WBD - Earnings call transcript Q3 2024 | Warner Bros. Discovery, Inc.

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Operator

Ladies and gentlemen, welcome to the Warner Bros. Discovery Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Additionally, please be advised that today's conference call is being recorded.

I would now like to hand the conference over to Mr. Andrew Slabin, Executive Vice President, Global Investor Strategy. begin. now may you Sir,

Andrew Slabin

Good morning, Bros. us Warner for thank QX earnings you Discovery's joining call. for and

Joining me Perrette, today Officer; is David Zaslav, President Chief Global and Officer; President, Gunnar and Financial and and JB CEO Streaming Gaines. Wiedenfels, Chief Executive

and that forward-looking forward-looking safe of comments risks future actual the statements involve Securities may will Private pursuant Act Reform business provisions make and company's statements include presentation materially that to we plans, financial uncertainties Today's of could the to Litigation results include the from harbor XXXX. performance, expectations. prospects and our The regarding cause differ

the additional the most on report XX-K that company's For and recent could and see the Form on Form its with X-K. expectations, to, U.S. Form Securities please but factors XX-Q company's on filings including, and Exchange annual affect information Commission, reports these limited not

financial non-GAAP the in our of which we section to the addition, call. this be trending In Reconciliations GAAP can website. our discuss of on Relations will financial in and found in measures measures can earnings release financial measure be these Investor schedules, non-GAAP closest our found

the And David. to to with turn call that, like I'd over

David Zaslav

with playing we are them and by are where our there see several challenges, value both you company my forward, us. and we Discovery with an broad the challenges for being And our and want in that confronting focus to seizing our we It now, important I for known are journey creating determination. Right start creating our shareholders. addressing on are is Good opportunities. is everyone, of where generational morning, we dynamics business. how remarks moving are thank a providing them is Bros. opportunities, by disruption, joining is overview out reshaped Warner today discipline which well environment on we and Where ultimate directly.

aggressively their undervalued, to we First, we our are business and of currently comprise demonstrate base the that fundamental expense enhance cash effort free Part reduce their our believe that value. strength involved are our and of many to acting that conversion. lift flow and working assets has

paid more debt, with cash this ahead. in we year our than down $XX still date, of quarter To have generation strongest billion

team highly of range on initiatives advancing Our aim value company. and enhance identifying the our focused is of a to that

these initiatives As am upside. shareholders and significant our mature, I both will confident feel see

making in strategy our are Warner and we for Second, next executing creating strong progress Bros. Discovery. what's

invested those to Over line driven creative the partnerships meaningfully investments have Today, and our last and X.X and direct-to-consumer delivering accelerate years, talent, growth. clear are structure segment. technologies our in we platforms, in bottom new in changes results

have making do the kind strategically, we more shareholder we are to necessary you are detail where, assure of Max, work work revenue and can improve unlock progress, subscriber and deliver are expect. operationally We to growth to you profitability. encouraged progress we we value. and driving doing all steps, But results evaluate and I be performance to clear, by the in describe our I as is will increased strong while shortly, at And to substantial more

attack expected conveyed there employees, deliver As of shareholder I have X to prongs our are gains. to

Max both deploying in reach it potential and storytelling its achieve First, full distribution enabling as and globally to platform, profit. a

in television our then Gunnar address briefly business. returning to Networks and areas, performance will of will including U.S. financial our more segment. detail by optimizing our business, Studios each industry I linear share Second, outlook leadership. And our these third, and

We has clear sports, film, direct-to-consumer listened content platform required Anyone Warner very Bros. Max who of and has has global First, Max's to quarter to and development calls it make been last patience, the -- successful and to TV, a years Max's right has and possess discipline been knows a tremendous investment. over news our deployment. available a earnings that Discovery. initiative. fully content building important and one produce leading, X substantial Getting in importance strategic

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We have subscribers, globally. added additional million XXX in million third the part to XX X.X than now million quarter have subscribers subscribers alone and thanks in more

and enjoy to subscriber revenue and growth Equally subscriber-related another Overall, of in see up direct-to-consumer $X.X And X% encouraging, revenue $XXX we're growth. revenue, in is billion strong of XXX% year-over-year. million up quarter our the profitability and profit quarter, we more growth. year-over-year, beginning will real EBITDA significant of is than acceleration fourth

great First, driving success? What's this content. of have course, we

While always wins. technological entertainment content and have great attention placed emphasis distribution, of on shows' history advancements the

