Company: WBD
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437107-25-000216
Chunk: 17

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 17
---
Transaction and integration costs— 3 — 3 Impairment and amortization of fair value step-up for content— — 440 419 Impairments and loss on dispositions27 5 30 9,159 Operating income (loss)$901 $1,054 $1,985 $(6,612)

Unless otherwise indicated, the discussion of percent changes below is on an ex-FX basis.

42

Revenues

Distribution revenue decreased 8% and 7% for the three and nine months ended September 30, 2025, respectively, primarily attributable to a 9% decline in domestic linear subscribers, and to a lesser extent, lower international affiliate rates and international subscriber declines, partially offset by a 2% increase in domestic affiliate rates for both periods. Declines in linear subscribers are expected to continue.

Advertising revenue decreased 21% and 15% for the three and nine months ended September 30, 2025, respectively, primarily attributable to audience declines in domestic networks of 26% and 25%, respectively, and the broadcast of the Olympics in Europe in 2024.

Content revenue decreased 74% and 36% for the three and nine months ended September 30, 2025, respectively, primarily attributable to the sublicensing of Olympic sports rights in Europe, which had a favorable impact of $578 million on content revenue in 2024.

Other revenue increased 3% and 1% for the three and nine months ended September 30, 2025, respectively.

Costs of Revenues

Costs of revenues decreased 30% and 9% for the three and nine months ended September 30, 2025, respectively, primarily attributable to the broadcast of the Olympics in 2024, partially offset by higher domestic sports costs. Additionally, costs of revenues for the nine months ended September 30, 2025 benefited from timing of content, production, and news related spend. The broadcast of the Olympics in 2024 had unfavorable impacts to costs of revenues of $663 million and $665 million for the three and nine months ended September 30, 2024, respectively.

Selling, General and Administrative

Selling, general and administrative expenses decreased 7% and 4% for the three and nine months ended September 30, 2025, respectively, primarily attributable to lower overhead costs. Additionally, the decrease for the nine months ended September 30, 2025 was partially offset by