Warner Bros. Discovery, Inc.

Ladies and gentlemen, welcome to the Warner Brothers Discovery Fourth Quarter 2024 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Additionally, please be advised that today's conference call is being recorded. I would now like to hand the conference over to Mr. Andrew Slabin, Executive Vice President, Global Investor Strategies. Sir, you may now begin.

Good morning, and thank you for joining us for Warner Brothers Discovery's Q4 earnings call. Joining me today is David Zaslav, President and Chief Executive Officer, Guna Videnfels, Chief Financial Officer, and J.B. Perret, CEO and President, Global Streaming and Gains. Earlier this morning, we released our Q4 earnings results, trending schedule, as well as accompanying shareholder letter. We will begin this morning with some very brief remarks by David, and then turn the call right to Q&A. Today's presentation will include forward-looking statements that we made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may include comments regarding the company's future business plans, prospects, and financial performance, and involve risks and uncertainties that could cause actual results to differ materially from our expectations. For additional information on factors that could affect these expectations, please see the company's filings with the U.S. Securities and Exchange Commission, including but not limited to the company's most recent annual report on Form 10-K and its reports on Form 10-Q and Form 8-K. In addition, we will discuss non-GAAP financial measures on this call. Reconciliations of these non-GAAP financial measures to the closest GAAP financial measure can be found in our earnings release and in our trending schedules. which can be found in the investor relations sections of our website. And with that, I'm pleased to turn the call over to David.

Good morning, everyone, and thank you for joining us. Two and a half years ago, when we brought Warner Brothers Discovery together, our vision was to combine Discovery's leading position as a global force in media and entertainment with local content and local sports, alongside the iconic storytelling brands, IP, and libraries of Warner Brothers and HBO. This powerful combination is a unique, compelling offering that we believe would resonate with consumers worldwide. It was the strategic guts of our transaction. Our direct-to-consumer business ended 2024 with about 117 million subscribers across more than 70 countries And we still have nearly half the world to go with many key markets like the UK, Italy, Germany, and Australia launching over the next few years. We added about 6.5 million subscribers in the fourth quarter and nearly 20 million subscribers in less than a year. Max continues to grow at a powerful pace, and we expect it to continue throughout 2025 and beyond. In this generational media disruption, only the global streamers will survive and prosper. And Max is just that. With the launch of Max internationally in 2024, we now have a global subscription business that is growing subs, revenue, and EBITDA. We have a clear, demonstrable path to at least 150 million subscribers by the end of 2026. fueling further revenue and EBITDA growth. MAX is one of the world's very few global and profitable streaming services. Our direct-to-consumer business contributed almost $700 million in EBITDA, a $3 billion improvement in just two years. And we expect direct-to-consumer EBITDA to nearly double in 2025. As I mentioned in our last earnings call, we are laser focused on getting our studios back to a place of industry leadership and generating 3 billion or more in EBITDA. We are showing growth and real strength in our Warner Brothers television business, which I believe is the highest quality and largest maker of TV content in the world. We are excited about our studio's creative and financial outlook this year and beyond. particularly all that's coming from Warner Brothers Pictures and DC Studios kicking off with the release of Superman this July. Despite the headwinds facing linear television, we recently struck a flurry of multi-year renewal agreements with five of the six largest ATV providers in America, many of which were a year early and all of which commanded overall rate increases. These long-term deals provide real security and stability to our linear business. Finally, we've been hard at work and have made real progress implementing the reorganization we announced in December, which went into effect on January 1st. This new structure will provide investors with better visibility to the strength of our streaming and studios business and will give us real strategic value and optionality into the future. 2024 marked a year of significant progress in transforming Warner Brothers Discovery, laying the foundation for what's next and positioning us as a global media leader committed to providing shareholders with sustainable future growth. We remain fully focused on enhancing shareholder value and welcome your questions.