We improving content season most Lotus, which a XX basis. Beginning Peacemaker, we Last name and of Us cadence feature of this The to in want with people the put see to are with and and an also the Max with consistent on June with X shows, extending now originals more like Penguin, White PROPHECY, House even Dragon is few. the and front of just them. new the titles films of continuing forward delivering pole Dune: past

can being markets we and in the our international going as one expect without rival. subscriber that XX-plus critical years Europe streaming QX our language others Internationally, many Olympics local a Even just momentum delivering in few the is Latin our content the is across to success Max in Max content in that Europe Olympics, local on continue example. being role America forward. way home The in driving of by growth played well markets, as originals driven sports of new most in throughout with platform beloved or and

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Gunnar Wiedenfels

financial seeing and remarks on across net ahead. my key operating Reaching and David, some adds, subscriber-related like inflection about for direct-to-consumer, I'd morning, and to everyone. begin a has good quarters you, we metrics, with are priority, momentum with clearly Thank where subscriber seen the we strong what I'm expect and point this enthused the traction excited we've EBITDA. and been comments revenues

and XX% similar including levels factors, bundles of fourth expect DXC Olympics traction net of Disney the $XXX combination in X% launches, contribution and growth, drove the million million and in line. Subscriber by growth from to Max momentum subscriber-related was leading revenue And driven advertising growth subscriber-related QX, international like X we EBITDA resonant acceleration nearly Over revenue on an content consistent EBITDA. adds recent double-digit in in a quarter. more the offering Europe, a from and Hulu growth

reach we a said, saw clearly will We bundled, internationally. That KPIs. There partnership framework many be paths to wholesale consumers have the that we this or clear certain which arrangements divisional more to will changed. is directly, Max, variety to expand managing business also has continue in that in the our the naturally not reach BXC scale financial are implications for options It particularly of as quarter.

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or higher Others dynamics. Some SAC, lower and will initial levels better higher but ARPUs. inherently upfront of may churn ARPU, have commensurately spend, investment, but have may require lower

maximize and We this to filter subscriber to a value goal options all have evaluate continue through with creation. will

on focused revenue, scaling advertising best we are and the are we program is the making that revenue, measure subscription DXC as subscriber-related Second, in the for business.

this markets, we months reflecting markets, next ARPU launch advertising-supported footprint Importantly, and now offering term, a given many international over Max's XX over the to the XX Max expect markets. year, so near ad-supported growth the the to rollout of in see the or market, one of lower only until in from more trend in cadence of up the lower-priced

as as expect reflect acquisition. the enhanced where when, growth we and strong going invest EBITDA revenue retention, heavily forward we in which how of and well further However, will subscriber cadence subscriber-related

declined down large Networks step X% advertising schedule the which sequential Turning FX. now down to company total advertising, slower as FX third during ex ex XX% was part to and expected with our was The due seasonal quarter. sports in

Max the U.S. FX from continued a over gross XX% in global Global advertising, modestly demand however, grow Europe, Olympics. to XX% ad-light approximately business adds pace, of nice Olympics the in we XX% the while adversely for impacted U.S. our was up at healthy Additionally, benefited in much behind QX. BXC year-over-year, larger ad-light grew ex over tier subscribers the with taking by

contribution distribution DXC international is down scale quite revenue FX, was ex of advertising we see impact the of X% the monetization. Networks drive opportunity ahead subscriber and and the X% we as While small, still base AT&T SportsNet. excluding down

affiliate renewal Our the remain we is active, fluid focused our with across working distribution and pipeline landscape. on partners

deal the a as with have deal positive in is both as our partners to affiliate industry of of value come example the meaningful business. new the potential Charter structures, referenced flexibility linear the on consumers of great with trajectory greater The our impact to a we've recent the DXC much to and great forward-facing content up to and

