Warner Bros. Discovery Inc - Ordinary Shares - Class A

Streaming turnaround is real (key positive): In Q2 2026, Streaming revenue exceeded $3B for the first time ever; subscriber-related revenue growth accelerated ~200 bps sequentially to 10% ex-FX. Streaming also generated $512M adjusted EBITDA, >60% improvement vs Q2 2025 and ~17% adjusted EBITDA margin—evidence HBO Max’s global strategy is now financially meaningful rather than loss-making.

Content pipeline supports continued subscriber growth (outlook/expectations): Management expects momentum to continue with strong HBO slate strength—The Pitt, A Knight of the Seven Kingdoms, House of the Dragon, Euphoria each averaging ≥25M global viewers/episode (several >30M). 2027 described as “arguably our best year yet” with White Lotus returning, The Last of Us returning, A Knight of the Seven Kingdoms repeating/freestanding success, plus Gilded Age and upcoming debuts like Lanterns and Harry Potter (10-year run) launching (Christmas Day). Opportunity: monetization + engagement should keep supporting distribution/subscriber trends.

Distribution growth strength; international growth partly offsets cyclical advertising pressure (good + surprising): JB Perrette said that even excluding a related-party deal, distribution growth would have been in the low teens, implying the core machine is working. Zaslav emphasized HBO Max global growth is “outrunning the decline” in a number of countries, though not uniformly everywhere. Surprising/important: they point to churn/retention improving dynamics tied to bundling and content consistency (see next bullet).