Warner Bros. Discovery reported its Q2 2023 earnings, revealing a drop of 1.8 million total streaming subscribers across HBO Max, Discovery+ and the new service Max.
The company now has 95.8 million streaming subscribers globally, down from 97.6 million in Q1. The loss is attributed mainly to account overlaps, as some customers canceled extra subscriptions after merging HBO Max and Discovery+ into Max.
Max launched in May. And WBD's streaming president, J.B. Perrette, stated that 70% of existing HBO Max subscribers moved over to the new platform in the first week. Discovery+, however, lost subscribers during the transition.
The Q2 period covers April 1 to June 30, so Max's results were only a partial factor. The upcoming Q3 report will fully reflect Max's impact. Total Q2 revenues were $10.36 billion, slightly below forecasts of $10.46 billion.
Warner Bros. Discovery saw a net loss of $1.24 billion, increased from $1.07 billion last quarter. The company has paid down $9 billion in debt since the merger, including $1.6 billion in Q2.
Max now also offers live sports and news streaming, though details are still limited. WBD previously predicted U.S. streaming would turn a profit this year, but it remains to be seen how the merger and Max transition will impact that timeline.
In earning call report, Warner Bros. Discovery CEO David Zaslav said:
We remain bullish with respect to our delevering story and expect to be comfortably below 4.0x levered by the end of the year and at our target of 2.5-3.0x gross leverage by the close of 2024. [It] is tracking well ahead of our financial projections, having generated positive EBITDA in the first half of the year.
The earnings report provides key insights into how WBD is progressing after merging HBO Max and Discovery+, as investors watch closely to gauge Max's success. While streaming subscriptions dipped post-merger, WBD expressed confidence in the ongoing Max rollout.