HBO Max hits 140M subscribers as WBD deal nears completion
Warner Bros. Discovery (WBD) reported Q1 2026 earnings, highlighting that its streaming segment, HBO Max, exceeded 140 million global subscribers and is projected to surpass 150 million by year-end. The company announced a significant turnaround, moving its streaming segment from a $2 billion loss to a $1.4 billion profit, with profitability growing "double digit." WBD also confirmed the shareholder approval for Paramount Skydance to acquire the company at $31 per share.
Key Takeaways
- HBO Max exceeded 140 million global subscribers and is projected to top 150 million by year-end 2026.
- Streaming segment profitability reached $1.4 billion, a major turnaround from the prior year's $2 billion loss.
- Shareholders approved the $31-per-share cash acquisition of WBD by Paramount Skydance two weeks prior to the call.
- A Knight of the Seven Kingdoms averaged 36 million viewers per episode, marking a record debut for the platform.
- Warner Bros. Studios reaffirmed an annual adjusted EBITDA target of at least $3 billion.
Why It Matters
The massive shift in streaming profitability validates David Zaslav’s aggressive cost-cutting and bundling strategy just as the company prepares to merge with Paramount. Reaching 140 million subscribers provides a scaled foundation for the combined entity to compete with Netflix and Disney. However, significant headwinds remain; the company must manage rising separation costs and linear decline while navigating regulatory scrutiny of the Paramount Skydance deal. The market is now focused on how well HBO Max’s high-margin growth can offset the $100 million in quarterly cash flow pressure related to the sale. Watch for the DOJ's final stance on the merger to gauge the combined entity's domestic sports leverage.
Additional Context
The acquisition of Warner Bros. Discovery by Paramount Skydance for $110 billion follows a dramatic bidding war that saw Netflix pull out of a rival $82.7 billion deal in February 2026. According to Wikipedia (June 2026), the Netflix offer would have spun off WBD's linear networks into a standalone company, whereas the winning Paramount bid is a 100% all-cash acquisition at $31 per share. To secure the deal, Paramount Skydance funded a $2.8 billion termination fee paid to Netflix. Per Reuters (June 2026), the transaction is now facing intensifying regulatory hurdles, as the UK Competition and Markets Authority launched a formal Phase 1 investigation on June 9, 2026. Domestically, the deal is meeting stiff resistance from state officials. Per ScreenDaily (June 2026), attorneys general from California and New York are preparing lawsuits to block the merger, citing concerns over the sustainability of the creative community. They are backed by nearly 1,000 industry professionals who signed an open letter in April claiming the consolidation would "grievously compromise" industry diversity. While WBD reported a widened GAAP net loss of $2.92 billion for Q1—largely due to the Netflix termination fee—the streaming unit's 9% revenue growth and 19% surge in ad revenue underscore the platform's improving economics ahead of the expected close. Recent viewership data further highlights the "Game of Thrones" franchise's critical role in this transition. Per Variety (February 2026), "A Knight of the Seven Kingdoms" averaged 13 million U.S. viewers per episode, contributing to what HBO describes as its most active slate of hits ever. This content momentum has been essential in key European territories where HBO Max recently launched; broadbandtvnews reported in May 2026 that retail acquisitions in the U.K. and Germany have trended significantly ahead of internal projections, providing the primary lift as WBD aims for its 150 million subscriber year-end target.
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