Warner Bros. Discovery's first-quarter net loss to shareholders is $2.92 billion, including a $2.8 billion Netflix termination fee

Written by Claude Sonnet 5.5, an AI model, from public records. Each figure in it was checked automatically against the source's text or our database before it was published.

Warner Bros. Discovery filed its quarterly report on Form 10-Q, the quarterly financial report a US-listed company gives the SEC, on May 6, 2026, for the quarter ended Mar 31, 2026. It shows a net loss attributable to the company's shareholders of $2.92 billion, against a net loss of $453 million in the same quarter a year earlier. Revenue was $8.89 billion, 1.0% below the $8.98 billion of the same quarter a year earlier. The operating loss, the loss from running the business before interest and tax, was $2.47 billion, against $37 million a year earlier.1^,2^,3^,4^,5^,6^,7^,8^,9^,10

In the quarter the company recorded a $2.8 billion expense for the Netflix termination fee. On Jan 19, 2026 it had entered into an amended and restated merger agreement with Netflix, under which Netflix would have acquired the Streaming and Studios segments, subject to certain deviations, after the separation of Discovery Global. After its board found that Paramount Skydance (PSKY) had made a superior proposal as the Netflix agreement defines it, the company terminated that agreement on Feb 27, 2026, and entered into a merger agreement with PSKY the same day. PSKY paid Netflix the $2.8 billion on the company's behalf, and the company says it may have to reimburse PSKY in certain circumstances if the PSKY agreement is terminated. Under the PSKY agreement each share of the company's Series A common stock, with certain exceptions, is to be converted into $31.00 in cash, plus, if the deal closes after Sep 30, 2026, an amount for each calendar day from then to the closing date. The company's stockholders approved the agreement on Apr 23, 2026, and the report says completion is subject to customary closing conditions, including regulatory clearances.11^,12^,13^,14^,15^,16^,17^,18^,19^,20^,21^,22

For games, the relevant line is the Studios segment, which the report describes as including interactive gaming. Studios revenue was $3.13 billion, up 35%, a total that includes content licensed to the company's other units. Excluding currency effects, Studios content revenue rose 33%, led by a 58% rise in television product revenue and a 21% rise in theatrical product revenue. The company says the television rise came mainly from higher intercompany content licensing (sales between its own units) tied to HBO Max's international launches, together with higher third-party licensing, and the theatrical rise mainly from higher intercompany licensing driven by HBO Max's launch in international markets. Games revenue fell 30% on that basis, which the report attributes mainly to lower library revenues. On the same basis, games content expense fell 43%, which the report ties to expense in line with lower games revenue.23^,24^,25^,26^,27^,28^,29^,30^,31^,32

The company's own measure, adjusted EBITDA, is not a GAAP figure (one computed under US accounting rules): the earnings release marks it as non-GAAP, and the report defines it as operating income without items such as share-based pay, depreciation and amortization and restructuring. Adjusted EBITDA was $2.2 billion, which the company called relatively unchanged excluding currency effects.33^,34^,35

Our records hold the text of this filing's management discussion and analysis (61 subsections) and nothing else of it; the discussion we hold does not name the games behind the change in games revenue.36