10:29 AM EDT, 08/07/2025 (MT Newswires) -- Warner Bros. Discovery ( WBD ) reported a surprise second-quarter profit as sales topped market estimates, while the media and entertainment giant added more subscribers than expected on sequential and annual bases.

The company posted net income of $0.63 a share for the June quarter, swinging from a loss of $4.07 the year before. The consensus on FactSet was for a GAAP loss of $0.24 per share. Revenue ticked up 1% to $9.81 billion, ahead of the Street's view for $9.77 billion.

"With focus, intent and discipline, we have worked to synthesize and transform each component of (Warner Bros. Discovery ( WBD ))," the company said in a shareholder letter. "As our second quarter results show, we are seeing proof that those transformation efforts are resulting in increased shareholder value."

Warner Bros., which operates the Max streaming service, saw revenue in the streaming and studios segment climb 13% to $5.19 billion. Studios revenue surged 55% while streaming recorded growth of 9%. Global streaming subscribers came in at 125.7 million in the second quarter, above the average analyst estimate of 125.3 million, up from 103.3 million last year and 122.3 million in the previous three-month period.

The company expects a "more pronounced impact" on its streaming business during the second half after restructuring its HBO Max US distribution deal with a former related party, it said in the letter. Distribution revenue growth is projected to be in the low-single-digit range in the ongoing quarter. The impact is anticipated to linger into the first half of next year, but the company expects to see a "reacceleration" in global distribution revenue growth from the second half of 2025 levels over the course of 2026.

In the global linear networks division, revenue fell 9% to $4.8 billion. Distribution revenue dropped 7% amid decreases in domestic linear pay TV subscribers, while advertising slipped 12% driven by domestic audience declines. Content revenue slid 4% due to the timing of third-party licensing deals.

The company forecasts advertising revenue in the global linear networks segment to fall in the ongoing quarter at a "higher rate" than the second quarter due to a lighter sports schedule and the comparison with last year's summer Olympics, among other factors, it said in the shareholder letter. The stock slumped 6.4% in Thursday trade.

In June, Warner Bros. announced plans to split into two independent publicly traded companies, one focused on its streaming and movies business and the other on its television networks portfolio. The split is expected to complete in the middle of next year.

"As we move forward into our next phase as two independent, publicly traded companies, we are confident that both organizations have the assets, strategy, and capabilities necessary to win in a changing landscape," Warner Bros. said Thursday.

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