Discovery Q2: Ad Revenue Up 12%, D2C Subscribers Hit 18M

Discovery, now in the process of merging with WarnerMedia, saw strong gains in ad revenue, D2C subscribers and overall performance in its second quarter.

The company’s ad revenue jumped 12%, to $1.1 billion.

This year’s upfront saw Discovery realize record-breaking revenue on price increases in the high teens, despite cable ratings declines. More available inventory due to the January 2021 U.S. launch of Discovery+, and international expansion also contributed to the advertising gains.

"Discovery delivered very strong results this quarter as we executed well amidst a recovering global advertising market,” stated Discovery President and CEO David Zaslav. “Advertising revenue increased in every region of the globe and accelerated throughout the quarter, particularly in our International segment, [where] revenue increased 70%. Indeed, many key markets such as the U.K., Italy, Germany and a number of Latam and APAC markets, all demonstrated a marked resurgence and finished ahead of 2019.”

The U.S. still accounts for more than two-thirds of the company’s advertising portfolio.

Discovery also saw its total D2C subscribers—primarily Discovery+ — rise to 17 million as of the end of the quarter, and to 18 million as of its earnings call today. The company had 13 million D2C subscribers as of the end of Q1.

“We continued to steadily execute in our emerging next generation businesses,” said Zaslav. “This contributed to 130% revenue growth in the second quarter. Our first Summer Olympic Games have thus far been a success, supporting healthy viewing and subscriptions across both our linear and streaming platforms, and underscore the importance of our commitment and investment in marquee IP.”

Discovery’s total revenue rose 21% year-over-year, to $3.96 billion, including $400 million in “next generation” revenues. Diluted earnings per share were $1.01.

Both exceeded analysts’ expectations, per Yahoo Finance, of EPS of 85 cents and revenue of $2.97 billion.

Net income rose to $672 million, from $271 million in the year-ago quarter.

Total adjusted operating income before depreciation and amortization (OIBDA) declined 1%, to $1.117 billion. OIBDA at Discovery’s U.S. networks also declined 1%, to $1.05 billion, on revenue of $1.973 billion (up 12%).

Distribution revenues increased 12%, to $828 billion, despite a 3% decline in traditional subscribers, driven by Discovery+ and increases in affiliate fees.

Discovery also announced that Discovery+ will be available through Cox Communications' Contour and Vizio's SmartCast. 

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