Warner Bros. Discovery, Inc. (WBD) Earnings Call Transcript & Summary

Thank you. Gunnar Wiedenfels, obviously, CFO, Warner Bros. Discovery. We really appreciate you being here. You're going to bring our whole conference home for us, so thank you very much for coming tonight.

Thank you for hosting us.

Okay, so let's start big picture, Gunnar. So looking back on the long road since acquiring WarnerMedia assets. There's clearly been a lot of disruption in the business. Let's just start with, what do you think often gets overlooked as part of the achievements and the success stories that you've made so far?

Sure, and thank you for having me, and welcome, everybody. It is indeed -- it feels like a long time ago that we started as WBD and a lot has changed in the industry. We have achieved a ton in the meantime. If you just look at our 3 segments, we've got a linear business with leading margins in the industry. We have turned a streaming service around from more than $2 billion of losses when we started to a trailing 12-month close to $1 billion of profits. And we've laid a foundation in the studio for, I think, enormous asset value creation to happen over the next few years, and we're starting to see some of that impact coming through. What I have enjoyed the most myself, though, is really the cultural change that we've been able to achieve as a team from collaboration to just the discipline, the professional management, accountability, the data-driven approach. And I believe in professional management and I think there's going to be dividends from that for many, many years to come.

Okay. As part of the professional management, there's been a very intense focus on growing cash flow. I think that's fair. But I'm also wondering, given the challenges of the linear ecosystem, can you explain to us what gives you the confidence that Max and Warner Bros. Studio is enough to continue to grow cash flows for the company over the next few years?

Well, let's start with what we're already seeing today. We've talked about this as recently as during our first quarter earnings call. In the international business, we already see the lines crossing for international affiliate revenues for 5 quarters in a row now. Across the entire portfolio, we've seen actual growth in revenue with our affiliates coming to us and looking for integrated solutions. Whereby we give a little on the linear side, we take a little more on the streaming side and in the aggregate, we're growing. To some extent, not as consistently, but we're also seeing it for ad revenues. And so that's what we already see. If we look at the situation here in the domestic market, slightly tougher starting position but the way we managed the affiliate deals last year, the first, very encouraging signs coming out of Charter as they implement their bundled strategy, give me a lot of confidence that we can see some positive results here as well. And then if you look from -- if you go from linear over to the streaming and the studio businesses, there is enormous opportunity still ahead, again, starting with streaming. I already mentioned the profit turnaround, we have a target for at least $1.3 billion of profit in 2023, but all of that is still the very early innings. We have just launched in many of the international markets. We have 3 more major markets coming up in 2026. And in all of those markets, our penetration is still relatively low compared to what the total addressable potential is. And so with all that said, with the content lineup that's coming down the pike, I have no doubt that we're going to be able to generate very significant revenue growth. And then we're going to be able to get a very nice operational gearing in terms of cents falling through to the bottom line of every dollar of revenue growth. So there's a tremendous opportunity there. And for the studio, we've talked about the under-monetized nature of that asset. You've seen some improvements in Q4, Q1, at least on the profit side. Q2 is going to be phenomenal. But that's only, I think, the tip of the iceberg because what you don't really see yet is the fundamentally different approach that we're taking at the studio. There's obviously the phenomenal performance of our creative teams, on the 1 hand, but then there's also a very different focus on process, metrics, discipline, collaboration that will allow us to be more successful in the hit scenarios and have less financial pain in the inevitable cases where we miss it. That's at the very beginning and is going to drive very significant improvement over the next few years.

Okay. So we're going to come back and unpack a lot of that, but you mentioned Q1 earnings. So right after earnings, David Faber on CNBC reported that we could see an announcement of a split in the not-too-distant future. So maybe if you could just help us think about the recent Board appointments and the completion of the internal reorganization that you did talk about on earnings. How should investors think about the time line for strategic action to ensure, in your view, that the equity properly reflects true value?

Well, I can't give a specific time line and there is no specific time line, but we definitely share the view that our current share price is not reflecting the underlying value of our company. And so going back to what we announced in December, the internal reorganization that we have been able to work through in pretty short order, that gives us a lot of flexibility. There are a couple of things that it addresses: one, we cleaned up a legal entity structure that was still the result of the 2 mergers, so we had Scripps, we had Discovery, we had WarnerMedia entities, et cetera, so that's all cleaned up. It also creates a lot more transparency to a great level of detail to really make sure that these 2 divisions that were created really truly reflect the linear business and the studio and streaming business with very different profiles. And that's going to be visible going forward as we report in this structure. And then in terms of the strategic optionality, look, David has been talking for a while about the generational disruption in the industry. There's a lot more openness to discuss options, opportunities, and we're just going to make sure that we are in a position to take advantage of whatever opportunity arises, and I feel that we are in that position.

