Second Quarter Driven by Strong Theatrical Releases
Warner Bros. Discovery reported a significant increase in second-quarter earnings, fueled by the strong performance of several major film releases. Titles such as “A Minecraft Movie,” “Sinners,” “Final Destination: Bloodlines” and “F1” collectively grossed $2 billion globally at the box office during the quarter. The company’s studios segment posted $3.8 billion in revenue, a 55% year-over-year increase, with theatrical revenue up 38% excluding foreign exchange effects.
Adjusted EBITDA for the studios segment rose sharply to $863 million from $210 million a year earlier. Warner Bros. Discovery credited the turnaround to strategic leadership changes and a reinvigorated content slate, positioning the studio segment for continued growth in the second half of the year.
Strategic Rebuilding of Film Operations
Since the 2022 merger between Warner Bros. and Discovery, executives have prioritized revitalizing the motion picture division. CEO David Zaslav highlighted leadership changes, including the appointments of James Gunn and Peter Safran as heads of DC Studios, and Michael De Luca and Pam Abdy as co-heads of Warner Bros. Motion Pictures. These moves followed a period of disruption caused by pandemic-related theater closures and industry-wide labor strikes in 2023.
Zaslav acknowledged the division’s former struggles, stating, “We were in last place,” but noted that recent progress has moved Warner Bros. closer to the top of the industry. He added that the studio is aiming to release two to three tentpole films per year, leveraging franchises such as “Harry Potter” and “Lord of the Rings” to maintain momentum and revenue stability.
Upcoming Releases and Franchise Expansion
While the second quarter ended before the release of “Superman,” its strong debut — $220 million globally in its opening weekend — is expected to boost third-quarter results. Combined with Apple’s “F1,” which Warner Bros. distributed, the two films had surpassed $500 million in global ticket sales by late July.
Looking ahead, the company plans to expand its franchise offerings. Zaslav confirmed that director Peter Jackson has completed a new script for an upcoming “Lord of the Rings” installment. Development is also underway on the next phase of the “Superman” universe, which will form part of the broader DC Studios roadmap.
Corporate Restructuring and Financial Outlook
Despite the strong quarter, the studio division is not immune to broader cost-cutting measures. In July, Warner Bros. Motion Picture Group announced a 10% reduction in staff. The company is also undergoing a significant restructuring. By 2026, Warner Bros. Discovery plans to split into two independent units: Warner Bros., which will include the studios and streaming platform Max, and Discovery Global, encompassing TV networks, Discovery+, and the sports portfolio.
Company-wide, Warner Bros. Discovery reported total revenue of $9.81 billion for the second quarter, a 1% increase year over year. Adjusted EBITDA rose 9% to $1.95 billion. The company expects the studios segment alone to generate at least $2.4 billion in adjusted EBITDA for the full year, moving closer to its long-term goal of exceeding $3 billion annually.
