This morning, we issued our earnings release, shareholder letter, and trending schedule, and these materials can be found on our website at ir.wbd.com. Both The Pitt and Industry have become cultural sensations with their new seasons, which debuted in the first quarter of 2026, seeing 30% and 50% respective audience growth versus their prior season. Over the course of the Winter Games, we saw more than 50% growth in linear hours viewed compared to the 2022 Winter Games. I guess, do you see any issues with Discovery Global being 3-4 times levered, given the free cash flow dynamics of DG right now?
You know, I'll speak as the CFO here again for a second, the capital structure. Absolutely sustainable, and there is a huge opportunity because as we've shown in the past, we are very well able and willing to leverage the opportunities in our long-dated, low-interest capital structure. Penetration growth in our existing markets, driven by partly the content slate, a sharper marketing focus, social outreach that is strengthening. We announced this partnership with CJ last year on Korean content, which also obviously has a great track record of traveling well.
Certainly, local international content continues to be important, but we don't see a certainly major step change needed to continue to drive our growth. The real fruits will start coming in 27, 28, when we return to some of our biggest franchises, you know, launching in that timeframe and returning to those franchises. As you pointed out, we have done significantly better, and the sequential improvement that you mentioned is after digesting 100 basis points of NBA headwinds in terms of ad sales. You know, as I mentioned earlier, I think, you know, we can see some real stability, potentially even a little bit of growth in ad sales going into 2026.
| Metric | Period | Current guidance |
|---|---|---|
| Total streaming subscribers | End of Q1 2026 | More than 140 million |
| Total streaming subscribers | FY2026 (year-end) | Well on way to exceed 150 million by year-end |
| Discovery Global net leverage | At spin (summer 2026) | Roughly 3.3 times, expected single B to low double B ratings |
| Streaming profit | By 2030 | Internal forecast for streaming profits to roughly triple |
| International ad sales | FY2026 | Flat to slightly up; real stability with potential slight growth |
| Debt allocation to Discovery Global | At spin | Estimate range of 0 to $2 billion; targeting not to move any debt around |
| Metric | YoY | Note |
|---|---|---|
| Domestic advertising | Sequential improvement | New upfront kicked in, good scatter premiums, and strong underlying audience delivery, after digesting 100 bps of NBA headwinds. |
| International advertising | Outperformed relative to U.S. | EMEA, the largest region, continued to do very well; free-to-air presence supports flat-to-slightly-up expectations into 2026. |
| Linear networks viewership | 30% of all U.S. prime-time cable viewing | 17 of last year's top 25 new cable TV series and improved general entertainment viewership across all key networks. |
| Olympics linear hours viewed | Up more than 50% vs. 2022 Winter Games | Strong Milano Cortina Winter Games delivery; streaming audience more than tripled across Europe. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Original content investment | Canceled movies/series down 50-60%; focus on deleveraging and debt repayment | Tripled down on hiring top writers/directors and investing in original films and TV (Sinners, Weapons, One Battle After Another) producing a creative renaissance | — |
| Discovery Global spin-off | Investor concern over leverage and Versant as a comp | Positioned as a global leader with unmatched international scale, ~3.3x sustainable leverage, and growth opportunity via sports, CNN, and discovery+ | — |
| Streaming growth levers | Scaling HBO Max globally as a four-year core priority | Five levers: content slate, volume/penetration, product enhancements, retention/churn, and monetization (price plus nascent ad sales) | — |
| Video games strategy | Distracted across too many IPs and studios; unsuccessful 2024 launches | Reset to proven studios/games/players; 2026 LEGO Batman and Game of Thrones: Dragonfire, with major franchises returning 2027-2028 | — |