Okay. You touched on this a little bit but now that they are the 2 formally separate parts of the business on the networks side and the streaming and studio, can you just help us explain a little bit more behind the scenes, like how are you operating them any differently or strategically? Is there any sort of takeaway that happened from the whole process?

Well, we've already had 3 different segments: the networks segment, the streaming segment and the studio segment. And we're continuing to operate that way. We continue to make use of One WBD opportunities, but we also have greater flexibility to change that if we so wish.

Okay. Let's shift to streaming then. So there was a big announcement this week in terms of a brand change that I'm happy to show off here. So if you can help us really just take a step back here. There's been a lot of strategic shifts within streaming business over the past couple of years, right, given the road that we talked about earlier. It seems like the shift away from more is better to better is better, including bringing the HBO brand back. So can you help us understand how did you reach this conclusion, number one? And strategically, how does that position now, HBO Max, for that future?

Well, so what hasn't changed, what's always been a big differentiator is HBO has always stood for quality, right? But if we dial the clock back a few years at the time, '21, '22, there were a lot of everything for everyone in the market. And we obviously came out of the gate with a combined portfolio with our Discovery Networks and HBO. And we've had a tremendous success story on the streaming side. We continue to dynamically grow. There's a lot of momentum even though we're just getting started in a lot of the international markets. And as we analyze the data and what our subscribers are telling us, you can see that there is a lot of viewership on all kinds of content. 25% of the engagement is on linear network content on the streaming platform. But what really differentiates us or really swings the needle when it comes to the positioning, the gross adds, the growth momentum, it's quality. It's the quality content that we can produce in a way that nobody else can. And that's become more and more evident. And as we're sitting together in these business reviews and talked about how the market has spoken here and quality is the real differentiator, that's when David said, look, we've got the brand that stands for content quality like no other brand. That's how that change was made. And look, we are incredibly successful with the content pipeline that's coming out of Casey and his unbelievable team and Channing and her team and the film group as well. And we've done a much better job recently, I think, in sequencing it the right way so that you can go from The Pitt to The Last of Us, Hacks, et cetera, and that way, sort of creating a much more consistent stream of great quality content and that seems to work out and we're doubling down on it.

You mentioned the $1.3 billion profit target, I think, this year, and 150 million subscriber target. So maybe just help us think about in this new, what is old context, again, how does that change at all? Or are you even more confident, given the strategy in terms of the profitability and that balance with subscriber growth?

We have gotten increasingly confident in our ability to grow this business. Remember, we went out 3 years ago with that $1 billion target for '25. We're blowing through that. And with every quarter, we have more data under the belt, the new platform rolled out globally, et cetera, so we're gathering more and more data and information. But that's obviously all reflected in our projections and our targets for 2026. And we continue to see great opportunity for progress. The European markets that are currently in a relationship with Sky are going to be a major factor that will provide another push in 2026, but we feel great about the opportunity.

Okay, awesome. So let's dig into HBO Max in a little bit more detail. Thinking about the U.S. And so we've done some work that shows the monetization per engagement hour. HBO Max clearly punches well above its weight. Do you think -- again, I'm guessing I know the answer based on the rebrand, but can you help us think about the -- how is this a function of the premium nature of HBO, given its viewership? And do you think that there's even more potential in terms of that monetization, obviously, both from the subscription side but also if you want to talk about advertising?

Yes and yes. I think it is clearly a reflection of the high quality that HBO has always stood for and Max and now HBO Max stands for. There's no question about it. And HBO has monetized above market forever but adequate to the quality that it delivers to its subscribers. And so I'm not surprised that, that continues to be the case. There's a spectrum with maybe fast on one end and the likes of our HBO shows on the other end. So that's how it should be. I also think, though, that there is significant additional opportunity to grow from here. I do believe that the market as a whole is still under-monetizing relative to the amount of content and amount of content spend, and there has been a pretty consistent trend over the years to increase pricing. And then on the advertising side, we have a very unique opportunity at HBO Max because a lot of our content still has a very, very low ad load partly because of the legacy positioning of the brand. But with greater scale, greater reach and we're growing our ad-light subscriber base pretty dynamically, we'll have better monetization opportunities, and that is both when it comes to the inventory and when it comes to pricing.

