10-Q – 2026-05-06 – wbd-20260331.htm

ITEM 1. Legal Proceedings
From time to time, in the normal course of its operations, the Company is subject to various litigation matters and claims, including claims related to employees, stockholders, vendors, other business partners, government regulations, or intellectual property, as well as disputes and matters involving counterparties to contractual agreements. A determination as to the amount of the accrual required for such contingencies is highly subjective and requires judgment about future events.
The Company may not currently be able to estimate the reasonably possible loss or range of loss for certain matters until developments in such matters have provided sufficient information to support an assessment of such loss. In the absence of sufficient information to support an assessment of the reasonably possible loss or range of loss, no accrual for such contingencies is made and no loss or range of loss is disclosed. (See Note 15 to the accompanying consolidated financial statements.) Although the outcome of these matters cannot be predicted with certainty and the impact of the final resolution of these matters on the Company’s results of operations in a particular subsequent reporting period is not known, management does not currently believe that the resolution of these matters will have a material adverse effect on the Company’s future consolidated financial position, future results of operations, or cash flows.
PSKY Complaint. On January 12, 2026, PSKY filed a complaint in the Delaware Court of Chancery against our board of directors (and our Chair Emeritus, Dr. Malone) and the Company. The suit asserted a claim for breach of fiduciary duty against the directors, alleging that our board of directors failed to disclose material information in both the Solicitation/Recommendation Statement on Schedule 14D-9, filed on December 17, 2025, and the amendment to that Schedule 14D-9, filed on January 7, 2026. PSKY also requested that the court expedite the case in light of the then-current expiration date of PSKY’s tender offer on January 21, 2026. On January 15, 2026, the Delaware Court of Chancery denied PSKY’s request for expedition, stating that PSKY failed to demonstrate that it would suffer any irreparable harm in its capacity as a stockholder of the Company if the litigation was not expedited, among other reasons. On February 2, 2026, the Company moved to dismiss the complaint. Pursuant to the PSKY Merger Agreement, PSKY filed a voluntary notice of dismissal with prejudice with respect to the complaint, and the court dismissed the case on March 2, 2026.
Securities Class Action. On November 25, 2024, a securities class action complaint was filed in the United States District Court for the Southern District of New York ( Collura v. Warner Bros. Discovery, Inc. , No. 1:24-cv-09027-KPF). The complaint named WBD, Gunnar Wiedenfels, and David M. Zaslav as defendants and asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder. On February 21, 2025, the court appointed co-lead plaintiffs (Anthony Yuson and Michael Steinberg) and co-lead counsel (Pomerantz LLP and The Rosen Law Firm, P.A.) to represent the putative class. On May 7, 2025, the lead plaintiffs filed a First Amended Complaint against WBD, Gunnar Wiedenfels, and David M. Zaslav. The First Amended Complaint generally alleges that, between February 23, 2024 and August 7, 2024, defendants made false and misleading statements in SEC filings and other public disclosures relating to WBD’s negotiations with the National Basketball Association (“NBA”) concerning its contractual rights to broadcast the NBA’s content and the potential impact of a failure to renew the contract on its business, in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, and seeks damages and other relief. The defendants moved to dismiss on July 11, 2025, which the court granted without leave to amend on March 30, 2026.
Consolidated Derivative Action. Between December 20, 2024 and January 14, 2025, four stockholder derivative complaints were filed in the United States District Court for the Southern District of New York ( Roy v. Zaslav et al., No. 1:24-cv-09856-AT, Hollin v. Zaslav et al., No. 1:24-cv-09885-AT, KO v. Zaslav et al., No. 1:25-cv-00114-AT, and Herman, III v. Chen et al., No. 1:25-cv-00352-AT). Each complaint names certain current and former directors and officers of WBD as defendants and WBD as nominal defendant, and each complaint seeks damages and other relief. The complaints generally assert claims against the defendants, derivatively on behalf of WBD, for alleged breaches of fiduciary duty based on the same facts alleged in the Collura securities case described above. The complaints assert various common law causes of action, including breach of fiduciary duties, aiding and abetting breach of fiduciary duties, abuse of control, unjust enrichment, gross mismanagement, and waste of corporate assets, as well claims for violations of Sections 14(a), 10(b), and 21D of the Exchange Act. On January 21, 2025, the court consolidated the four actions for all purposes under Case No. 1:24-cv-09856-AT, captioned as In re Warner Bros. Discovery, Inc. Derivative Litigation (the “Consolidated Derivative Action”). On February 19, 2025, the Court stayed the Consolidated Derivative Action pending resolution of a final decision on all motions to dismiss the operative complaint in the Collura securities action.
45

