Warner Bros. Discovery (WBD) reported disappointing fourth-quarter 2025 financial results on Thursday, February 26, 2026, missing analyst expectations as its traditional linear television business continued to decline sharply. The company posted a net loss of $252 million, or 10 cents per share, which was significantly worse than the 3-cent loss per share forecast by analysts surveyed by FactSet.
Revenue for the quarter fell 6% year-over-year to $9.46 billion, though this figure slightly exceeded the consensus estimate of $9.35 billion. The core of the weakness stemmed from the legacy linear networks division, where adjusted EBITDA plummeted 27% to $1.41 billion. Revenue from the Discovery Linear Networks unit alone dropped 12% to $4.2 billion.
The film and TV studio group also struggled, with adjusted income tumbling 23% to $728 million. The company cited a lack of major theatrical releases in the holiday quarter and unfavorable timing of content renewals for the declines.
A lone bright spot was the streaming segment, anchored by HBO Max. The service added 3.5 million subscribers during the quarter, bringing its global total to 131.6 million. Streaming revenue increased 5% to nearly $2.8 billion, driven by popular new content like the series "Heated Rivalry" and "It: Welcome to Derry."
However, the earnings report was largely secondary to the escalating takeover battle for the media giant. WBD is currently weighing two competing offers. In December, the company agreed to sell its streaming and studios business to Netflix for $27.75 per share, with plans to spin off its cable assets to existing shareholders.
This deal was challenged last week by a rival consortium, Paramount Skydance, which floated a potential higher cash offer of $31 per share for the entire company. WBD's board has acknowledged that the Paramount bid "could reasonably be expected" to lead to a superior proposal, triggering a formal review process.
Paramount has argued that WBD's linear cable assets hold little to no equity value, a point of contention in the valuation debate. If the board formally deems Paramount's offer superior, Netflix would have a four-business-day window to revise its bid. In a related development, Netflix CEO Ted Sarandos was scheduled to visit the White House on Thursday to discuss his company's bid, according to a Politico report.
WBD shares showed little direction in premarket trading following the earnings release, edging up just 0.1% to $28.91, as investors await the outcome of the high-stakes acquisition contest.
