Warner Bros. Discovery announced Friday that its streaming business will turn a profit in 2023. The company previously said it expected to break even in 2024 and become profitable in 2025.
“It’s an important time for Warner Bros. Discovery. We’ve been through some major restructuring and repositioned our businesses with greater precision and focus,” CEO David Zaslav said in a statement. “In fact, we now expect our US DTC business to be profitable for 2023 – a year ahead of our expectation. Even in today’s challenging market, we are positioned to drive free cash flow and reduce our balance sheet, and remain confident in our strategy and ability to achieve our financial goals.”
The impending road to profitability is a remarkable milestone for a company that has taken drastic measures to reduce costs to pay off its overwhelming post-merger debt of $43 billion. Not only did the company cut back on content spending in 2022, which included removing many shows and movies from HBO Max, but it also laid off hundreds of employees.
The streaming division added 1.6 million subscribers in the first quarter and generated $50 million in adjusted EBITDA. In HBO, HBO Max and Discovery+, the direct-to-consumer segment ended the quarter with 97.6 million global subscribers, up from 96.1 million in Q4 2022.
HBO Max’s subscriber growth was in part due to the success of HBO’s video game adaptation series “The Last of Us,” which currently averages 32 million viewers per episode in the United States, according to WBD. It is also the most watched show in HBO Max history in Europe and Latin America.
On May 23, WBD Max launches, which will merge Discovery+ content with HBO Max.
In total, Warner Bros. Discovery posted $10.7 billion in quarterly revenue, in line with analyst expectations. However, the company also reported a net loss of $1.07 billion.