 2025.

Advertising revenue increased 19% for the three months ended March 31, 2026, primarily attributable to an increase in global ad-lite subscribers.

Content revenue decreased 27% for the three months ended March 31, 2026, primarily attributable to the timing of third-party licensing deals.

Costs of Revenues

Costs of revenues increased 2% for the three months ended March 31, 2026, primarily attributable to higher international content costs to support HBO Max launches, partially offset by shifts in the overall mix of programming.

Selling, General, and Administrative Expenses

Selling, general and administrative expenses increased 17% for the three months ended March 31, 2026, primarily attributable to higher marketing expenses to support HBO Max launches.

Adjusted EBITDA

Adjusted EBITDA increased 17% for the three months ended March 31, 2026.

Studios Segment

The following table presents, for our Studios segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (in millions).

	Three Months Ended March 31,
	2026		2025			% Change	% Change (ex-FX)
Revenues:
Distribution	$	1		$	1			—	%	—	%
Advertising	—			1				NM		NM
Content	2,934			2,139				37	%	33	%
Other	190			173				10	%	4	%
Total revenues	3,125			2,314				35	%	31	%
Costs of revenues, excluding depreciation and amortization	1,679			1,413				19	%	17	%
Selling, general and administrative	671			642				5	%	3	%
Adjusted EBITDA	775			259				NM		NM
Depreciation and amortization	170			170

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Next expected filings

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Recent SEC filings

2026-06-04 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
2026-05-27 8-K Material Agreement Entered; Material Modification to Rights; Other Events; Financial Statements and Exhibits
2026-05-19 8-K Other Events; Financial Statements and Exhibits
2026-05-06 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
2026-05-06 10-Q Quarterly Report
2026-04-30 8-K Officer/Director Change; Financial Statements and Exhibits
2026-04-30 DEF 14A Proxy Statement
2026-03-16 8-K Officer/Director Change; Financial Statements and Exhibits
2026-02-27 10-K Annual Report
2026-02-27 8-K Material Agreement Entered; Material Agreement Terminated; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
2026-02-26 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
2026-02-18 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
2026-01-20 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
2026-01-07 8-K Officer/Director Change; Financial Statements and Exhibits
2025-12-05 8-K Material Agreement Entered; Officer/Director Change; Financial Statements and Exhibits

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