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Can WBD's Studio Business Emerge as the Core Engine of EBITDA Growth?
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Key Takeaways
Studios' revenues surged 55% year over year in the second quarter of 2025 to $3.8 billion.
WBD expects Studios' EBITDA to top $2.4 billion in 2025, advancing toward its $3 billion target.
New DC titles and blockbuster releases are driving renewed franchise strength.
Warner Bros. Discovery’s (WBD - Free Report) Studio segment, comprising Warner Bros. Motion Pictures, DC Studios and Warner Bros. Television, is the creative backbone of the company’s entertainment ecosystem. The division develops, produces and distributes films, television series and games, driving both theatrical revenues and high-margin licensing income across internal and third-party platforms.
In the second quarter of 2025, Studios' revenues climbed 55% year over year to $3.8 billion, while adjusted EBITDA soared 311% to $863 million, highlighting robust operating leverage. The rebound was fueled by theatrical blockbusters such as A Minecraft Movie, Sinners and Final Destination: Bloodlines, which together delivered more than $2 billion in global box office receipts, supported by DC Studios’ Superman reboot, which opened at $220 million worldwide. Increasing internal content licensing to HBO Max and other WBD units also contributed to segment profitability.
WBD expects the Studios segment to generate over $2.4 billion in Adjusted EBITDA for 2025, progressing toward its medium-term goal of exceeding $3 billion as it scales a 12-14-film annual slate and broadens global licensing. The Zacks Consensus Estimate for third-quarter 2025 Studios adjusted EBITDA stands at $2.46 billion, up 23.6% year over year, likely to be driven by consistent box-office momentum, expanding content licensing and steady television output.
The revitalised DC Studios franchise adds further earnings potential. Superman’s $220 million global opening validates the creative reboot, while Warner Bros. Television’s 60 Emmy nominations and rising SVOD pipeline support diversified revenue. With consumer-products revenues still only 30 cents per dollar of peer levels, WBD’s push into merchandising, licensing and experiential tie-ups could meaningfully lift margins, reinforcing the Studio division’s role as the company’s key EBITDA growth engine.
WBD Faces Stiff Competition
Warner Bros. Discovery is facing stiff competition from Netflix (NFLX - Free Report) and Walt Disney (DIS - Free Report) , as both are intensifying their focus on studio profitability through disciplined content investment and cost control. Netflix continues to expand its global production slate and leverage localised content to sustain EBITDA growth, while Walt Disney is optimising its studio pipeline across Pixar, Marvel and 20th Century to stabilise margins and drive franchise monetisation. Both Netflix and Walt Disney are prioritising operational efficiency and library utilisation strategies closely aligned with Warner Bros. Discovery’s emphasis on scaling creative IP while building a more resilient, high-margin studio portfolio.
From a valuation standpoint, WBD stock is currently trading at a forward 12-month price/sales ratio of 1.25X compared with the industry’s 4.79X. WBD has a Value Score of B.
WBD’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WBD’s third-quarter 2025 loss is pegged at 6 cents per share, which has improved by 2 cents over the past 30 days, indicating a decline from the year-ago quarter’s profit of 5 cents per share.
Image: Bigstock
Can WBD's Studio Business Emerge as the Core Engine of EBITDA Growth?
Key Takeaways
Warner Bros. Discovery’s (WBD - Free Report) Studio segment, comprising Warner Bros. Motion Pictures, DC Studios and Warner Bros. Television, is the creative backbone of the company’s entertainment ecosystem. The division develops, produces and distributes films, television series and games, driving both theatrical revenues and high-margin licensing income across internal and third-party platforms.
In the second quarter of 2025, Studios' revenues climbed 55% year over year to $3.8 billion, while adjusted EBITDA soared 311% to $863 million, highlighting robust operating leverage. The rebound was fueled by theatrical blockbusters such as A Minecraft Movie, Sinners and Final Destination: Bloodlines, which together delivered more than $2 billion in global box office receipts, supported by DC Studios’ Superman reboot, which opened at $220 million worldwide. Increasing internal content licensing to HBO Max and other WBD units also contributed to segment profitability.
WBD expects the Studios segment to generate over $2.4 billion in Adjusted EBITDA for 2025, progressing toward its medium-term goal of exceeding $3 billion as it scales a 12-14-film annual slate and broadens global licensing. The Zacks Consensus Estimate for third-quarter 2025 Studios adjusted EBITDA stands at $2.46 billion, up 23.6% year over year, likely to be driven by consistent box-office momentum, expanding content licensing and steady television output.
The revitalised DC Studios franchise adds further earnings potential. Superman’s $220 million global opening validates the creative reboot, while Warner Bros. Television’s 60 Emmy nominations and rising SVOD pipeline support diversified revenue. With consumer-products revenues still only 30 cents per dollar of peer levels, WBD’s push into merchandising, licensing and experiential tie-ups could meaningfully lift margins, reinforcing the Studio division’s role as the company’s key EBITDA growth engine.
WBD Faces Stiff Competition
Warner Bros. Discovery is facing stiff competition from Netflix (NFLX - Free Report) and Walt Disney (DIS - Free Report) , as both are intensifying their focus on studio profitability through disciplined content investment and cost control. Netflix continues to expand its global production slate and leverage localised content to sustain EBITDA growth, while Walt Disney is optimising its studio pipeline across Pixar, Marvel and 20th Century to stabilise margins and drive franchise monetisation. Both Netflix and Walt Disney are prioritising operational efficiency and library utilisation strategies closely aligned with Warner Bros. Discovery’s emphasis on scaling creative IP while building a more resilient, high-margin studio portfolio.
WBD’s Share Price Performance, Valuation & Estimates
WBD shares have jumped 80.6% in the year-to-date period, outperforming both the Zacks Consumer Discretionary sector’s rise of 7.9% and the Zacks Broadcast Radio and Television industry’s growth of 27.4%.
WBD’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, WBD stock is currently trading at a forward 12-month price/sales ratio of 1.25X compared with the industry’s 4.79X. WBD has a Value Score of B.
WBD’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WBD’s third-quarter 2025 loss is pegged at 6 cents per share, which has improved by 2 cents over the past 30 days, indicating a decline from the year-ago quarter’s profit of 5 cents per share.
Warner Bros. Discovery, Inc. Price and Consensus
Warner Bros. Discovery, Inc. price-consensus-chart | Warner Bros. Discovery, Inc. Quote
WBD currently holds a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.