Discovery, Inc. 8-K

Summary

Q2 2026 results with forward outlook. Revenue fell 11% Y/Y, primarily on lower advertising and content revenue; the absence of the NBA weighed on advertising, while lower theatrical revenue drove the Studios content decline. Net income available to WBD fell sharply, partly reflecting a $2.96B debt-extinguishment gain in the prior-year quarter. WBD also refinanced its $15B bridge facility and said the Paramount merger closing is on hold until the earlier of five days after legal proceedings conclude or 6/1/2027.

Key Figures

• Revenue declines in advertising (-22%) and content (-26%) offset 1% growth in distribution. Advertising was hurt by the absence of the NBA, which reduced its Y/Y growth rate by 20 percentage points; lower theatrical revenue drove the Studios segment’s 39% revenue decline.
• Streaming revenue rose 10% to $3.08B and Adjusted EBITDA increased 75% to $512M; Studios Adjusted EBITDA fell 89% to $96M, while Global Linear Networks Adjusted EBITDA declined 4% to $1.45B. The prior-year debt-extinguishment gain and $1.1B of current-quarter pre-tax acquisition-related amortization, content fair value step-up, and restructuring expenses affected the net income comparison.
• Q2 free cash flow was unfavorably affected by ≈$350M of separation and transaction-related items, vs ≈$250M a year earlier. WBD ended the quarter with $3.4B cash, $33.1B gross debt, $29.7B net debt, and 3.4x net leverage. It repaid the $15B bridge facility with $13B of Term Loan B and €1.7B of Term Loan B, priced at SOFR + 250 bp and EURIBOR + 250 bp, respectively; WBD expects ≈150 bp of annual interest-cost savings vs the original bridge financing. Outstanding debt had an 8.3-year weighted-average maturity and 5.2% weighted-average cost.

Guidance

Investor Takeaways

• Watch whether streaming subscriber-related revenue growth accelerates in H2 2026 and supports progress toward the long-term 20%+ Adjusted EBITDA margin target.
• Watch for the stated high-single-digit FY2026 operating expense improvement in Global Linear Networks.
• The merger closing timeline depends on completion of legal proceedings, with the stated hold lasting until the earlier of five days afterward or 6/1/2027.