Okay. So maybe taking that, can you help us think about that vision in terms of the ad tier strategy and pricing strategy for HBO Max versus the premium ad-free tier? Do we think that, that should be relatively indifferent to you at a certain point in time? How close are we to there? Maybe just help us really understand like the economics of that.

Yes. The high-level answer is yes, we should be indifferent. In an ideal world, we allow our subscribers to choose what model they prefer, more ads for less money or no ads for more money. Obviously, there are 1,000 complications underneath. And right now, I'd say that it's directionally the case in the aggregate for retail subscribers. But then in some markets, it may be different in those markets where we have more hybrid or wholesale-driven deals, to some extent, activation and engagement needs to catch up with the subscriber growth. But by and large, we're trying to manage towards indifference between the 2 models.

Okay. You just mentioned retail subscribers. So I'm curious, when we think about the wholesale deals, which are coming more prevalent in the U.S. and clearly, you have already made a lot of inroads internationally on that, help us frame the economics when we compare the wholesale deals relative to the retail deals, both in terms of pricing but also to the lifetime value of the subscribers because assuming much lower churn.

Yes. You mentioned the most important term here, and that's lifetime value, right, because that's really what we're optimizing for. And we're managing the business by looking at lifetime value opportunity relative to the subscriber acquisition cost for any given subscriber. And there are very, very different roads to success here, right? If you start with a traditional retail subscriber, relatively expensive to acquire, very high ARPU but relatively high churn as well. So that gives you sort of an index of a lifetime value of a standard retail subscriber. And then there are a couple of different approaches. If you take our Disney partnership, which has worked for not only -- well, that's almost the best of all worlds because these subscribers are great in ARPU, there is no distributor that's taking a toll out of the profit pool. Subscriber acquisition is relatively efficient because of the important big brands that are involved here. And churn is very low so you get an enormous upside in lifetime value. And then you have our traditional wholesale or hybrid deals, where inevitably, you're going to want to give the distributor a share so your ARPU trends lower than average. But at the same time, you've got someone else doing the marketing for you so there's not a lot of subscriber acquisition costs and especially in those cases where you really get into a hard bundled relationship, churn comes down very dramatically. So with a potentially significantly lower ARPU, you're still able to get very attractive lifetime values. And what makes things complicated is we have every permutation of that in every market with all kinds of flavors.

Okay. Something we've talked about many times in different iterations over the years is the licensing strategy as it relates to the overall company. But let's specifically talk about as it relates to streaming. What content should be exclusive to HBO Max in this rebrand? And can you maybe share the current strategy for licensing the hit shows of HBO and Warner Bros. to third-party streamers today?

Yes. So the answer to the first question is there is no hard and fast rule here. What matters is that we have the instrumentation in place, the data and the workflow to make those decisions in a professional way. And that is actually one of the areas that I'm super happy with because as you know, we have a combination of both. We have certain titles that are on HBO Max, and they will be on and they're going to be exclusive. And then we have others where we have made the trade-off decision to go co-exclusive. What's important is, number one, except for markets where we don't have our own streaming service, we never sell our content. We, in certain situations, have co-exclusive windows but we never sell it. Number two is we have a very, very good view now on the value of our content across different windows and differentiation monetization models. And so we know what the contribution of a certain title to the Max platform success is, and we know what the market value is. And so we can make these decisions on a case-by-case basis with a very, very informed view. It doesn't mean that JB or Casey or David might not say, you know what, I get it, but this one is worth ring-fencing. But in many other cases, we have seen real success stories. There are examples where Band of Brothers is one of my favorite example. Wonderful show, happened sort of on the Max platform for years. And we had an opportunity to monetize it, put it out. And when it came up on Netflix, we actually saw viewership come up, and I'm convinced that we have done something positive for the brand -- for that content brand and financially. So those are examples. And we have in-house examples as well where you heard about The Pitt coming back on TNT before the second season comes up on HBO Max early next year. So we're going to continue to make those decisions case by case without any religious beliefs, but following what makes sense from a business perspective.

So taking all that, I'm curious how you think about the nonexclusive licensing in some of the international territories? If you want to talk specifically about the U.K. deal with Sky. Do we think that, that strategy actually limits the potential for increasing the HBO Max subs going forward because the content is also going to remain on Sky? So how do we think about that balance?