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international list than water we this on side across partnerships more strong has the bothers been at DTC. by As have discovery the offset long these gains of renewals distribution year enjoyed our linear our revenue total concessions to growth shown, in as have net indeed

relative Performance games notwithstanding to took lower profit our impairment in decline. year's last to million Hogwarts QX, comparisons last flat the on to releases, year. were in by Turning as key underperforming primarily this to another for $XXX total we difficult modestly games MultiVersus Switch factor subpar Studios. impacted business, this platform million which in offset a in internal November Barbie expect bringing was we studio year's quarter by quarter, the with our Legacy $XXX be plus over Results costs. In the better year-over-year to launch to year-to-date due write-downs of the games is expectations,

the largely Beetlejuice. Film driven results relatively well performed quarter, in by Beetlejuice

October of we the currently to year-over-year less year, more in Joker's on QX of underperformance, and [indiscernible] Barbie Despite indeed with trends. year. noted, the on prior release marketing of for profitability, as last weigh ahead for So perform its line the Joker bulk spending in QX the business forecast The will or film which weighed

releases which the of last a reminder, for X weeks a we spend in had hefty As limited realized theatrical revenue. amount relatively with X we of marketing XXXX

the Rings We movie, modestly have only Lord one of which Rohira. the release War budgeted and remaining the in is anemated QX

hand, to the Warner is other Bros. strength TV, on going from strength.

impact did a of year-over-year favorable the underlying TV remains have against last strikes the While performance comp year, robust.

benefiting and marketplace the flight headwinds, some Within during we believe to are from we quality.

in to QX, few this to up EBITDA content the All expect continue significantly hundred expected million Studio QX depending deals. expect up certain We dollars be of to year-over-year we and TV be on momentum timing year-over-year. is licensing a in,

improving as the term, results as overall eye slate consistency I characterize noted, of David In towards the is As near are we our and to one production Studios creatively top discipline performance that reestablishing committed resource we all results. industry this with leader. line film and would across an and will enhance on processes and marketing, accountability and I across financially, both help budget and expect focus greenlighting, bottom more both balanced, prioritization. sharpened our an

I'd take Further, role business. for and back impact like step discuss content of and our a to Studio the licensing

on decisions As make platforms. our on I've evaluating data increasing it and external business are an and they collected And we our to content, by basis of or a those how we be informed continuously internal units. intelligence are monetize mentioned across best amount previously, case-by-case

and are library level. two, the in at global will rollout increase support low licensing by those factors: generally DXC get that significant a licensing; product, characterized growth the available be relatively number eliminated to revenues of internal WBD one, and our consolidated and X for XXXX number year-over-year

benefit While factors EBITDA performance. no have in material cash clearly way, our they consolidated doubt these burdened future a free in XXXX financial and flow will

For the to next normalized a more availability return former, starting we see level year.

pay asset that base come. we latter, for business the of to DXC dividends significantly added and years a our top know valuable bottom in line will to For we performance have

decline generated Finally, as billion strike turning largely Olympics-related capital year's QX higher in roughly cash content last flow. to dynamics. net cash The unfavorable due working we $X.X year-over-year cash free flow. impact We lapped free was nearly spend million and $XXX to

to healthy cash content net in free Looking in increase represent we year-over-year cash conversion spend of while QX, a flow again another QX, expect should EBITDA.

In flow week. next about have leverage Net QX quarter, was increase $XXX headwinds. bit million end and cash a slight flow at the and sequential and given line of free of repurchased X.Xx, free directionally $XXX cash repaid and million in a expectations maturing seasonality we the the with Olympics-related nearly

initially year-over-year, of part longer all to as the the We to continue Studio gross much shortfalls will we target And albeit cash continue expect term. we free virtually delever than debt, to use to to flow retire and leverage in to due impairments. X.X modestly to more planned, our continue Xx for

Lastly, I'd and a began, focus off have like high David and we, Board, finish that driving that is to team on the of shareholder the degree placing been management to as value. reemphasize where

focus examining to ahead we opportunity part strategy. Warner every and angle executing longer-term Bros. to of continue And as for this, Discovery. We creation possible realize see on the value path our

and will take JB With happy questions. that, be your to David, I

Operator

question Cahall Steven with come Our from will Wells Fargo. Instructions] [Operator first

Steven Cahall

you. Thank

acquire you're not and expectation your JB, those in improve also think, think to making XXXX And about about billion above shy meaningfully be of attractive, upgraded kind to, So talked ability I DTC DTC to $X to remain Gunnar subs its investments. for the if EBITDA they you've going you qualitatively I to opportunities then the continue and and now.

