Ladies and gentlemen, welcome to the Warner Bros. Discovery Q1 2025 Earnings Conference Call. At this time, all participants' lines are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Additionally, please be advised that today's conference call is being recorded. I would now like to hand the conference over to Mr. Andrew Slabin, Executive Vice President, Global Investor and Strategy. You may begin. Good morning, and thank you for joining us for Warner Bros. Discovery's Q1 earnings call. Joining me today is David Zaslav, President and Chief Executive Officer, Gunnar Wiedenfels, Chief Financial Officer, and JB Perrette, CEO and President, Global Streaming and Games. Today's presentation will include forward-looking statements that we make pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may include comments regarding the company's future business plans, prospects, and financial performance, and involve risks and uncertainties that could cause actual results to differ materially from our expectations. For additional information on factors that could affect these expectations, please see the company's filings with the U.S. Securities and Exchange Commission, including but not limited to the company's most recent annual report on Form 10-K and its reports on Form 10-Q and Form 8-K. I will turn the call over to David for some brief remarks, after which we will take your questions. Good morning, everyone. Two years ago, we said, "It's not how much, it's how good." And today, that focus on quality is really paying off. Our commitment to high-quality storytelling, powered by the most exceptional creative talent in front of and behind the camera, continues to be the engine that powers Warner Bros. Discovery. That engine has never been stronger, more differentiated, and more important, both here in the U.S. and around the world. Whether it's The White Lotus, The Pitt, The Last of Us, A Minecraft Movie, Sinners, or The Eastern Gate series internationally, when you look at what's shaping culture today, so much is coming from our studios and reaching audiences on our platforms. These stories aren't just watched, but savored. People immerse themselves in them, share them, and return to them. They spark conversation, drive connection, and fuel fandom. That cultural influence and strength is showing up in our bottom line. On streaming, as you saw in our letter, we delivered another exceptionally strong quarter. Over the last 12 months, we have gained more than 22 million subscribers. In the first quarter, we gained over five million subscribers and delivered $339 million in EBITDA. We are firmly on track to deliver at least $1.3 billion of EBITDA in 2025, up 85% versus 2024, and to surpass our 150 million subscriber goal by the end of next year. What's fueling that success? It's multiple growth levers that provide years of opportunity still ahead, starting with the best stories from HBO, which is delivering the deepest, most consistent storytelling pipeline in its history. It's local language content and local sports that bolster our relevance in every region in the world. That combination makes us really unique. The impact of our stories is then amplified by our increasingly global footprint that still has almost half the world to go. And it's brought to life by a product that has gotten better at enhancing personalization and engagement, but still has a strong roadmap of improvements ahead. On studios, we are also encouraged by the progress in getting back to our $3 billion in EBITDA goal and growing. That's coming from the strength of Warner Bros. Television, the world's leading independent TV studio, which broadens our cultural and commercial impact onto platforms outside of WBD ecosystem with standout shows. It's also coming from Warner Bros. Motion Pictures, where our strategy of a mix of IP-based blockbusters and compelling new originals is gaining traction and delivering results, as demonstrated by the recent big success of A Minecraft Movie and Sinners. Final Destination, which is launching next week, is trending very strong. Looking ahead, we are excited about the strong slate across all of our studios, starting with DC Studios launching Superman in July. We're wrapping on Supergirl and are deep into production on Lanterns, all part of our 10-year plan to reignite the DC brand globally and drive long-term franchise value. What we have now is a powerful combination of a differentiated, profitable, and growing global streaming service with a world-class studio business, both being supplemented by the meaningful continued cash generation from our global linear networks. Warner Bros. Discovery's global reach, growth, and the demand for our quality content offerings gives us real confidence in our ability to create long-term sustainable growth and shareholder value. With that, we welcome your questions. Thank you, and ladies and gentlemen, we will now begin the question-and-answer session. To ask a question, you may press the star followed by the number one on your telephone keypad. To withdraw your question, please press the star followed by the number two. With that, our first question comes from the line of Steven Cahall with Wells Fargo. Please go ahead. Thank you. Good morning, so first, I think there's a lot of industry discussion around your reorganization and some of the optionality that that creates for those assets. I think the biggest debate is just the leverage ratio that global linear networks can handle as