By contrast, the Studios segment delivered a profit of $695 million, up from $308 million a year ago, fueled by box-office hits including "Superman," "Weapons," and "The Conjuring: Last Rites." Domestic box-office receipts for "Superman" reached $354.2 million in the quarter, making it the top-grossing release. Streaming profit climbed 19% to $345 million, and global subscribers rose by 2.3 million to 128 million, though streaming revenue was essentially flat year-over-year.
The Global Linear Networks segment saw revenue fall 22% to $3.9 billion and profit drop 20% to $1.7 billion, even as the segment maintained an adjusted EBITDA margin of roughly 44%. Cord-cutting and the loss of sports rights continue to erode the traditional TV base.
The quarter included $1.3 billion of pre-tax acquisition-related amortization, content fair-value step-up, and restructuring expenses. Free cash flow was $701 million, reduced by approximately $500 million in separation-related costs. The company repaid $1.2 billion of debt, ending the quarter with gross debt of $34.5 billion and net leverage of 3.3x.
Against this backdrop, the board announced a strategic review that could lead to a full or partial sale, an alternative separation structure, or the planned mid-2026 split into a Warner Bros. entity (streaming and studios) and a Discovery Global entity (linear networks). Management declined to discuss the review on the earnings call, stating no further updates would be provided until a transaction is approved or disclosure is deemed necessary.