Well, I wouldn't use the word limit. I would say it's the opposite. It maximizes the value creation out of our content portfolio because we have the ability in a market like the U.K. to go with a licensing deal, which was a path that WarnerMedia had chosen before, or to go it alone with our own streaming service or to come up with a solution that maximizes value. And that's what we went after where we have a great opportunity now tap into the hard bundled Sky subscribers but also still have the opportunity to launch independently and potentially strike other deals in the market. And we believe that, that's the value maximizing strategy. And it's done in the U.K., and we're -- I'm hopeful that we're going to get great outcomes in Germany and the U.K. as well. What's important to remember is we operate a studio that is an independent studio in and of itself, right? And as part of that, for WBD's success, we have to treat it as a studio as well, which means that a lot of it is going to -- a lot of the output is going to end up on Max but we're also open for business with other players in the market.

It's probably a good segue. So when we think about growing HBO Max on the global stage, maybe help us think about how much you're going to lean into the international, even local content. Is that an opportunity that you think can accelerate? Or is there not as good of returns depending on the premium nature of the content that you're looking for?

There is a great opportunity, and it really isn't the beginning but it's already in flight. One of our big advantages is we've always had a very strong international footprint. We've had boots on the ground in virtually every key territory globally. We've been spending billions of dollars on international content creation for years already. So we're not starting from scratch. That said, in the wake of this international expansion, a lot of our growth in content spend is going into international markets. And to your question about the profitability, it has to be a combination. We have to leverage our global scale and the utilization of the U.S.-originated content. But you won't be successful if you don't supplement that with the right amount of local content in many markets, local sports rights, local news, to some extent. It's that combination that drives the success, the global scale with the local expertise.

Okay. I'm curious in the context of the rebrand but just even more generally thinking about the future of the streaming strategy. How does sports fit into this now because clearly, after losing the NBA rights in the U.S. but you still have very important sports rights internationally, so how do you think about that balance of leaning into sports versus other potential avenues for monetization?

Yes. I mean, you already made the differentiation between the domestic market and some international markets. We've obviously experimented with sports on streaming here in the U.S. and have concluded that the best strategy for us is to have the sports on the more premium tiers. We have different models in certain international markets. And what I would say is whether streaming, linear or otherwise, the general approach to sports is the same, right? It is the one failsafe way to buy mass audience, right? For a certain price, you know what you're going to get. But that also means that there is, at times, irrational competition for these rights, and we will approach it with that in mind, a great opportunity to really engage passionate audiences. But the discipline to really figure out what it's worth and know when to walk and where to strike. And I mean, over the years, we've had great opportunities for really, really attractive deals and sports, but it also requires to walk away from some if the math doesn't work out.

We'll come back to that in 1 second. But just a quick follow-up. Would you be open to sublicensing your sports rights in the U.S.? Clearly, there's another rebrand that happened with ESPN, not flagship ESPN. So would you be open to...

I wouldn't speculate about that right now.

Okay. So let's shift to linear then. So again, we had the opportunity to hear from the NBA yesterday about its new deal. I'm curious, how would you characterize the impact of losing the NBA rights on Warner Bros. Turner in the U.S.? Could you call it even a win? Like is that the right characterization after securing the recent distribution deals? Maybe help us think about, have we overthought the importance of sports rights?

I think that's too general a statement. But there's no question to me that our outcome of that NBA negotiation is a huge win for WBD. We did exactly what I just laid out. It's a phenomenal sport, it's a phenomenal entertainment product and we know what it's worth. And we know where the point is where we just start handing more cash over to the league than we're making with the product, and that's where we have to draw the line, and frankly, that's what we did. I'm proud of how the team handled that because to your point, there was a lot of external pressure and a lot of preconceived viewpoints on what's must-have, et cetera. We've done the work, and we -- I mentioned this on our earnings call, we're going to benefit from a very significant step down in sports cost in 2026. In an interim in 2025, if you exclude the Olympics for a moment, which we had in 2024, sports rights are going to step up because Luis Silberwasser and the team were able to bring together a lot of new rights, some of which don't perfectly align with the end of the NBA. But the bottom line is we were able to secure our affiliate deals with rate increases with a much, much more efficient sports portfolio. And that, in the end, is our job, right, to find the right balance between what we really need and in the interest of our shareholders, paying fair value for rights and walking away where we believe that we would be losing billions of dollars on an investment.

You mentioned Olympics so maybe if we can go there for a second. How do we think about the ROI on that type of investment? That was a renewal, so what did you learn from the last deal? And how did that transform the way that you approached the newer deal?