work is accelerating. the together? things about EBITDA expectation It you investment just how but your can also X accelerating, sounds those is So talk like

on love more how just color that. all would some we So tie

you've of mode. journey. about lot a expense base talked the on you've that those back kind your and and is bottom Gunnar, and Studios growth you like in DTC that about a through David and investments cost growth reducing cuts the sort done seems line? reduction It and to then maybe And When you're where through into this in of may Networks get more do at think of again talking efficiency business of period

Gunnar Wiedenfels

take X. Yes. me let Steven, those

and the territories, rollout new the are of our things initially sequenced DXC been to things is we losses. that investments has rollout from great same But growth new enjoying been growth X our from and about we benefiting at have business That's the same one start-up global lead and of combination, the the markets established time, in at at called So we're maturity the which time, inevitably to in to remarks, revenue David and EBITDA growth markets. time. the of this growth, sub as same business why his get prepared in out way able

If confident are markets kind that with into double still will are profitable very and obviously, now there, very are that but others there a executing you of that continue to able be loss-making, I'm we click that right profile.

making the the these back with focus and we sure little that question your segments long-cycle take of continue visible. network, remember very the is see all in have don't got comes right for space that financial the both in of the amount about the earlier discipline as, impact become this to across a And us that lot what a the is we to expense heard business. operate invest cut of transformational terms Studio, where been longer on when have they place, doing to put are A example, for returns. it for clear we it's talk while going we base, you a In that DTC or and to as going to as we we changes a

David Zaslav

this meaningful spent moment on a building for this Max dollars. of seeing X that we're address several us. moment Max. We over It's billion to growth losing platform. Just was years

of We Max sport, sure And didn't and substantial. have mix from the we then X/X on been it, HBO entertainment focused launch the on making lineup and that, through content finding content, HBO, until great together really is first local quarter. and the right finally, launching local that with Max

a at same are meaningful while we this continue. seeing on profit moment. expect JB, having growth substantial the that to the of growth sub-growth, time And kind so growth, And you very it's ground,

We growth going seeing be expect received it's growth, growth, every being the have subscriber and profit well because the quarter and to demonstrated really is by offering subscribers. we revenue very that that we're

you're So JB. seeing, just bit talk a little about what

Jean-Briac Perrette

the David it's as point Yes, most X inflection still because, it's is to part innings. road is very a early to the a been Steven, over last years get point. this quarter this long material really preparing this exciting said, And

years vectors. driven number X-plus of have a of We different of by growth growth us ahead

in point on year. schedule and has pushed as lineup consistent, that said, at in fact David launched our strikes stronger, foremost, unfortunately, The stuff the tentpole we the helped more gotten were a first we Max we just when by cadence, out a content is U.S., timing, based better our lot last had low the release

'XX into that forward. well for as better the in by, much lot content fact the content so outside the of strength look investing markets 'XX been have and and we biggest cadence we a And a U.S. roll decades local internationally, content out Bolstered in as we've and 'XX we also

these content combination invested international as already in so language U.S. content both markets. as that in, well it's of English great And coming out of the the we local the

a big half low and The just the that that's other world, to we very are markets even China, than India, and market. around over the international markets is huge a Russia still When excluding remember driver. broadband rollout addressable -- of in just like

huge a that's So driver.

where password in then are better, haven't distributors and we're that's you've conversations but in not who And active drivers with great this sharing we yet. economically the in better Max like and distributors not us. And seen crackdown. of product And things for in for help gotten And like we've Still even markets touched great product want mention France, ways. very smart to experience us polling we're having accelerate yet to good very Japan. with partnerships we of those world we've to conversations some that with as Spain, launched rollout on profitable have be in the the third, want and around

a And of so still drivers have growth ahead we of lot us.

