Warner Bros. Discovery

Revenue is semi-predictable but declining in legacy areas while growing in streaming. Subscription revenues (HBO Max/Discovery+) provide recurring cash, and management forecasts high DTC subscriber growth (aiming for 150 million by 2026).

In Q4 2024, streaming revenue grew 5% YoY to $2.65B and Streaming EBITDA turned positive, indicating an increasingly reliable trend. But linear TV and advertising revenue are much less predictable, given cord-cutting and ad market swings. The recent 5% overall revenue drop underlines this volatility.

While we expect overall cash flow to stabilize as legacy segments wind down, forecasting precise growth is hard. On balance, WBD is more predictable than airlines or commodities, thanks to its base of subscriptions, but far less than true tollbooths (like Visa).

The combination of secular streaming tailwinds with cyclic contracting in traditional media gives moderate predictability.