Warner Bros. Discoveryposted a third-quarter profit gain to $289 million for its direct-to-consumer (DTC) unit, which includes its streaming and premium pay-TV services, compared with a $111 million year-ago profit.

The company, led by CEO David Zaslav, on Thursday also said that it ended September with 110.5 million global streaming subscribers, including for Max and Discovery+, compared with 103.3 million as of the end of June. The gain of 7.2 million users was the largest ever quarterly growth in subscribers since the launch of Max, with subscriber growth across all regions. The gain was driven by the Paris Olympics which the companys streaming operations featured in various international markets, streaming launches in new markets, as well as fresh content following last years dual Hollywood strikes. Streaming subs in the U.S. also posted a small gain. Total DTC segment revenue increased by 9 percent, led by the sub growth.

With Netflix profitable and being seen by some observers as theking of streaming, Wall Street has been looking for Hollywood conglomerates to make their streaming business units sustainably profitable.

In the DTC unit, quarterly distribution revenue increased 8 percent, excluding foreign-currency impacts, primarily driven by a 15 percent increase in subscribers, as well as higher pricing, following the

launch of Max in Latin America and Europe during the first half of 2024, partially offset by continued domestic linear wholesale subscriber declines. Advertising revenue jumped 51 percent, primarily driven by an increase in domestic ad-lite subscribers. Global DTC average revenue per user (ARPU) climbed 1 percent to $7.84, primarily driven by domestic ad-tier subscriber growth, higher pricing, and a continuing subscriber mix shift from linear wholesale, partially offset by growth in lower ARPU international markets.

Meanwhile, WBDs third-quarter studios segment results included the box-office performances of Beetlejuice Beetlejuice and Trap. That unit has been moving through a more challenging period.

The conglomerates networks segment also continued to be affected by cord-cutting and advertising challenges in the latest period.

WBD previously unveileda massive$9.1 billiongoodwill impairment charge to write down the value of its traditional TV networks amid cord-cutting and advertising challenges.But Bank of America analyst Jessica Reif-Ehrlich in early October reiterated her buyratingand $12 price target on the stock. We continue to believeWBDhas a compelling assortment of assets, she said. Upcoming catalysts include 1) easing studio comparisons, 2) continued Max rollout internationally, and 3) potential recovery in advertising.

She also highlighted anew WBD carriage agreement with Charter Communications unveiled during the latest quarter. While there are several considerations, such as the inclusion of Max as part of the new affiliate deal, the most important takeaway was TNT affiliate rates appear to be flat versus the prior agreement and represents a much better outcome than expected given the loss of NBA rights, the analyst concluded.