Warner Bros. Discovery stock is trading at elevated levels. What should traders watch with WBD?
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Operator
Ladies and gentlemen, welcome to the Warner Brothers discovery fourth quarter and full year 2025 earnings conference call. At this time, all participant lines are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. Additionally, please be advised that today’s conference call is being recorded. I would now like to hand the conference over to Mr. Peter Lee, senior Vice President, Investor Relations. You may now begin.
Peter Lee (Senior Vice President, Investor Relations)
Good morning and thank you for joining us for our Q4 and full year 2025 earnings call. Joining me today from Warner Brothers Discoveries Management is David Zaslav, President and Chief Executive Officer Gunner Wiedenfels, our Chief financial officer and J.B. perrette, CEO and President, Global Streaming and Games. This morning we issued our earnings release, shareholder letter and trending schedule and these materials can be found on our [email protected] Today’s presentation will include forward looking statements that we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform act of 1995. Forward looking statements may include statements about the benefits of the plan separation or the proposed transaction with Netflix, future financial and operating results, future company plans, objectives, expectations and intentions before and after the separation and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations from Warner Brothers Discoveries Management and are subject to significant risks and uncertainties outside of our control that could cause actual results to differ materially from from our current expectations. For additional information on factors that could affect these expectations, please see the company’s filings with the U.S. securities and Exchange Commission, including but not limited to the company’s most recent annual report on Form 10K and its reports on Form 10Q and Form 8K. I will turn the call over to David for some brief remarks after which we will take your questions. Before doing so, I would kindly request that you limit your questions to topics related to our Q4 results and related business and financial topics. As noted in our shareholder letter, management will not be taking questions regarding the Netflix transaction and our discussions with Paramount Skydance. And with that I’ll turn it over to David.
David Zaslav (President and Chief Executive Officer)
Good morning everyone and thank you for joining us. From the beginning we set our goal for Warner Brothers Discovery has been to make this great company the most innovative and exciting place to tell stories in the world. Looking at 2025, it’s clear we fulfilled our ambition. Warner Brothers Motion Picture Group delivered a historic run of success with nine films debuting number one at the box office in 2025, seven consecutive films opening with more than 40 million in box office sales, a first for any studio, and our film spent 16 total weeks atop the global box office. We accomplished this through brilliant original films like One Battle After Another, Sinners, Weapons and global tentpole titles like A Minecraft Movie and Superman. And we revived IP like the Conjuring, Last Rites and Final Destination. Bloodlines. Fans responded and critics did too. Our film slate won nine Golden Globe Awards, including Best Picture, Musical or Comedy for One Battle After Another and cinematic and Box office Achievement for Sinners. Next month, we’re up for an industry leading 30 Academy Awards and we’re optimistic the incredible original films we produced and talent we’ve worked with will deservedly be recognized, and we are seeing momentum continue in 2026. Wuthering Heights, our ninth consecutive theatrical release to open number one, has generated over 160 million at the global box office in two weeks, including an $83 million opening weekend, further reinforcing our commitment to exceptional original storytelling and our position as a premier destination for the world’s leading creative talent. Building on the momentum, our 2027 film slate is set to deliver a truly monumental year for Warner Brothers. With Tentpole and franchise powerhouses on the horizon from Godzilla vs Kong 3, man of Tomorrow, from James Gunn, Minecraft 2, Conjuring, First Communion, Batman Part 2 from Matt Reeves, Gremlins and Lord of the Hunt for Gollum. We also brought innovative and exciting storytelling to television, both in streaming and through our linear networks. So many of the series that shaped global culture in 2025 were delivered to audiences around the world by HBO and HBO Max. Building on shows like the Pit, the White Lotus and the Last of Us, HBO continued to deliver hits in the fourth quarter with several breakout sensations. It welcome to Derry delivered the fourth strongest debut season in HBO history, averaging 27 million viewers per episode, and heated rivalry, which averaged 13 million viewers an episode and drove meaningful social media engagement. That momentum is ongoing. Both the pit and industry have become cultural sensations with their new seasons, which debuted in the first quarter of 2026, seeing 30% and 50% respective audience growth versus their prior season. A Knight of the Seven Kingdoms, the third installment of the Game of Thrones franchise, has also debuted strongly averaging over 24 million viewers per episode and growing with House of the Dragon, Euphoria, the Gilded Age, Dune Prophecy and Hacks returning this year, as well as the premiere of Lanterns and Stuart Fails to Save the Universe. This is just the beginning of what promises to be a banner 2026 for HBO. Our streaming segment also delivered terrific growth. Scaling HBO Max globally has been one of our core priorities for four years we’ve executed our plan with focus and discipline, now exceedingly the 130 million subscriber target we set out in August 2022. Following the successful launches of HBO Max in Germany and Italy and the upcoming launches in the UK and Ireland, we are on track to reach more than 140 million total streaming subscribers by the end of the first quarter, and we’re well on our way to exceed 150 million subscribers by the end of the year. Our Global Linear Networks also continue to create and tell stories that inspire and Entertain fans. With 17 of last year’s top 25 new cable TV series and improved general entertainment viewership trends in recent months, our Global Linear Networks teams clearly remain highly attuned to today’s audiences, while secular headwinds persist. Our portfolio of Networks attracted 30% of all primetime cable viewing in the US and we advanced critical initiatives like the launch of CNN All Access. Encouragingly, we saw a sequential improvement in advertising trends during the fourth quarter, which has continued into Q1. And of course the 2026 Milano Catena Olympic Winter Games, which closed this past Sunday, was a massive success for Warner Brothers Discovery. Over the course of the Winter Games, we saw more than 50% growth in linear hours viewed compared to the 2022 Winter Games, and we more than tripled our streaming audience on HBO Max and Discovery throughout Europe. Four years ago, Warner Brothers was a business in need of transformation. Over that time, we’ve invested aggressively in transforming Warner Brothers Discovery for the future. We invested big in making great original film and television and reignited important legacy Warner Brothers IP like our DC Attack plan which James Gunn and Peter Safran have been executing. Harry Potter, Lord of the Rings, Gremlins together telling stories that have shaped global culture. We invested in streaming technology and turned HBO Max into a world class D2C platform that we have now launched globally in over 100 countries and territories. And we invested in our global networks, evolving our brands, accelerating our digital future and empowering teams to adapt, innovate and continue entertaining audiences worldwide. The result has been a creative renaissance at Warner Brothers Motion Pictures, Warner Brothers Television, DC and HBO and is exemplified by our success in 2025 with the best and most talented people on and behind the screen. Since our Q3 2024 earnings call, when we made clear we were evaluating all paths to unlock value, we have taken decisive actions, first through our corporate reorganization, then announcing the planned separation of Warner Brothers and Discovery Global and ultimately a comprehensive strategic review. Our board continues to lead a rigorous, highly competitive and thorough sales process we engaged with four bidders which led to eight price increases and have thus far achieved a 63% increase in value versus the first offer received in September. Delivering significant value for WBD shareholders. Throughout the process, our focus has and always will be maximizing value and certainty while mitigating downside risks. And the board will evaluate any proposal against that standard with the objective of delivering the best deal for our shareholders. When we started Warner Brothers discovery in April 2022, the WBD stock was around ...