Operator

Our Karnovsky from next JPMorgan. David question with will come

David Karnovsky

Charter September, with Studio think applicable other agreement know that on structures comments. similar whether interested just following you've And in had distributors, the then your reaching to up model if discussions is Post with on you elsewhere?

past in slate from current is the Gasco out the that pointed the You the largely team view the one you've terms How investors point? prior in this brought? from the has What's differences management. inherited of approach should notable

David Zaslav

Thanks, Studios that David. Look, side, we the on have runs. business an Bungie industry-leading TV substantial. Channing quite production It's

We almost have And economic a best carried of on generating substantially, riders directors. that's every content the real with we're we're brands, platform seeing down growing value. and even that market has in some that, really with

The it's long-cycle time. talked a a for Studio We've business. about business, long

of in real going on what going DC summer And be And exciting XX-year because -- part a to plan they the DC potential, the on of I -- terms lineup we're for their lineup our to we've in Pam have made store a from X to we've of to focus. it's this year. first working X- they'll start out see to this think will been lot with I has and We're and years. and Mike quite that see rolling start Superman. think Peter progress see James with

was to the value going year, films the for opportunity next the for and So most talent start generate they see the company. believe to had the them to that this finish, most growth they start year that and with we'll

trying really on we're some through we're XX, the to steadier. real been love them. different have And we to those to worst, with gaming of And And we're to a to X think focus and But it real are XX, on have I gaming XX XX, away now be finally, business. from we that the going primarily. powerful games. have constituency a the that think And going business X games launch I go pretty and hasn't chance focus have

very encouraged. I'm So

a of growing. wind know ambition back start there. billion our to You there's to at And least building and in lot back with then get order our blocks $X get at to

thank So you.

Winfrey very strategy the of to Chris a experience. contemporary love at consumer through And the giving same multichannel the we Charter, a On It's distributors. strategy. cable home time, embracing

You in talk encouraged could earnings broadband it could in watch it consumer And you Charter and more significantly the traditional, if if which it, want contemporary was consumer. to to do you and have free-to-air want and I hear your the to home where it's about about on all can watch of you're experience, cable, more in their streaming. investing watch marketing and cable, watch a call to hear it you do have you you driving television because it. you money streaming, can Chris

or And still maintain X we there a on gets those been produce basic or around of our deal. that of we very lot it's Food believe that a ID, There majority parts the channels we're And and we will real content the where cable. the HG portion was Chris the in to And networks Networks, CNN distribution to those across kind or up really or big were values of were because for make we've investing world traditional used in and domestically and around values Networks, the whether on we those those expect, world. finding deals And board. to economics And drive get multichannel able business. we meaningful we our Max. still value value --

distributors some that in and just hope some to see. really innovative other doing do discussions we'll deal. interested quite it. was it, that have an We're are with We will So in

Operator

Nathanson from question with come will Michael MoffettNathanson. question will next come Our next

Michael Nathanson

have potential And and they dig really years help I you get factors do open about where factors? doing internationally, X. do One what how know would partnering in think Netflix the your partnering have ahead do close when into you're to How underpenetrated it's that given you then What to you about or been can So where scale? you strength that it. about that are subscriber at time? internationally, be have you David, over some of gap think is, look be the is your [indiscernible] number, So U.S. been that? I and the chatter that you. gating What more million, do will through there's like see, you competitors internationally, of other streaming definitely thinking you interest think philosophically? are with some competitors X

David Zaslav

for consumer the for so We're U.S. very piece. And time, to about it a really a been also products. in between products is partnership subscriber and early, growth X a opportunity can consumer in but the what talk that bundling. And economic talking can high. subscriber of going And not better product Hulu. and needs significant side. we're but is just quite bundling Disney was JB together, I've products satisfaction be pay the about is navigate have and seeing long to those better it's we've less originally learned strength the But on consumer this come or for with Look, a seamlessly lot the X

of in number that doing a markets. We're

together getting and big think think local into bit, in giving our JB sports, the the relationships talked little local a content, is and I that these markets, of just company JB U.S. internationally, a HBO markets Max then with entertainment have I advantage. these and to we each and

Jean-Briac Perrette

are the the that higher that some and product particularly market we're need partnered the the in U.S. say, mean, products every market, the the in demand about outside the in like ultimately the to learned Max conversation may with, they've and other with And partners in that's over have we years very few last something and look, quality. of that's broader I'd it U.S. growing. high flip may I market we lot and products they originally Yes. be is the later and seem as specialty coming a saying that for side is of

quality more looking where more that the about is to his are Gunnar in space. consumer and the true mentioned delivers experience, flight I ultimately the think comments, And service a that in higher people has also Max and quality for that curated

we're accelerate, And drive as side driving partner our high so is the what's rollout ways that to and very innovative distribution demand is seeing the growth. and is on us of help key, and part international

still on declines, a the on just to got HBO headwinds growing like the based X pay basis one we the on in wholesale a to -- universe your ties the back TV facing on Number based the our are you reality have think model. retail remember. that it on mix there's Michael. the is, we're fact still And The And changing. hybrid question I is things is legacy of we U.S., U.S.,