we go forward, so I was wondering if you could give us any insights as to what you think a capital structure could eventually look like on an asset like that at some point, what you think a leverage ratio could be that still preserves or increases the equity value that you've got today, and how you can get there in terms of the EBITDA and cash flow trajectory, and then on extra members, do you have a sense of how big that extra opportunity could be for Max in the U.S.? Is it a few million? Is it significantly bigger? How do you lean into all the tentpoles you have upcoming in order to help capture those, as I imagine that drives you towards or even creates some upside to the $1.3 billion in EBITDA? Thank you. Steve, this is Gunnar. Good morning. Obviously, I don't want to speculate on capital structures for hypothetical parts of the company. We are very happy that we were able to get through this reorganization as quickly as we did the internal reorganization that we announced in December. As we laid out, we believe that we are now properly structured to take advantage of whatever opportunities may arise. David has pointed out how this industry is facing generational change, and we believe there is now a lot more transparency for you guys. You'll see that we also issued trending schedules several quarters back, clearly explaining what's going on in the two-division structure that we have implemented, showing the content flows between streaming and studios in that division, etc., so I think we've done a lot of good work here to create transparency and secure optionality, and that's it. I don't think there's any value in speculating about potential capital structures at this point. Restructuring with these two subsidiaries, it's how we run the company, and it also gives real visibility to you and to all of our shareholders to see what we're seeing, to be able to see that we're the biggest maker of content and we have the largest production operation globally, and we have a streaming service that is really growing, and by putting this structure in place, you're able to see that, and you also see that on our traditional business side, we're global. It's free to air. It's sports. It's global news. It's differentiated cable brands, all of which can nourish and enhance our existing streaming business, but it shows you kind of how we look at the business. It also gives us full optionality. Having done that work now, not only can we see this and can you see it, but we can move quickly if we decide to change and make a determination on restructuring. And then, Steven, on the extra member, a couple of things to sort of size the opportunity and think about the timing. Remember, right now, we've launched only in the U.S. It's only available on our retail subscriber base, which obviously is a subset of our total sub-base. And the messaging is part of the parallel path of the password-sharing initiatives that we have is very soft messaging that will start getting firmer and more visible to subscribers over the months to come. So in 2025, I think you're going to see some benefits from it. I think it's going to increase and really be a more 12-18-month initiative as it rolls out to more subscriber cohorts here in the U.S. globalizes later in the year and into 2026, and as the messaging on the password-sharing gets more assertive over the course of more of the back half of the year and really into 2026. Thank you. Your next question comes from the line of Peter Supino with Wolfe Research. Please go ahead. Hi, good morning, and thanks. I wanted to ask you about your sports strategy on Max, understanding that that strategy leverages relationships and licenses that you have through the linear segment. Do you see opportunities to license new IPs going forward? Thanks. The strategy really differs as we look at the global reach of Max. There's a number of markets where it's part of Max. There's a number of markets where it's an add-on. Having the sports outside the U.S. has been really helpful to us. Together with the compelling local content and HBO, it's been an offering that really differentiates us, and we're seeing some meaningful demand. JB, you want to talk more specifically about the U.S.? Yeah, Peter, I'd say we have taken a very disciplined but experimenting with different models just to see how, in this migration from certainly sports in the U.S. from wholesale to maybe a more hybrid or wholesale plus streaming works versus internationally, where generally our European sports business has historically been more like our TNT Sports asset in the U.K., an à la carte sports business, unlike here in the U.S., and so we have various levels of experiments where their subscribers are paying definitively extra for that sports content. Here, we obviously have it ingested into our entertainment, two top entertainment tiers, as we do in Latin America across all the tiers. We see the power of it from an acquisition standpoint. We see the power of it from an engagement standpoint. That said, obviously, we balance that with the cost of these rights. We are evaluating them to see what makes sense because it is hard still to find a business model in streaming alone that makes these premium sports rights profitable and successful in driving those two metrics. So we're going to continue to experiment in a smart way. We do think there's clearly opportunities to leverage powerful sports rights, as we do with Champions League in Brazil and Mexico, as we