WBD's Streaming Crosses Into Profitable Scale While the Studio Awaits Its 2027 Tent-Pole Bumper Crop

HBO Max books a $3B-revenue quarter and $512M of EBITDA, but a thin 2026 film slate and a pending Paramount sale keep the consolidated story binary.

WBD · Earnings Call · 2026-08-06

Streaming finally swings to scale

The headline of this quarter belongs to HBO Max. In prepared remarks, David Zaslav flagged the milestone:

In Q2, our Streaming segment delivered more than $3 billion in revenues for the first time ever... streaming generated $512 million in adjusted EBITDA, a more than 60% EBITDA improvement over the same period in 2025 and a nearly 17% adjusted EBITDA margin.
David Zaslav, President and Chief Executive Officer · 2026-08-06

That is the realization of a turnaround management has been telegraphing for four years. On the May call, JB Perrette framed it as “we were losing $2 billion. We're now -- we made $1.4 billion last year” — Jean-Briac Perrette, CEO and President, Global Streaming and Games · 2026-05-06. Now the segment is running at roughly a 17% EBITDA margin with distribution growth reaccelerating: subscriber-related revenue grew 10% ex-FX, and management noted that ex a related-party deal, distribution growth would have been in the low teens. The engine is HBO's slate — A Knight of the Seven Kingdoms, The Pitt, House of the Dragon and Euphoria each averaging 25M+ global viewers an episode, with 150 Emmy nominations leading the industry.

The studio admits a miss and points at 2027

Where streaming delivered, the studio disappointed — the call's biggest tension. Q2 2025 was a monster comp (Sinners, Minecraft, a big internal licensing deal). This year a handful of films underperformed, and linear advertising fell ~30% with the NBA exit. Analysts pressed Gunnar Wiedenfels on the path back to the studio's $3B EBITDA goal:

I have 0 doubts about our long-term $3 billion EBITDA target for the studio. ... Number one, the quarter, obviously, in the film business wasn't what we expected.
Gunnar Wiedenfels, Chief Financial Officer · 2026-08-06

Management's answer is a deliberate ramp in tent-pole volume: 14 films this year to “ramping up to 19 next year, and we're very confident that we're going to be able to maintain that larger number” — Gunnar Wiedenfels, Chief Financial Officer · 2026-08-06. David Zaslav named the 2027 lineup — “next year, we're going to have Lord of the Rings, Batman, Superman, Minecraft 2” — David Zaslav, President and Chief Executive Officer · 2026-08-06 — plus a 10-year commitment to “greenlit Harry Potter for the next 10 consecutive years” — David Zaslav, President and Chief Executive Officer · 2026-08-06, with the first three episodes already screened and a Christmas Day debut. The broader logic remains that the studio is really a library licensing engine with new creative replenishing it — and the under-monetized catalog is now feeding HBO Max instead of being sold off. A year ago, Gunnar told analysts “we have put a 10-digit figure of value in terms of intercompany profits parked on the balance sheet. That's going to come back into the P&L over the next few years” — Gunnar Wiedenfels, Chief Financial Officer · 2025-08-07. This quarter he doubled down: healthy licensing demand, great margins, "a library-driven content licensing business" that the film, TV, games and consumer product arms replenish.

The binary: deal and cash

Underneath it all sits a company still generating deep reported losses. Operating income was -$3.1B in the March quarter (a -35% margin), and free cash flow was -$628M against roughly $29B of net debt. That is last quarter's P&L — one quarter behind — but it frames why the streaming EBITDA and the Paramount Skydance sale matter so much. Asked about a worst-case if the deal falls through, management refused to engage: "we're confident this transaction will close." The market has begun re-pricing the story well ahead of the P&L. Price-to-revenue has jumped 167% year-over-year to ~1.9x despite flat headline revenue — a classic deal-and-turnaround re-rating. Yet the stock is still 63% below its 2021 peak and up just 4% over the past 90 days. The tension: streaming inflection is real, but the studio cycle and the ~30% linear-ad decline keep the consolidated numbers binary. There's also a fresh confluence worth flagging — the tape is full of World Cup mentions this week (HST's "non-World Cup markets," FUBO's subscriber benefits, PENN's engagement), and WBD explicitly cited the event as a crowding-out factor on Q2 linear ad demand. That's a shared macro headwind the streaming and sports assets are only partially absorbing. The watch item into the close is whether original content and the big tentpoles (LOTR, Batman, Superman, Minecraft 2, Harry Potter) can deliver the EBITDA bridge the film business needs.