And that drain with refilling so bucket refilling it are cases, and, than in to is we continuing retail some while a some. more bit, it

So growth are we there. seeing

how streaming ad-light services, households ways penetration is can important to become to to and consumers. penetrate or fact in-demand of The harder figure to those have the that very you're do as Disney lower obviously very is on out to think, we figure X price-sensitive the naturally, progress solution they best the there in The but trying an largely And Hulu, SKU us. where, new more or price-sensitive already And X seeing that households, proposition. finance really seeing mentioned, us is obviously we you very out things look income consumers. price-sensitive with X particular. way one, maybe we're at gap, other grow early sub-$XXX,XXX I The the in more is good bundles we likes with but

the the mentioned a and paths with new partnerships the partnerships find marketplace, us new the angles and then more earlier, consumers. other we've to are Charter, of done the of with of that those to get helping some And price-sensitive likes DoorDash in likes David

David Zaslav

now. so or a is this driven going with I've from starting really where your sport where TV been good for of it and and to sustainable. And those there on another, each is phone see doing long really more been experience. Michael, the meaningfully It's needs have And XX there's that's one apps. put to meaningful that show consumer to is, And Googling through not are to and it's have a you're and you're Finally, just a probably not should saying many separate page. It's sitting pricing, see it different industry a experience. whether an and they by you and consumer to that consolidate. a consolidation, -- time, set go Consumers

fairly by should part -- that I starting also happen -- You're somebody you bundling. part could could of and large maybe should else." be "Hey, to be or I see But saying, one players maybe be a of

where not only to as or give coming maybe some offerings, will but actually be a on bit together equity could depending of the where pairing a domestically of offered some of internationally other players players The be will these have you or independent would little the market.

a accelerated And early -- have And and and opportunity great upcoming a that's for administration, have it quite it's disruption is and new stronger better These win, to an would impact and to facing change to too a content be industry to be have that's businesses order for needed. a And tell, going different, some needs positive may of these an that that industry generational consolidation there this experience. is but finally, if just on outright real provide in may real offer be an that of consolidation the consumer are consolidation to pace we best in companies. challenges.

Operator

Our question next LightShed will Partners. with Greenfield come Rich from

Richard Greenfield

about the But you longer-term minute this think on think and maneuver. flows. And coming all as I of potential renewal as guess there. what the realize cable specific know point with your into how domestically think head people I the And of for division. as the in the there's deals Comcast plays David, cash global renewal have I But relating cable I those to usually Especially to still a comment with you you abroad renewals. a confidence renewal I gives of both think lawsuit consolidation Sky certainly you lot sustainability network upcoming of with critical view strategic and host NBA, a their is a process into without ago, investors sustainability the up just Sky? I networks Comcast, well don't

say could So to be anything you're you help how great. renewal us about that thinking understand would

David Zaslav

don't -- deals did for advertising, We and of were for years. together kinds deals I create -- timing on companies. about together in done all deals. Germany about Italy. we've doing really with we've domestically. business specific value Sky or done deals we've But tech, U.K., in both Brian have in been we talk XX almost And order Well, together and And on been Thanks. ad to the

portion and look as big have basic And I that's that to much think, I the highly the future, one, we so valued of provides cable so a content investing of we're very value distributors. Comcast and -- bundle the and and that's that because content, and -- that's with which in with recognized them Harry all for forward hugely successful for business successful unique has -- Potter us. been I providing in And look by very on we're even we we're think

I that so lot And stuff expect the a in we'll together doing more be future.