do with our sports rights here. It's not a one single model. We're going to continue to experiment and see how we evolve the model to make it successful and profitable at the same time. In the end, sports is the rental business. For us, Superman, Batman, DC, Harry Potter, Lord of the Rings, those are the core equivalents of the NFL to us. We own those assets. Game of Thrones, as we build storytelling content that people love everywhere in the world with characters that they love everywhere in the world. And then we could build out that world like we're doing with Harry Potter with 10 consecutive years. In the aggregate, that is where the future of Warner Bros. Discovery is, as the best storytelling company in the world with the most extraordinary library and from The Wizard of Oz to DC and Harry Potter and for us to harvest that. Because one of the advantages that we have is that there's an opportunity to really begin to harvest it. In many cases, we haven't been doing that. That's where I think we'll be spending more of our money and being less dependent on sports, which is a rental business. Thank you. Your next question comes from the line of Bryan Kraft with Deutsche Bank. Please go ahead. Hi, good morning. David, you talked about the strength of Max's distinctive programming as a source of competitive advantage. I wanted to ask first, how is HBO able to turn out so many standout hits like this and do it so consistently? What's the secret sauce there from your perspective? Second, for David or JB, can you talk about how Max is resonating with different demographic groups domestically, particularly younger consumers? And then lastly, I was wondering if you can give us a sense of how time spent on Max in the U.S. compares to time spent in other markets on Max, particularly in Europe and Latin America. Thank you. Thanks very much. Well, first, we have one of the best creative executives, the generational talent with Casey Bloys, who's been at HBO for two decades. And he's also built an amazing team with Franny and Amy and Sarah and Nina and Nancy. This is a group that has been together for 15-plus years. And their ability to tell stories, to partner with great creatives, but they also have a model of quality. When people see that HBO brand, they know that that represents all of that talent. And people have for 50 years been coming to HBO for quality content. And this is the strongest HBO has ever been. The idea of it's not how much, it's how good is something we identified that we're not going to flood the zone. We want to be telling the best stories, and we want to also be taking advantage of all the great quality content over the years, like Game of Thrones and come out with House of the Dragon. We got Euphoria coming up, and a real innovation from that team with The Pitt, which was a medical procedural. John Wells and Noah Wyle together with Casey and Sarah and Channing, who runs our Warner Bros. Television Group, we've really brought the best creatives back to Warner. That together with the great talent we have, plus HBO is a different model for storytelling. We do it very similar to when I was at NBC with Must See TV. Whether it's Sunday night or Thursday night or Monday night, it becomes a cultural happening. People on Thursday night waiting for a week to see The Pitt. That's part of a philosophy of this company of great storytelling with a shared experience, whether it's in the theater, and then people can talk about it, or people come together on Sunday nights and watching The Last of Us. That's the core of what we are. It also, as you saw with The White Lotus, by having that experience over two months or over four months with The Pitt, it makes stars. People feel that they really get to know people in a way that's different than just watching eight episodes in eight hours on a Sunday afternoon. It becomes part of the culture. More and more, that's the future of Max is quality, quality, quality. That's why I think we're seeing a lot of the growth, and that's why we think we have a great future. And then on the two questions around engagement in the U.S. in terms of the younger demographic, we see a very strong and popular for a lot of the reasons that David just described in terms of the topicality, the conversations that people don't want to miss and the FOMO that people don't want to miss. We do well in that younger demographic. And obviously, as you think about our lineup of series, particularly with things like Euphoria coming back, which was one of our youngest skewing and biggest and youngest skewing series, and obviously building into the truly four-quadrant Harry Potter down the line, we have a number of series that is attractive to that demographic. On the engagement across markets, LATAM is our leader, I'd say, with the most complete offering, partly also because that market has multiple pay output deals. Our film offering is the most complete, as well as obviously all the great output coming from HBO and the U.S. side. And we've been at originals for local originals, probably one of the longest in that region of the world. And so in Latin America, it leads the way in terms of engagement. The U.S., Europe are sort of aligned and a little bit behind Latin America. And Asia-Pacific is a smaller piece, largely because obviously our content mix there is largely a U.S.