Individual Stockholder Action. On April 2, 2026, an individual action was filed in the Supreme Court of the State of New York, County of Richmond (Nicosia v. Di Piazza, Jr., et al., Index No. 150851/2026). The complaint was brought by a purported stockholder of WBD and it named as defendants WBD, members of the WBD board of directors, and PSKY. The complaint alleged that the proxy statement disseminated to WBD stockholders in connection with the proposed transaction with PSKY contains materially false and misleading statements and omissions concerning, among other things, the alleged personal financial benefits of WBD’s directors and officers, the alleged conflicts of WBD’s financial advisors, and the process underlying and valuation of the proposed transaction. Following the issuance of certain supplemental disclosures via Form DEFA14A on April 16, 2026, the plaintiff voluntarily dismissed the litigation with prejudice on April 20, 2026.
Nokia Litigation. Over the past several years, Nokia Corporation and Nokia Technologies Oy (collectively, “Nokia”) have alleged that WBD is infringing on their portfolio of patents related to the delivery of streaming video. On November 1, 2025, Nokia brought suit against WBD in certain jurisdictions, and WBD and Dplay Entertainment Limited brought suit in other jurisdictions, and filed a rate-setting proceeding in the High Court of Justice of England and Wales (the “Court”) against Nokia seeking a determination of a reasonable and non-discriminatory (“RAND”) royalty rate for a global license to certain Nokia patents, including standard-essential patents related to the H.264/AVC and H.265/HEVC standards and other non-essential multimedia patents. The Court is scheduled to hold a hearing in May 2026 to determine the amount of an interim payment that WBD will be required to make to Nokia during the pendency of the litigation, which may include refundable and non-refundable components, and trial is currently scheduled for late 2026. As of March 31, 2026, the Company recorded an immaterial liability related to this matter. The amount of any adjustment to this liability as an outcome from the rate-setting process cannot be reasonably estimated.

ITEM 1A. Risk Factors
Investors should carefully review and consider the information regarding certain factors that could materially affect our business, results of operations, financial condition, and cash flows as set forth under Part I, Item 1A “Risk Factors” of the Company’s 2025 Form 10-K. Additional risks and uncertainties not presently known to us or that we currently believe not to be material may also adversely impact our business, results of operations, financial position, and cash flows.

ITEM 5. Other Information
Disclosure of Trading Arrangements
Item 408(a) of Regulation S-K requires the Company to disclose whether any director or officer of the Company has adopted or terminated (i) any trading arrangement that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c); and/or (ii) any written trading arrangement that meets the requirements of a “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K. During the quarter ended March 31, 2026, the following activity occurred requiring disclosure under Item 408(a) of Regulation S-K:
Priya Aiyar , Chief Legal Officer , adopted a Rule 10b5-1 trading arrangement on March 13, 2026 . This trading arrangement has a termination date of June 30, 2027 . Under the trading arrangement, up to (i) 465,338 shares of common stock issuable upon vesting of restricted stock units granted on March 3, 2025 and March 17, 2025, (ii) 43,630 shares of common stock issuable upon vesting of performance restricted stock units granted on March 3, 2025 and (iii) 77,243 shares of common stock issuable upon the exercise of options expiring on March 3, 2032, for an aggregate of 586,211 shares of common stock, are available to be sold by the broker upon reaching pricing targets defined in the trading arrangement.
Bruce Campbell , Chief Revenue and Strategy Officer , adopted a Rule 10b5-1 trading arrangement on March 10, 2026 . This trading arrangement has a termination date of August 31, 2027 . Under the trading arrangement, up to (i) 143,730 shares of common stock issuable upon vesting of restricted stock units granted on various dates between March 1, 2024 and August 15, 2025, (ii) 798,296 shares of common stock issuable upon vesting of performance restricted stock units granted on March 1, 2024 and March 3, 2025 and (iii) 290,307 shares of common stock issuable upon the exercise of options expiring on various dates between March 1, 2031 and August 15, 2032, for an aggregate of 1,232,333 shares of common stock, are available to be sold by the broker upon reaching pricing targets defined in the trading arrangement.
Gunnar Wiedenfels , Chief Financial Officer , adopted a Rule 10b5-1 trading arrangement on March 9, 2026 . This trading arrangement has a termination date of April 30, 2027 . Under the trading arrangement, up to (i) 134,953 shares of common stock issuable upon vesting of restricted stock units granted on March 1, 2024 and March 3, 2025, (ii) 769,855 shares of common stock issuable upon vesting of performance restricted stock units granted on March 1, 2024 and March 3, 2025 and (iii) 258,691 shares of common stock issuable upon the exercise of options expiring on March 1, 2031 and March 3, 2032, for an aggregate of 1,163,499 shares of common stock, are available to be sold by the broker upon reaching pricing targets defined in the trading arrangement.
46

