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Warner Bros. Discovery (WBD) reported mixed financial results for Q3 2025, with revenue totaling $9.045 billion, a 6% year-over-year decline that missed the analyst consensus of $9.150 billion. The company posted a net loss of $148 million, compared to a profit of $135 million in the same quarter last year, and an EPS loss of 6 cents, below the expected loss of 4 cents. While the Linear Networks segment faced significant challenges, including a 23% revenue decline and a 17% drop in advertising revenues, the Studios segment showed strong growth with a 23% revenue increase driven by successful box office releases like "Superman" and "Weapons." Adjusted EBITDA for Studios rose to $695 million from $308 million last year. The Streaming segment demonstrated resilience with subscriber growth to 128 million, up from 110.5 million year-over-year, though streaming revenues remained flat at $2.63 billion, and global streaming ARPU declined by 16%. Analysts have highlighted the company's strategic review, including a potential corporate split by 2026, as a key factor influencing valuation. Growth in Studios and Streaming segments could support WBD's ability to meet or exceed its 2025 adjusted EBITDA guidance of $2.4 billion for Studios and $1.3 billion for Streaming. However, challenges such as losing Village Roadshow’s film library derivative rights to Alcon and speculation about a potential acquisition bid by Paramount Skydance add uncertainty. Despite mixed sentiment, several firms have raised their price targets for WBD, citing profitability metrics like a 16.1% net margin and a debt-to-equity ratio of 0.96. While near-term headwinds persist, analysts see potential for long-term growth driven by strategic initiatives and strong performance in key segments.
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About WBD

Warner Bros. Discovery was formed in 2022 through the combination of WarnerMedia and Discovery Communications. In 2026, it intends to split its global networks business from its streaming and studios businesses, forming two separate companies. The ... Read more

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Bullish Option Strategy: Long Calls

Traders buy a single call option on a stock or ETF. This strategy can benefit from a price increase while risking more capital than a spread.

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