-based Hollywood offering. And so it's got real appeal, but slightly less engagement than what you see in Europe and the U.S. Casey has a home field advantage. He can just walk down the road in the lot and go into Channing's office with her whole team. And whether it's Harry Potter or The Pitt, more and more, a lot of the content, we have really two of the best studios. We have the studio for HBO, and then we have the Warner Bros. TV studio. And yes, we produce for Apple and Netflix some of their best content, but that's our home field. Thanks so much. Appreciate it. Your next question comes from the line of David Karnovsky with J.P. Morgan. Please go ahead. Hi, thank you. Maybe I'll ask on the macro. The release noted no material impact over the last month. Wanted to see if you could dig in a bit on what you're seeing across advertising channels and hearing from your marketing partners and how that informs your view of the coming upfront. And then for Gunnar, corporate EBITDA was nicely improved over the last quarter and last year. Maybe just walk through some of the items helping there and what should we think of as kind of run rate permanent savings. Thanks. So yeah, look, starting with the macro question, the good news is so far, so good. As you would imagine, for the past five weeks or so, we've been tracking very, very closely all the indicators internally and externally. And the reality is we're not seeing any impact whatsoever to this point. In fact, starting with advertising, which would naturally be the part of our business that would be most impacted by declining consumer sentiment and maybe slowing GDP growth. And I've called out some of the factors impacting Q1 and Q2. And if you do a like-for-like comparison, everything we're seeing right now, Q2 so far is tracking pretty much exactly in line with Q1, corrected for those items that I called out earlier. So I think that is good news at the same time. We do obviously look at sort of external projections, and we have a much more diversified portfolio now than we used to have. But advertising obviously would be at risk to some extent. We have the upfront discussions that are probably going to go a little slower, start a little slower this year. At the same time, we see that being offset by pretty strong scatter at this point. And nonetheless, we've managed through turbulent times as a leadership team. And we would do the same should the outlook deteriorate in the second half. And as you also saw, we did right after the announcement of the tariffs take some precautionary measures, nothing extreme, but we will manage our cost base appropriately for a potentially more turbulent environment here to make sure that we're ring-fencing our financial performance. The corporate cost step down that you saw in the first quarter was a mix. There were some smaller one-time items, but generally speaking, I would expect the corporate cost number to be down year over year for the full year. So no trend change there to call out at this point, David. Thank you. And your next question comes from the line of Rich Greenfield with LightShed. Please go ahead. Hi, thanks for taking the question. Last quarter, Gunnar, I think you said that there would be a net savings from the NBA in 2026 of several hundred million dolars. I guess if we just look at sort of Q1 and Q2, it'd be great to sort of understand what Q1 would have looked like if you peeled back NBA ad revenue and all costs sort of associated with it. I assume there's a net benefit in Q1, but just any way to sort of quantify, and then as you sort of gave that Q2 cost guide and you said that cost would be up year over year, what would it look like? I assume it would obviously be down without the NBA, but just any way to sort of think about those two Q1, Q2 issues would be great. Yeah, so the short answer is yes, it would have been down significantly without the NBA, but let's take a step back and peel back that onion a little bit, so it is true. As we said, we're very happy with how we transformed our sports rights portfolio in the context of the NBA discussions. We have a very strong portfolio now. We've been successful in renewing our affiliate deals, which, as you know, that part is a major driver of monetization for these sports rights. We did also say that 2025 is going to be impacted by some overlap between sort of outgoing and incoming rights, and that is still a thing. If you want a quantification for that, I would say it's okay to model a roughly $300 million cost increase in 2025. Q2 is going to take a big part of that. There's going to be a little bit of a headwind in Q3 as well. And then from Q4 on, this should turn initially into a moderate tailwind. And then to your point, we're going to see very significant improvement in sports rights expenses with the NBA coming out in 2026. So a very material step down from the increases that we saw this year. And again, I think your more specific question on what Q2 would have looked like without the NBA. I want to stay away from quantifying that because there are so many different factors playing into it. But again, if you keep in mind that the NBA was a very profitable property for us, partly because of its value for affiliate discussions, we were able to renew these deals without the NBA. So next year is going to be significantly better from a financial perspective, from that perspective. Thank you. And your next question comes from the line of Jessica Reif Ehrlich with Bank of America Securities. Please go ahead. Thank you. I guess two questions. First, on direct-to-consumer, you've entered into a number of