Warner Bros. Discovery Inc. (NASDAQ:WBD)

The financial data reveals significant fluctuations in profitability over the five-year period from 2017 to 2021. Key earnings metrics exhibit distinct trends that provide insights into the company's operational and financial performance.

Net Income (Loss)

The company experienced a net loss of $337 million in 2017, followed by a remarkable turnaround to a net income of $594 million in 2018. This positive momentum continued with substantial growth peaking in 2019 at $2,069 million. However, net income declined in the subsequent years to $1,219 million in 2020 and further to $1,006 million in 2021, indicating a downward trend in bottom-line profitability post-2019 despite remaining in positive territory.

Earnings Before Tax (EBT)

EBT shows a similar pattern to net income, starting with a loss of $137 million in 2017 and a strong recovery to $1,022 million in 2018. It surged further to a peak of $2,294 million in 2019. Following that peak, EBT decreased to $1,728 million in 2020 and $1,433 million in 2021, highlighting a contraction in profitability before taxes in the last two reported years.

Earnings Before Interest and Tax (EBIT)

EBIT demonstrated consistent growth from $338 million in 2017 to a high of $2,971 million in 2019, reflecting improved earnings from core operations. Post-2019, EBIT declined to $2,376 million in 2020 and $2,066 million in 2021, indicating diminishing operating income but still maintaining a strong operational earnings base compared to earlier years.

Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)

EBITDA showed substantial growth from $2,578 million in 2017 to a peak of $7,171 million in 2019, which suggests robust cash earnings before non-cash charges. Although there was a slight dip to $6,691 million in 2020, EBITDA recovered moderately to $7,149 million in 2021, demonstrating relatively stable cash flow generation with minor volatility.

Overall, the company realized a strong improvement from losses in 2017 to peak earnings in 2019 across all profitability measures. Post-2019, profitability contracted but remained positive, with EBITDA indicating maintained operational cash flow strength despite declines in net income, EBT, and EBIT. The trends suggest that while the company faced challenges impacting earnings after 2019, it retained a solid underlying cash-generating capability.

Enterprise Value (EV)

The enterprise value exhibited significant fluctuations over the reported periods. It nearly doubled from 2017 to 2018, increasing from approximately 16,764 million USD to 33,012 million USD. However, a decline was observed in 2019, with EV decreasing to around 28,601 million USD. This was followed by a substantial increase in 2020, reaching a peak of 42,035 million USD, before experiencing the sharpest decline in 2021, falling to 26,581 million USD, the lowest value in the five-year span except for the initial year.

Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)

EBITDA showed a general upward trend throughout the period under review. Starting at 2,578 million USD in 2017, it surged to 6,437 million USD in 2018, representing a significant gain. The growth continued more moderately in 2019, reaching 7,171 million USD. A slight decrease occurred in 2020 with EBITDA dropping to 6,691 million USD; however, the figure rebounded in 2021 to 7,149 million USD, approaching the high observed in 2019.

EV/EBITDA Ratio

The EV/EBITDA ratio experienced notable volatility over the years. Initially, the ratio stood at 6.5 in 2017, decreased to 5.13 in 2018, and further dropped to 3.99 in 2019, reflecting an improving valuation relative to EBITDA. In 2020, the ratio increased markedly to 6.28, signaling a higher enterprise value relative to earnings before interest, tax, depreciation, and amortization. The ratio declined again in 2021 to the lowest point of 3.72, indicating a more favorable valuation compared to prior years, potentially driven by the decrease in enterprise value against steady EBITDA levels.