Yes, it's interesting. These deals are very different. The last deal was a wholesale deal. We essentially just -- we're a one-stop shop opportunity for the IOC. We took all the rights and then we broke them up into different packages, utilized what we could effectively monetize ourselves. In some markets, we had to sublicense to public service broadcasters for regulatory reasons, et cetera. So it was a much greater, much more involved deal that was a game changer at the time for us because it really allowed us to reposition Eurosport as a network and redo a lot of affiliate deals at the time. The renewal now is much more targeted where we really just cherry-pick what we need for our specific platforms, and it's going to be a profitable deal. And it is a great product because again, talk about the passion and the audience engagement and our ability in the streaming world to really deliver every moment as opposed to in the past where people had to choose in a linear ecosystem what the highest profile moments would be.

Okay. So I guess putting those kind of 2 different juxtapositions of how approaching sports deals together, how do you plan to invest more on sports rights going forward? Do you plan to take some of that savings that you talked about for the NBA and reinvest that? Or how do you understand like what that right balance is between having enough sports or too much sports?

Yes. That is -- that's a great question. And the honest answer is there's no perfect -- like there is no mathematical answer. But what we have learned is that our portfolio is strong as it stands right now with they're called triple playoffs that Luis brought in, Roland-Garros, NASCAR, a lot more of the college sports. The preparation over 2 years for that change moment with the NBA was very well executed and we've got a great hand right now. And from a forward-looking perspective, we're going to continue to do the same thing. You're going to see us in every discussion around every available right. But you always should expect us to come in with a view of what it's worth and chances are we're not going to go for a lot of it because, as I said earlier, we all know that sometimes the pricing ends up in a less rational, less financially viable area. But there have, time and time again, been great opportunities for a really successful deal-making. I mean, especially if you look at our international business, our ability to form that joint venture with BT Sports, TNT U.K., that was a phenomenal deal. And those are all opportunities that you only get access to if you're in the deal flow, if you're in the discussions and then really get a sense for where there is an opportunity to strike.

Let's shift over to part of the reason why everyone is here this week is the upfronts. So again, you guys had your presentation as well. Can you help us think about, and we heard on the earnings call, but just the cyclical versus secular dynamic on advertising going on, on the linear networks? How does the shift to CTV and these other platforms impact the conversations that you're having today with advertisers?

Well, the -- look, the secular trends are continuing, there's no question about it. I think that Bobby and Ryan did a great job laying out what we can do as partners in that space and how linear can be a lot more data-driven and much more solution-oriented for our advertisers. I think that is incredibly important. And we're also seeing a lot of demand for our streaming and digital inventory that comes to the market. And as such, we're continuing to go to market with a convergent approach. And you should assume a continuation of that shift of dollars over but leveraging the strength of both businesses. And we always said, the interesting observation is that so far, if we look at scatter bookings, we're still not really seeing any meaningful impact of the macroeconomic uncertainty, which is phenomenal. But as we said before, for the upfront market, we're expecting a slightly slower pace maybe initially than otherwise.

One more for you on networks then we'll switch to studio. You recently concluded to not go forward with the sale process of the Polish network, TVN. Help us think about how you evaluate, when is the right time to look to sell off some networks in your very large and expansive global portfolio?

Yes. Look, that's -- it's public company life, right? And certainly, some great people on our Polish team weren't happy to read rumors in the press, et cetera. But the reality is when we get the sense that there's significant sort of unsolicited inbound interest, we got to evaluate what's the best strategy as a company for all of our assets. And the answer is TVN is a phenomenal asset that is core to our portfolio. And it is -- I have looked at a lot of TV broadcasters and TV players in Europe. What Kasia Kieli is doing there is just phenomenal. She has an unbelievable operation running at margins that are unrivaled anywhere in Europe. And we have a very significant upside opportunity from here because there are a lot of market-specific factors. Number one, the market itself continues to grow, talk about current advertising trends. But there are also company-specific opportunities that we believe we can capture over the next 3 to 5 years. There's a lot more fun to be had with that asset.

Right. Speaking of fun, you've had some recent successes at Warner Bros. Studio, Minecraft and Sinners. Obviously, Superman is probably the biggest driver of the year, still to come at least. So can you help investors think about what the right level of normalized studio profitability is? You've put out the $3 billion target but how do we think about that normalized level?