Operator

Securities. with Our Reif Ehrlich of next Bank come will America Jessica question from

Jessica Reif Cohen

best out couple recently of been of the discussion. of last A call there's David, you just another kind their this, considering big another Republican your politically, the with guys they for flow merging M&A networks, you were said think, competitors in would on but sweep, alluded with to news streaming, questions. outcome week you said competitor One that were spinning proxy, cable in the

of of possibility a some us your you up networks? as give assets of on rolling your And current some views can a assets? maybe given acquiring a or spin So cable of of that views backdrop, other all and/or sale

think -- kind just getting And do separate when there DTC, give like And the do in alluded of can plan consider then a question. consider you on of and you'll scale? completely to us what you benchmark you what this, advertising there? JB you get you how

David Zaslav

And this Look, remarks. would that doesn't every that of to operationally prepared transformation more the value And at looking doing. our work, see domestically believe really meaningful that's shareholder we're value. you hard adequately beginning great much always reflect executing That's expect, are -- that's strongly at focus, what But of we're Jessica. to seeing significant we're I these to of, drive and which price results that current to of focus stock underlying as Board's have. add you and ways the our course, world assets don't and we the we we're we're have company to the and around growth. the enhance day, Thanks,

Jean-Briac Perrette

call in way Jessica, the we over answer than remarks, as that innings of that, in as reach were months look, are, at think, what And Obviously, the primarily the X David we're year are in we of mentioned SKU, shortest again, in X over one things. less I ago, and we ad-supported old. we now levers scale. the -- their XX, which, on by side, to but a prepared driven ad are the very market early Gunnar is that's

still reach runway we on the in side, ahead. we the believe quarters have so And enormous

current today We light. any ad series, the We are On ads side, the example. HBO the load up put we an don't break as content. in don't

content pre-roll put We we some don't there. we're but anything have in sponsorship, making

compared very most a have to competitors market. We ad of the light load our in

and room innovative, try formats is capacity marketers partners I'd of drive very And to creative So to for terms innovation with we're, more in the side. on to again, there us. grow and say then side, pricing work capability and in ad ad the format early

provide a great are And those of levers to X going so amount scale.

growth So revenue I think the early stream. we're in innings of advertising the

David Zaslav

with consumer platform globally, how terms and reasons And we of it's why, like the too one presents doing want they lot that in how are best and content that we're don't really we add we the as quality inventory, a we make challenges same advertising And that content, the local have they the the sport, of of much build like not best that as really that seen cable on Look, others mistake much this idea nourished to made. that. industry the platform.

White of experience. We of part interrupted at future. You're quality to House the the think not foreseeable least the Dragon or watching Lotus, for is the quality going be of the

Operator

Bank. from come Our Bryan Deutsche Kraft will next question with

Bryan Kraft

you continued I the one today next much be is and growing in couple the order pricing. have power guess in obvious first secular much that talk you of and order how then important cost on just could about do think year Can I to see engagement declines you Gunnar, increases price advertising just will business wanted too, to how forward? to if over opportunities a linear on in revenue you going mitigate you revenue And affiliate? about I can years? I had the sustain DXC ask, How anticipate of the lower pricing talk you driver the in networks next cost to side. do

Jean-Briac Perrette

been has about to actually and room to done we've rise so rises. on particular from think amount we've the in be I'd to U.S. continue last been retention X far, we've We We've in than We the it. -- price. -- the the product continues But look, of Yes. years, a churn Thanks, -- nature price pricing judicious done to of and Bryan. to lower be what say every over projected seen have price our expected, fair side, us premium the X push the strong. lends we we've

is other sort that price of rise, we haven't we if The I is which seen, a it will, mentioned done earlier, thing a that you haven't form of and anything.

more. on form that, this kick not see which messaging will is kick asking later pay sharing. members little or off soft around and to a We're some more up that, have a who price we a And in you'll more into quarter We 'XX, signed as multi-household very into progress password obviously rise. and 'XX members of effect bit

kicker. going see that you're additional as an so to And

say that -- we to Not And more I'd internationally mention only where actually judicious, we've fairly say, is, been as -- we're haven't LTV internationally, focusing as price then let's we we get thing rollout and the say into out. last -- we're said, the as as rolled a a months additional on on place Gunnar is product well. I'd see X opportunity. we Remember,

clearly, price at And LTV the growing at ARPU the the retention that a really confident so of makes these the same lower of more of us critical, price slightly level bundles, much we're dynamics positive and is signs those of the on see the to the some retention value, drivers but really, in time. even starting absolute

David Zaslav

offering. One bundles it's advantages the the of of true direct-to-consumer a is

of been no is any shared these that the channel -- revenue building service. there with So stores the effective in have

actually can all the have products. a higher, of the still because you consumer are your each coming could ARPU economics you that So to do discount bundled and

