Warner Bros. Discovery Q2 Results Fall Short with ‘Supergirl’ Contributing to Losses

Warner Bros. Discovery has been working diligently over the past year to assure Wall Street that its streaming strategy can help the company weather significant challenges in other areas of its business. However, this balancing act became increasingly difficult this week as the media giant’s second-quarter results significantly missed analysts’ expectations.

The company is currently navigating a particularly tumultuous period, managing a proposed $110 billion merger with Paramount that remains mired in legal complications, alongside the loss of a media rights deal that has been integral to its advertising business for nearly four decades. These pressures combined with a lackluster theatrical lineup resulted in a quarter that fell well short of projections.

Warner Bros. Discovery reported second-quarter revenue of $8.7 billion, marking an 11% decline from the same period last year and falling short of Wall Street’s anticipated $9.2 billion. Weak box office performance from ‘Supergirl’ and the ongoing absence of NBA broadcasting rights contributed to this decline. Diluted earnings per share were reported at 6 cents, technically surpassing analyst expectations of a loss of 10 cents, but this small positive did little to mitigate the overall revenue miss.

The studio division experienced the most significant impact, with revenue plummeting 39% to $2.3 billion and EBITDA dropping 89% to just $96 million. ‘Supergirl’ was a particularly painful entry in this decline, grossing only $126 million worldwide, the lowest total for any DC release since 2004’s ‘Catwoman’. The film reportedly opened to just $68 million globally against production and marketing costs exceeding $275 million, leading some analysts to estimate a potential loss nearing $150 million.

Adding to the studio’s challenges, this quarter’s theatrical offerings faced harsh comparisons to last year’s releases. The prior-year period featured genuine box office successes like ‘A Minecraft Movie’ and ‘Sinners’, making this year’s lineup of ‘Supergirl’ and ‘Mortal Kombat II’ appear significantly weaker. Overall theatrical revenue dropped 46% year-over-year as a result.

Beyond the studio’s difficulties, the company’s advertising sector suffered a significant decline linked directly to its broadcast portfolio. Total advertising revenue fell 22% from the previous year to $1.7 billion, primarily due to the loss of NBA broadcasting rights after nearly 40 years of partnership, with NBCUniversal now serving as the league’s main media partner. This absence heavily impacted the company’s Global Linear Networks division, where revenue decreased 17% to approximately $4 billion.

On a positive note, streaming remained the one consistently bright spot within an otherwise challenging report. Direct-to-consumer revenue increased by 10% to $3.1 billion, with EBITDA soaring 75% to $512 million, largely driven by HBO Max’s ongoing international expansion and a programming slate that included ‘Euphoria’, ‘House of the Dragon’, ‘Hacks’, and ‘The Pitt’.

The earnings report coincided with WBD’s proposed merger with Paramount, which continues to face legal challenges, with attorneys general from 12 states and the Writers Guild of America pursuing a lawsuit aimed at blocking the deal on antitrust grounds. A trial in this case is scheduled for March 2027, leaving the merger’s future uncertain as both companies continue to report quarterly results as separate entities.

Looking ahead, Warner Bros. Discovery’s film slate for the latter half of 2026 is focused on higher-profile titles including ‘Dune: Messiah’, ‘Practical Magic 2’, and ‘Digger’ starring Tom Cruise, which the studio is likely hoping will help reverse the disappointing theatrical trends from this quarter.

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