distribution agreements, mostly wholesale agreements, of course, at lower ARPU. Maybe you could discuss some of the drivers you have to increase ARPU over time. And coming into the year, streaming consolidation was widely expected. You talked about optionality. Do you believe there's still opportunity to scale further here? And then maybe just a follow-up on the advertising comments. Yes, there's macro uncertainty, but you've got more tools, particularly in ad tech. So are you coming into the upfront with a different strategy or approach? Jessica, I'll start on the ARPU question. Look, we always evaluate these deals based on ARPU, but really based on lifetime value, including obviously ARPU and the churn dynamics. So you're right that we have a number of distribution partnerships with wholesale partners where we may take a reduced wholesale rate, but obviously have a churn profile that's significantly higher. And we evaluate that on an LTV basis that is accretive to the business. In terms of other levers for ARPU growth, there's several. One, obviously, as we've talked about and we talked about on the previous call, which in the near term, as we said then, I think in our fourth quarter call, will create some downward pressure on ARPU in the initial phase. Remembering that we were only in our ad-supported SKU, which was only available as of a little over a year ago in one market, which is the U.S. We've now rolled out in over 45 markets, and we're seeing great traction in terms of the demand for that in our mix of gross ads. But that's obviously at a lower distribution revenue impact. And the advertising piece of the ARPU calculation there is growing. And the good news is internationally, we're seeing great demand. Our numbers in a variety of the biggest markets are up multiples of what they were even 12 months ago. But that's going to continue to grow, and the ARPU is going to continue to expand over time. And so there'll be growth, we think, on a net ARPU basis from the advertising SKU over time. Obviously, this additional member, extra member SKU will help. As the password sharing crackdown comes, we will also add more subscribers on top of that. There's pricing components that we think are still in some markets slightly below where we think there's opportunity. Price will continue to be a lever that we can push. And then, as we talked about on our earlier question around sports and the upsell of sports, we will be leveraging the upsells to sports in the markets where we have that, particularly in Europe, which will also add more ARPU benefits. Not to mention, obviously, that as we see engagement, as we continue to focus on engagement and the product improvements that we're making, again, particularly on the ad light SKU that we have, that engagement will translate to more time spent, which will translate to obviously more monetization. So those are a couple of the levers that we feel comfortable with. David? Yeah. Well, look, across the board, the streaming inventory on Max, we're seeing just real demand and a tremendous amount of value. And coupled with the growth that we're seeing, for instance, one of the really positive developments that we see now, and it's for more than I think it's for three quarters, is that in Europe, we're net growing. When you take the decline of the traditional business and then you see the growth of our streaming business and our ad light product together, we're seeing meaningful growth across Europe. And in fact, when you look at all of international, the decline in the traditional business is being outrun by the increase in our subscriber and ad revenue so that we're net positive there, which is a really meaningful turn for us. The fact that it's substantial in Europe is a powerful sign. In the U.S., we're not there yet. It's not clear that we'll be able to get there. On the upfront, we'll be emphasizing the streaming inventory on Max, which is really coveted. With what we have coming up on Max, there's a lot of demand specifically for specific titles and to be associated with the quality of content and the fact that it's watched in large groups, which is, there's sports and then there's HBO. Then we have our films coming and the ability to affiliate with those films on ad light. It's Robert Fishman with MoffettNathanson. Please go ahead. Hi, good morning. Two for you guys, if I can. As you shifted away from the more is better streaming strategy, how does the focus on higher quality content change the way you think about the right level of content spending at streaming and the overall company? And should we expect content spend to come down, or is it just a reallocation of those dollars to the bigger bets? And it would also be great to hear your updated thoughts on licensing your library and producing originals for third-party streaming services. You mentioned in the investor letter that the Scooby-Doo show for Netflix as one example. How do you balance what should be exclusive to Max and how has that evolved over the past couple of years? Thank you. Thanks, Robert. Look, Channing's team is having a terrific run with Running Point now and on Apple, Ted Lasso and Presumed Innocent. Presumed Innocent was a title of ours where, to your point, we use that title to create a compelling series with Gyllenhaal and sell that to Apple. It's a very good business for us. Shrinking, Bad Monkey, Abbott Elementary, which we sell to Disney. We're a high-quality provider. It's one of the reasons why