Warner Bros. Discovery, Inc. Q3 FY2024 earnings call

• David Zaslav provided an overview of the company's journey, noting assets are undervalued and efforts to reduce debt and enhance value. Max has seen strong subscriber growth, with 13 million subscribers added over 9 months, and 7.2 million in Q3 alone. Progress in Networks with Charter renewal agreement. Studios work to return to industry leadership with some bright spots but need for consistency. • Gunnar Wiedenfels discussed D2C momentum with strong subscriber-related revenue growth and EBITDA, subscriber growth drivers including Olympics, international launches, and content. Addressed total company advertising decline, Studios performance with game impairments and film results, and free cash flow details.

Direct-To-Consumer: Revenue of $2.6 billion, up 9% year-over-year; EBITDA of $290 million, up more than 175% year-over-year. Networks: Advertising declined 7% ex FX; distribution revenue down 7% ex FX. Studios: Performance subpar with game impairments and film results affected by Joker 2, but TV was strong with robust performance and expected growth in Q4.

• Expect strong subscriber-related revenue growth and EBITDA contribution in Q4 similar to Q3. • Confident of meaningfully exceeding $1 billion in EBITDA in 2025 for Direct-To-Consumer. • Studio Q4 EBITDA expected to be up a few hundred million dollars year-over-year, depending on content licensing deal timing.

• Generational disruption in the media environment presenting both challenges and opportunities. • Uncertainties in Studio performance consistency and impact of content licensing decisions. • Potential negative impact of secular revenue declines in Networks' advertising and affiliates.

Q: Steven Cahall asked about how DTC investment and EBITDA expectations work together and when Studios and Networks may enter growth mode.

A: Gunnar Wiedenfels and JB Perrette discussed DTC growth from new markets and rollouts, with JB highlighting content strength, international rollout, and partnerships. David Zaslav emphasized the long road to Max's growth and JB's observations on growth vectors.

Q: David Karnovsky inquired about Charter deals and Studio approach.

A: Gunnar Wiedenfels talked about Charter's strategy and its applicability to other distributors, and Studio progress with TV production and DC plans.

Q: Michael Nathanson asked about US subscriber gaps and international partnering.

A: David Zaslav and JB Perrette discussed bundling, consumer experience, and international rollout, with JB noting demand for Max and US subscriber mix. David Zaslav mentioned industry consolidation potential.

Q: Rich Greenfield asked about Comcast renewal and M&A views.

A: David Zaslav spoke about long-term business with Comcast and focus on enhancing shareholder value.

Q: Jessica Reif Ehrlich asked about asset sales/spins and DTC advertising scale.

A: David Zaslav emphasized underlying asset value and focus on shareholder value, while JB Perrette discussed ad scale levers like reach, ad load, and pricing innovation.

Q: Bryan Kraft asked about DTC pricing and Linear Networks cost.

A: JB Perrette discussed pricing power and retention, and Gunnar Wiedenfels talked about cost discipline and content opportunities.

Q: Benjamin Swinburne asked about Studio bounce back and One WBD benefits.

A: David Zaslav discussed Studio bounce back across film, TV, and games, and the benefits of integrated content for One WBD.