I don't know if there's a normalized studio profitability. One of the difficult things about the studio is that it is -- there is no normal state, right? You have to look at longer-term trends. You have to look at a slate in the aggregate. It is a hit-driven business. You're inevitably going to win some and you're going to lose some. What we're working towards and a lot of that, in addition to the creative quality, the team and the ideas and the access to talent. A lot of what we focused on is to put the process discipline in place, to have the right mix between filmmaker-driven original films, on the one hand, some bigger sort of IP-driven tentpoles on the other and then some -- especially with New Line Cinema, we have the opportunity to put in pretty low risk and very consistent performers into the slate. And I think the team is doing a better and better job. And look, the second quarter is a great example. You've got that very commercial Minecraft success. You have Sinners, which was a big swing and it's hit pretty big as well. And so again, we have that $3 billion normalized level that we put out there. The studio is always going to have hits and misses. But again, between the collaboration, the process discipline, the execution discipline and then importantly, the franchise management and the full utilization of all of the ancillary opportunities, consumer products, experiences, et cetera, a lot of that is completely underdeveloped and we're in the early innings still of building that out. But it's not a coincidence that you saw the hype around Beetlejuice, Minecraft, McDonald's promotion being sold out in 2 or 3 weeks, the big total company push behind Barbie, et cetera, those are things that we're still developing that weren't in place before. And I think all this taken together is going to allow us to book greater returns in the success cases and also have to live with less difficult financial impact in the inevitable misses that we're going to have.

I'm curious, given that volatility in the business you're talking about and when you factor in video games and the much more stable TV studio, can you help investors think about what the cash flow profile is of just a stand-alone studio business, Warner Bros.?

Well, thank you for mentioning the TV studio because that's performing at a very high level. Channing's team is doing really, really well, and we're going to have a much greater year as well from a licensing and external sales perspective. So there's always going to be fluctuation. Importantly, and we've said this publicly before, we want to invest more in content. And if you think about our entire portfolio, we're probably going to, over the years, spent incrementally less on the linear side. But for the streaming service and for the studios, there are great return opportunities that we're going to get behind. And so for the short term, we will not shy away from significant investment to get that business to significant organic growth.

Okay. A couple of questions to start wrapping up here. Again, we've talked about all of the opportunities and we all know the industry pressures. How would you prioritize the need exactly that you talked about, leaning in and investing versus maintaining investment-grade rating for the debt? And then the follow-up is, as you think about that potential upside from the equity, is that more of a focus or how do you walk that fine balance?

I think we can manage that really well. I do think there is significant equity upside as I said before. But to your point about sort of balancing the trade-off, investment grade and everything, I think we have done a really good job. We have paid down almost $19 billion of debt since coming out of the gate as WBD. That is interestingly pretty close to what we laid out in the S-4 that we filed 4 years ago despite everything that's going on in the industry. So we are very focused on that. I am also very focused on leverage. Still believe that 2.5 to 3x is the right target range for a company like ours. And we will continue to dedicate virtually all of our free cash flow to delevering further. At the same time, we haven't had any meaningful situations where we have not made an investment just in order to defend the balance sheet or anything. We've been able to reallocate and fund what needs to be funded. But that said, we will make sure that we invest in the business at the adequate level, and I think we can achieve a lot of this at the same time.

Okay. So in closing, David has talked about the media industry undergoing generational disruption. So maybe if you could just help leave us with how Warner Bros. Discovery is positioned currently within that framework and your strategic priorities to navigate this period over the next couple of years.

Look, I think we're very well positioned. I think we're seeing a lot that's working, and we're seeing a lot of evidence for success to come when we think about how we're managing differently and foundations that we have laid. And segment by segment, we've got a linear network segment that's performing at margins that are unrivaled in the industry, and we will continue to be relentlessly focused on defending that free cash flow. We have shown that we can scale a streaming business globally, that we can roll out a large number of markets in very short time with a state-of-the-art technology platform, and we're just getting started penetrating those markets. They're one of the greatest content lineups in the history of HBO coming down the pike, so there is going to be continued very, very dynamic growth on top of the dynamic that we already saw in the first quarter. And then for the studio as well, we have made the investments. We have laid the management and process foundations. And as I said, we are going to make a very meaningful step towards that $3 billion target already this year. And that is not -- $3 billion is not the end of it, but hopefully, the basis for a lot of dynamic play of growth.

All right. We look forward to seeing all of that.

So do I.

Thank you for being here. Thank you for taking us home. Thank you, all.

Thank you.