Warner Bros. Discovery announced Friday that its streaming business will turn a profit in 2023. The company previously said it expected to break even by 2024 and become profitable in 2025.
“It is an important time for Warner Bros. Discovery. We’ve come through some major restructurings and have repositioned our businesses with greater precision and focus,” CEO David Zaslav said in a statement. “In fact, we now expect our U.S. DTC business to be profitable for 2023 – a year ahead of our guidance. Even in today’s challenging marketplace, we are positioned to drive free cash flow and deleverage our balance sheet, and we remain confident in our strategy and ability to achieve our financial targets.”
The imminent path to profitability is a notable milestone for a company that made drastic moves to reduce costs in order to deal with its overwhelming debt following the $43 billion merger. The company not only cut back on content spending in 2022, including the removal of many shows and movies from HBO Max, but it also laid off hundreds of employees.
The streaming division added 1.6 million subscribers in Q1 and generated $50 million in adjusted EBITDA. Across HBO, HBO Max and Discovery+, the direct-to-consumer segment ended the quarter with 97.6 million global subs, up from 96.1 million in Q4 2022.
HBO Max’s subscriber growth was, in part, driven by the success of HBO’s video game adaptation series “The Last of Us,” which currently has an average of 32 million viewers per episode in the United States, according to WBD. It is also the most-watched show in the history of HBO Max in Europe and Latin America.
On May 23, WBD is launching Max, which will merge Discovery+ content with HBO Max.
Overall, Warner Bros. Discovery earned $10.7 billion in quarterly revenue, which was in line with analyst expectations. However, the company also reported a net loss of $1.07 billion.