David Zaslav , Chief Executive Officer , adopted a Rule 10b5-1 trading arrangement on March 12, 2026 . This trading arrangement has a termination date of August 14, 2026 . Under the trading arrangement, up to (i) 392,693 shares of common stock issuable upon vesting of restricted stock units granted on January 5, 2026 and (ii) 4,179,755 shares of common stock issuable upon the exercise of options expiring on June 12, 2032, for an aggregate of 4,572,448 shares of common stock, are available to be sold by the broker upon reaching pricing targets defined in the trading arrangement.
The shares of common stock available for sale under the applicable trading arrangement upon vesting of performance restricted stock units have been estimated at target performance except in the case of certain performance restricted stock units granted on March 1, 2024 for which performance has already been certified by the Compensation Committee of the Board. For awards that have been estimated at target performance, the actual number of performance restricted stock units that vest following the end of the applicable performance period, if any, depends on the relative achievement of the applicable performance metrics. For more information on the performance restricted stock units, see the Company’s definitive proxy statement for its 2026 annual meeting of stockholders filed on April 30, 2026.
47

ITEM 6. Exhibits.
Exhibit No. Description

2.1 Amended and Restated Agreement and Plan of Merger, dated January 19, 2026, among Warner Bros. Discovery, Inc., Netflix, Inc., Nightingale Sub, Inc., and New Topco 25, Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed on January 20, 2026 ((SEC File No. 001-34177)) (1)

2.2
Agreement and Plan of Merger, dated February 27, 2026, among Warner Bros. Discovery, Inc., Paramount Skydance Corporation and Prince Sub Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed on February 27, 2026 (SEC File No. 001-34177))

10.1 Amendment No. 1 to Bridge Loan Agreement, dated as of February 18, 2026, among Discovery Global Holdings, Inc. (f/k/a WarnerMedia Holdings, Inc.), Warner Bros. Discovery, Inc., the lenders party thereto and JPMorgan Chase Bank, N.A. as collateral and administrative agent (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on February 18, 2026 (SEC File No. 001-34177)) ( 2 )

10.2 Warner Bros. Discovery, Inc. 2026 Incentive Compensation Program (filed herewith) *

10.3 Form of David Zaslav Non-Qualified Stock Option Grant Agreement (incorporated by reference to Exhibit (e)(69) to Amendment No. 3 to the Schedule 14D-9 filed on January 7, 2026 (SEC File No. 005-84211 )) *

10.4 Form of David Zaslav RSU Grant Agreement ( incorporated by reference to Exhibit (e)(70) to Amendment No. 3 to the Schedule 14D-9 filed on January 7, 2026 (SEC File No. 005-84211 )) *

10.5 Guarantee, dated as of February 27, 2026, by and among The Lawrence J. Ellison Revocable Trust, u/a/d 1/22/88, as amended, Lawrence J. Ellison and Warner Bros. Discovery, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on February 27, 2026 (SEC File No. 001-34177))

10.6 Tax Reimbursement Agreement between David Zaslav and Warner Bros. Discovery, Inc., dated March 10, 2026. (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on March 16, 2026 (SEC File No. 001-34177)) *

10.7 Form of Warner Bros. Discovery, Inc. 2026 Annual Performance Restricted Stock Unit Grant Agreement for David Zaslav (filed herewith) *

10.8 Form of Warner Bros. Discovery, Inc. Performance Restricted Stock Unit Agreement for Employees updated as of February 2026 (filed herewith) *

10.9 Form of Warner Bros. Discovery, Inc. Restricted Stock Unit Grant Agreement for Employees updated as of February 2026 (filed herewith) *

22 Table of Senior Notes, Issuer and Guarantors (incorporated by reference to Exhibit 22 to the Form 10-K filed on February 27, 2026 (File No. 001-34177))

31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document (filed herewith)†

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)†

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)†

48

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)†

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)†

104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

(1) Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.
(2) Certain exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.
* Indicates management contract or compensatory plan, contract or arrangement.
† Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, (ii) Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025, (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and 2025, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025, (v) Consolidated Statements of Equity for the three months ended March 31, 2026 and 2025, and (vi) Notes to Consolidated Financial Statements.
49

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 

    WARNER BROS. DISCOVERY, INC.
(Registrant)

Date: May 6, 2026     By:   /s/ David M. Zaslav
      David M. Zaslav
      President and Chief Executive Officer

Date: May 6, 2026     By:   /s/ Gunnar Wiedenfels
      Gunnar Wiedenfels
      Chief Financial Officer

50