Warner Bros. Discovery Reports $2.92 Billion First Quarter Loss

Warner Bros. Discovery reported a net loss of $2.92 billion for the first quarter of 2026, a significant increase from the $453 million loss recorded in the previous year. The deficit was primarily caused by a $2.8 billion termination fee paid to Netflix after the streaming giant withdrew from a bidding war. Additionally, the company incurred $1.3 billion in restructuring and amortization expenses related to its pending acquisition by Paramount.

While the termination fee remains on the books of Warner Bros. Discovery, Paramount agreed to absorb the cost as part of its $81 billion to $110 billion deal to acquire the company. Paramount shareholders approved the takeover in April, and the transaction is expected to close in the third quarter of 2026 following regulatory review.

Despite the overall loss, the company's streaming segment grew 9% to approximately $2.9 billion in revenue, supported by the international rollout of HBO Max. The company currently has 140 million global subscribers and aims to reach 150 million by year-end. Once the merger with Paramount is complete, the combined entity is expected to exceed 220 million streaming subscribers.

CEO David Zaslav described HBO Max as the linchpin of the company's growth strategy. However, analysts cautioned that the lack of NBA content may negatively impact advertising revenue in the second quarter.