Warner Bros. Discovery (NASDAQ: WBD) reported higher-than-expected fourth-quarter core earnings, stating it is “well positioned” for long-term success as it evaluates competing takeover proposals from Paramount Skydance and Netflix.
The company reiterated that its existing merger agreement with Netflix remains in place. However, the board determined that a revised offer from Paramount “could reasonably be expected” to result in a superior proposal.
Earlier in the week, Paramount raised its bid to $31 per share for Warner Bros., intensifying efforts to acquire the media group, which owns major franchises including “Harry Potter” and “Game of Thrones.” As part of the updated offer, Paramount increased the termination fee payable if regulatory approval is not obtained to $7 billion from $5.8 billion.
According to Bloomberg News, the revised proposal was designed to disrupt Warner Bros.’s current agreement with Netflix. If Warner Bros.’s board determines Paramount’s offer to be superior, Netflix would have four days to respond.
Netflix has offered $27.75 per share for Warner Bros.’s studios and HBO Max streaming business, while Warner Bros. is pursuing a plan to spin off its traditional television operations into a separate entity. Paramount’s proposal, in contrast, covers the entire company.
Warner Bros. stated it would not address questions regarding the takeover discussions during its post-earnings analyst call.
For the quarter, adjusted core earnings before interest, taxes, depreciation, and amortization totaled $2.22 billion, down 19% from the prior year but exceeding Bloomberg consensus estimates of $2.11 billion.
Revenue declined 5.7% to $9.46 billion, though the figure surpassed expectations.
The studios segment was described as the “clear standout” in 2025, delivering a 52% year-over-year increase in core profit to $2.55 billion, excluding currency effects. Management noted early momentum in the division this year, citing the box office performance of the recent release “Wuthering Heights.”
Streaming subscribers totaled nearly 132 million, exceeding the 130 million target established in August 2022. Strength in Germany and Italy, along with planned launches in the U.K. and Ireland in March, is expected to lift subscribers above 140 million by the end of the current quarter, progressing toward a target of more than 150 million by the end of 2026.
