Warner Bros. Discovery reported its strongest quarterly subscriber gain for the Max streaming platform during the September period, alongside notable net income results. Despite a reduction in revenue, attributed to a softer box office, the company showcased resilience in its subscriber growth metrics. Total revenue for the media and entertainment titan declined by 4% year-over-year for the quarter ending September 30, totaling $9.62 billion, which fell short of the $9.79 billion forecasted by analysts on Capital IQ.
However, net income improved to $0.05 per share from a loss of $0.17 per share a year earlier. Analysts had anticipated a GAAP loss of $0.07, leading to a significant 14% surge in stock prices during Thursday's trading session. "While we continue to confront extraordinary disruption in our environment, the strategy we have undertaken to ready Warner Bros.
Discovery for future success is showing important results," stated Chief Executive David Zaslav. Max saw a net addition of 7.2 million subscribers, marking the strongest quarterly gain since the platform's debut, leading to healthy revenue growth associated with subscribers and setting the stage for achieving financial objectives in its direct-to-consumer segment by 2025.
Zaslav remarked on this success, emphasizing the importance of these metrics. In the third quarter, direct-to-consumer revenue rose by 8%, reaching $2.63 billion, while total subscribers climbed to 110.5 million. Revenue from networks also saw an increase of 3%, totaling $5.01 billion, with content benefits stemming from Olympic broadcasting rights. On a different note, the studios segment faced challenges due to a weaker box office performance, resulting in a 17% downswing in revenue to $2.68 billion.
Theatrical revenue was significantly affected, plummeting by 40%. The company explained that the releases of 'Beetlejuice Beetlejuice' and 'Twisters' performed poorly, particularly when juxtaposed against the prior year's stronger performance with 'Barbie.' "Even in an industry of hits and misses, we must acknowledge that our studios business must deliver more consistency," Zaslav expressed during a conference call with analysts, highlighting ongoing changes aimed at enhancing governance and franchise management within the motion picture studio. Looking forward to the fourth quarter, projections indicate a performance that is expected to align with the previous year's results, despite concerns surrounding the underperformance of 'Joker: Folie a Deux.' Chief Financial Officer Gunnar Wiedenfels provided insights that this musical, featuring Lady Gaga and Joaquin Phoenix, has not resonated well with critics, noting a low rating of 32% on Rotten Tomatoes..