Company: WBD
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437107-25-000096
Chunk: 11

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 2
Chunk 11
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 prior year performance of Dune: Part Two and Godzilla x Kong: The New Empire, which were released in the first quarter of 2024, as well as higher carryover from releases in the fourth quarter of 2023 compared to the fourth quarter of 2024. The decrease in home entertainment revenue was primarily due to the strong prior year performance of Wonka and Aquaman 2.

•The decrease in games revenue was attributable to the prior year release of Suicide Squad: Kill the Justice League, which was released in the first quarter of 2024, and carryover from Hogwarts Legacy and Mortal Kombat 1, which were released in 2023, compared to no releases in the first quarter of 2025.

•The increase in television product revenue was attributable to higher intercompany content sales, partially offset by lower initial telecast revenue due to timing of deliveries in the current year.

Other revenue decreased 7% for the three months ended March 31, 2025.

35

Costs of Revenues

Costs of revenues decreased 29% for the three months ended March 31, 2025, primarily attributable to a 41% decrease in theatrical product content expense and a 66% decrease in games content expense. The decrease in theatrical content expense was a result of lower film costs commensurate with lower theatrical product revenue and lower payments to partners and participants. The decrease in games content expense was primarily due to a $187 million impairment related to Suicide Squad: Kill the Justice League in the prior year, and lower games content expense commensurate with lower games revenue.

Selling, General and Administrative

Selling, general and administrative expenses increased 5% for the three months ended March 31, 2025, primarily attributable to higher overhead expenses, partially offset by lower games marketing expenses.

Adjusted EBITDA

Adjusted EBITDA increased 63% for the three months ended March 31, 2025. 

Global Linear Networks Segment

The table below presents, for our Global Linear Networks segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (in millions).

 Three Months Ended March 31, 20252024% Change% Change (ex-FX)Revenues:Distribution$2,558 $2,797 (9)%(8)%Advertising1,758 1,987 (12)%(11)%Content380 264 44 %44