Warner Bros. Discovery’s Q2 Just Took a Beating, and ‘Supergirl’ Shares Plenty of the Blame

Warner Bros. Discovery has spent the past year trying to convince Wall Street that its streaming pivot can carry the company through some genuinely rough patches elsewhere in its business. That balancing act got a lot harder this week, as the media giant’s second-quarter results landed well short of what analysts had been expecting.

The company has been navigating a particularly turbulent stretch, juggling a proposed $110 billion merger with Paramount that remains tied up in legal limbo, along with the loss of a media rights deal that had defined its advertising business for nearly four decades. Both of those pressures collided directly with a disappointing theatrical slate to produce a quarter that fell noticeably short of projections.

Warner Bros. Discovery reported second-quarter revenue of $8.7 billion, an 11% decline from the year-ago period and well below Wall Street’s expectation of $9.2 billion, with weak box office performance from ‘Supergirl‘ and the continued absence of NBA broadcasting rights dragging results down. Diluted earnings per share came in at 6 cents, technically beating analyst expectations of a loss of 10 cents, though that modest bright spot did little to offset the broader revenue miss.

The studio division bore the brunt of the disappointment, with revenue tumbling 39% to $2.3 billion and EBITDA plummeting 89% to just $96 million. ‘Supergirl’ proved to be a particularly painful entry in that decline, grossing only $126 million worldwide, the lowest total for any DC release since 2004’s ‘Catwoman’. The film reportedly opened to just $68 million globally against production and marketing costs exceeding $275 million, prompting some analysts to estimate a potential loss approaching $150 million.

Compounding the studio’s struggles, the quarter’s theatrical slate faced brutal comparisons against last year’s releases. The prior-year period had included genuine box office hits like ‘A Minecraft Movie’ and ‘Sinners’, making this year’s lineup of ‘Supergirl’ and ‘Mortal Kombat II’ look considerably weaker by comparison. Theatrical revenue overall dropped 46% year-over-year as a result.

Beyond the studio’s woes, the company’s advertising business took a substantial hit tied directly to its broadcast portfolio. Total advertising revenue plunged 22% from the year-ago period to settle at $1.7 billion, with the primary culprit being the loss of NBA broadcasting rights after nearly 40 years of partnership, as NBCUniversal took over as the league’s primary media partner instead. That absence weighed heavily on the company’s Global Linear Networks division, where revenue slid 17% to roughly $4 billion.

Streaming remained the one consistently positive story buried inside an otherwise difficult report. Direct-to-consumer revenue climbed 10% to $3.1 billion, with EBITDA jumping 75% to $512 million, driven largely by HBO Max’s continued international expansion and a programming slate that included ‘Euphoria’, ‘House of the Dragon’, ‘Hacks’, and ‘The Pitt’.

The earnings report arrived just as WBD’s proposed merger with Paramount continues facing legal headwinds, with attorneys general from 12 states and the Writers Guild of America pursuing a lawsuit aimed at blocking the deal on antitrust grounds. A trial in that case has been scheduled for March 2027, meaning the merger’s fate remains far from settled even as both companies continue reporting quarterly results as separate entities.

Looking ahead, Warner Bros. Discovery’s film slate for the back half of 2026 leans on higher-profile titles including ‘Dune: Messiah’, ‘Practical Magic 2’, and ‘Digger’ starring Tom Cruise, which the studio is likely hoping can help reverse this quarter’s disappointing theatrical trend.

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