Warner Bros. Discovery loses subscribers after Max launch, but shares rise on debt paydown

Warner Bros. Discovery reported second-quarter results Thursday that fell below Wall Street expectations across the board and revealed subscriber totals that were down from the previous quarter.

Global direct-to-consumer streaming subscribers at the end of the period were 95.8 million, below the 96.7 million subscribers analysts were expecting according to StreetAccount, and a decrease of nearly 2 million from the end of the first quarter.

The company launched its combined Max streaming service during the second quarter, merging HBO content with unscripted hits from the Discovery networks into one platform.

Customers dropping their Discovery+ subscriptions for Max was likely to blame for the drop in subscribers. Data provider Antenna estimated that Discovery+ cancellations were up about 68% compared to June 2022 due to the switchover to Max.

Still, shares of Warner Bros. Discovery rose roughly 4% in premarket trading as the company announced a tender off aimed to pay down up to $2.7 billion in debt.

It follows a tender offer from June, which also drove the stock. Paying down its heavy debt load stemming from the 2022 merger of Warner Bros. and Discovery has been a focus as the company looks to return to investment grade status by the end of the year.

Here's what the company reported for the quarter ended June 30, versus analysts' estimates, according to Refinitiv:

• Loss per share: 51 cents vs. 38 cents expected
• Revenue: $10.36 billion vs. $10.44 billion expected

Warner Bros. Discovery reported a net loss of $1.24 billion, or 51 cents per share, a sharp improvement from a net loss of $3.42 billion, or $1.50 per share, a year earlier.

Revenue of $10.36 billion was 5% higher year over year.

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