20 million DTC subscribers for Discovery at end 3Q 2021

Discovery, Inc. Reports Third-Quarter 2021 Results

NEW YORK, NY — Discovery, Inc. (“Discovery” or the “Company”) (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the quarter ended September 30, 2021.

David Zaslav, President and Chief Executive Officer of Discovery said, “We made great strides in the quarter operationally, financially and creatively. The team drove solid momentum in our direct-to-consumer business, which we grew to 20 million paid subscribers at quarter end on the strength of our global brands and fan-favorite content, including the Olympic Summer Games and Shark Week. Additionally, we delivered double-digit growth in both advertising and distribution revenues, as we doubled next generation revenues year over year. This strong performance once again drove very healthy cash flows during the quarter, further strengthening our balance sheet and financial profile. We are very excited about our pending merger with WarnerMedia and the opportunity to bring these two companies together, combining iconic and globally cherished franchises and brands, and positioning us to more efficiently drive global scale across the combined portfolio.”

Third-Quarter 2021 Financial Highlights

• Total revenues of $3,150 million increased 23%, as reported and ex-FX, compared to the prior year quarter.
  • U.S. advertising revenues increased 5% and distribution revenues increased 21%; and
  • International advertising revenues increased 28%, or 26% ex-FX, and distribution revenues increased 7%, or 6% ex-FX.
• Net income available to Discovery, Inc. was $156 million and diluted earnings per share was $0.24.
• Total Adjusted OIBDA was $726 million.
• Cash provided by operating activities was $811 million and free cash flow was $705 million.

Operational Highlights

• Ended Q3 with 20 million DTC Subscribers, an increase of 3 million subscribers since the end of Q2.
• Generated $425 million of Next Generation Revenues, growth of approximately 100% versus the prior year quarter.
• Recently launched discovery+ in Canada and the Philippines; the app is also now available on Cox Contour TV and Contour Stream Player.
• Finalized multi-year U.S. distribution agreements with DirecTV and Verizon.
  Successfully broadcast the Tokyo 2020 Olympic Summer Games, which reached over 372 million people in Europe across TV and digital platforms, and delivered 1.3 billion minutes of Olympics content on our streaming services.