Warner Bros. Discovery (NASDAQ:WBD) reported fourth-quarter earnings that exceeded expectations, with the media group saying it is “well positioned” for long-term growth as it weighs competing takeover approaches from Paramount Skydance and Netflix.
The company confirmed Thursday that its merger agreement with Netflix remains active, but added that its board believes an enhanced proposal from Paramount “could reasonably be expected” to result in a superior offer.
Paramount earlier this week raised its bid for Warner Bros. to $31 per share, escalating a high-profile battle for control of the entertainment company behind major franchises including “Harry Potter” and “Game of Thrones.” The revised proposal also increases the regulatory termination fee to $7 billion from $5.8 billion should the deal fail to secure approval.
According to Bloomberg News, citing people familiar with the situation, the updated offer was intended to disrupt Warner Bros.’ existing agreement with Netflix.
If Warner Bros.’ board ultimately determines Paramount’s proposal is more favorable, Netflix would have four days to submit a counteroffer under the current terms.
Netflix has proposed paying $27.75 per share for Warner Bros.’ studio operations and HBO Max streaming platform, while Warner Bros. plans to separate its traditional television business into an independent entity. Paramount’s offer, by contrast, targets the entire company.
Despite the ongoing negotiations, Warner Bros. said in a shareholder letter that it would not address questions related to the takeover process during its post-earnings analyst call.
Financially, Warner Bros. posted adjusted EBITDA of $2.22 billion for the fourth quarter, down 19% year over year but ahead of Bloomberg consensus estimates of $2.11 billion. Revenue declined 5.7% to $9.46 billion, also topping expectations.
The company highlighted its studios division as the “clear standout” performer in 2025, with core profit rising 52% year over year to $2.55 billion on a currency-adjusted basis. Management said the segment is “already seeing momentum” in the current year, supported by strong box office performance from the recent romantic drama “Wuthering Heights.”
Streaming subscriber growth also remained strong, with total subscribers reaching nearly 132 million — surpassing a target of 130 million set 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, bringing the company closer to its goal of exceeding 150 million by the end of 2026.
Warner Bros. added that coverage of the Winter Olympic Games on HBO Max across Europe boosted its global linear networks business as the company continues shifting toward a digital-first strategy. The event in Italy became the most streamed Winter Olympics ever for the company, with viewership more than tripling compared with Beijing 2022.
Shares of Warner Bros. Discovery were little changed in premarket U.S. trading.