Gunnar Wiedenfels

And Look, to cost and the on continue Bryan, here. disciplined focused be we'll side. then, incredibly

are out we'll We of have to billions structural out our X of on taken to those a flow have operating that inflational next Those still years, and to in are work technology broadcast going still longer and through infrastructure continue took cetera, measures dollars measures, some in highly implement. beyond. and despite measures over et base the year We that. environment operations for little and past a the reported cost

one-way some the on may, content and fresh platform we in scales, library well. as are more opportunities. then my so far the content the for point, KC more big is this from sports. that that as The with that that and other and to long-term internationally, for Gerhard supporting side at definitely street opportunities and more investing lead and And It's opportunity will the hand, perspective is, there talked a but little JB linear be greater pretty about longer much business a DXC on product more term, the before, we've of company content produce

we've As up new a high-margin a largely a And of lit this number with fixed rights. know, base. is business cost you

revenue away side. to the to the able we're pressures we're So fully offset I take don't that you to going expecting on want be

David Zaslav

HBO we streaming seeing, can year, that in have than you -- could as content that $X and it we're back really see investment have to that of additional is held economics billion were that the our less something... the or prior But we sold have an Max service

Gunnar Wiedenfels

right. That's

get you're lot revenue next we're of returns is in internal on the we're great on that As several revenue not But mean have is deliberately of is said, investment we year. right, that mostly stream. right. profitability our million because Studio, pretty DC billion, I I this hefty But WBD a where the participants And on lower this impact paying few years prepared hundred over as normalize which And -- have as the revenues, David had, said content we obviously. in availabilities business. on you sold an consolidated I our a hoping internally, to basis is licensing depending affecting a the my number. remarks, that

David Zaslav

year do will up next products we But be... have a number coming every-few-year of that

Gunnar Wiedenfels

we going be Essentially what to year all the coming saw this year. is of than this -- better

Operator

Swinburne from come will Morgan question Stanley. with next Our Benjamin

Benjamin Swinburne

Just finish comment. maybe to up that

it think to year seems next like bounce back profit-wise we Studios, As it's the poised nicely. about

if your earnings would on that theatrical declining you of trading going maybe healthy 'XX just has kind So stuff, kind post agree in in games? a there in think write-downs the And licensing stock strikes gave TV company to for is confirm, could growth any strategic foreseeable like of more want And versus quantify? I then, think that's of back Are the us still the you after you future. just the snapback? David, 'XX sort to everybody

Networks company on I and look or those. that your said a in separate streaming, think business why got in growth the so businesses not studio and businesses are have at some and declining growth you've you

are different you opportunity at So is, the and company? of One in thinking talked are as make my important Discovery do value? of to see Warner you've WBD? substantial One and to Discovery Bros. kind open Or owning a What about you mutations might question since or you meaningful And sort merger. lot sense that unlock investment businesses changing the those to mind or of long-term your about of benefits inside one the these all

Gunnar Wiedenfels

Ben. Okay,

we do think I to the continue better XXX% discussed group think this We results. you're it's board. the to is about back, Studio that across momentum. the look, think WBD TV film right business, do Channing's going bounce as So at the and see really going is I production length,

and your to still content on to licensing as recover. opportunity. minute certainly that tours higher And is made XXXX investments to have a significant side from to We set be discussed point, going Gains is retail base. a franchises, is have we going just think starting an area the we definitely ago,

have we're there. confident and statement so in growth billion then going to So $X see we from why our that that's been

that for Now here. make, long-term story see. individual will We'll still we to and depend is the very those from it's A a on to all lot think studio XXXX? materialize I in need But decisions growth of have the here going ahead to business going sustainable units.

especially integrated is in example. on of the this still innings. single of this Penguin running we content, an it company the progress. a made to early also his when again, look, WBD One we've the an area remarks, see the point, comes ton day. And basis. benefits where had David every We're On in prepared

a definitely as one getting So integrated from we return company. are running WBD here

Andrew Slabin

Okay. concludes to time appreciate Thank us. you, and you join formal our the That we taking everybody. remarks today,

Operator

this Quarter Thank the does conclude Warner you. Once Discovery Bros. Call. Conference Earnings Third again, XXXX

this a disconnect your have wonderful time, and at day. line may You

Warner Bros. Discovery (WBD) 7 Nov 242024 Q3 Earnings call transcript