some of the best and the brightest people want to come to us because they're not a captive and they can produce content for anyone. A lot of the content, more and more of the content is coming to us, but it's a very substantial business that Channing is running, and it's important for us to be able to sell our content to third parties. As we look at our titles, there are some, or there are many, that are really just for Warner Bros. When you look at the major characters that James Gunn and Peter Safran are developing with their 10-year plan around DC, that is to build asset value for us globally. Everywhere in the world, Wonder Woman, Batman, Superman, Supergirl. So we look at those as big asset builders and big differentiators. Same thing with Harry Potter. And it's why we've leaned in so hard with JK and we'll be doing 10 years of that. Today, we're announcing the date of our Lord of the Rings movie. So there's some premium global IP that's recognizable, Game of Thrones. Those belong to us and they'll only belong to us forever because we're building big assets and a global differentiated strategy around that. So it's those global tentpoles together with quality originals that's what makes our motion picture slate. It's what makes our streaming business so strong. But then we have so much IP at this company. Hanna-Barbera, Looney Tunes. And there's just a lot of titles with the biggest TV and motion picture library in the world where we can take things like Presumed Innocent or Scooby-Doo. And in some cases, we'll find with Scooby-Doo, we can sell something to Ted and Netflix, and that can get very broad acceptance in the marketplace. And then we can follow it with a Scooby-Doo movie and that would be a real win-win for us that we'll take that piece of IP and grow it to a point where it's even more valuable for us. So it's all about harvesting our IP, but recognizing that the most important IP that differentiates us from everybody in the industry will be used to build asset value. Right. And then from a financial perspective, Robert, there is no significant step up in content spend that's associated with this strategy evolution for streaming. We have always been clear. We have significant growth ambitions for the streaming service and for the studio, and we will support that growth ambition with growing content spend over the coming years. But that's going to be a moderate increase, no dramatic step changes. And then maybe the only thing to add on the licensing versus internal use point, if you compare our studio numbers today with a couple of years ago, you'll see that we have continually increased the share of Warner Bros.' output that we're using internally. And you see that in our Intercompany eliminations. It's just an important point to make that every dollar of Intercompany profit that we take out in Intercompany eliminations is really, to David's point, building asset value. That is future streaming profit in waiting. We have built that internal asset in a pretty significant way. This idea of it's not how much, it's how good. We laid down that pipe two years ago. And so what you're seeing now is you're seeing the fruits of that strategy and us doubling down on it because consumers are looking at the quality content and saying, "That's really what they want." And we did get rid of a lot. That was a shift from when we took over and bought this company. And we got rid of a lot of content with a lot of noise around it. But it was part of that overall strategy of we do not want to flood the zone. We want to stay true to the HBO brand, and quality is the lane that we thought was open to us. And the marketplace has said it's wide open. That mixed shift, Robert, as David said, is really away from kids' volume, particularly on the library side, purely, and some obviously less unscripted, and towards more pay one movies, global scripted originals, and select local originals in key markets. Great. Thanks, guys. Your next question comes from the line of Ric Prentiss with Raymond James. Please go ahead. Thanks, Lori. Thanks for taking the questions. I want to follow up on the streaming side. Obviously, you're firmly on track, as you mentioned. As you think about long term, what are the bigger drivers, as you would rank them? Subscriber growth, ARPU growth, cost cutting. What should drive that business up and to the right as we go forward? And then on the studio side, you've mentioned several times your goal to get back to $3 billion. You've talked about your slate, the IP you've got. Help us understand the pacing to kind of get to that number and stay at that number. I mean, on the streaming, I'd say the good news for us, it's not a single or even a small set of levers, so number one is obviously globalization. As David has said repeatedly, we still got almost half the world to go in terms of rollouts in new markets. Number two is in those markets, penetration growth. In In the markets where we already are on sort of same-store sales basis, there's penetration growth. Part of that is driven by things like the introduction of a lower-priced ad light SKU in more markets to sort of go after more price-sensitive consumers, and we're only 12 months into that. And I should say on the first globalization point, remembering that obviously in the beginning of part of next year, we have three of the biggest markets in Europe and three of the biggest markets in the world coming online with Germany, the UK, and Italy. And so that'll be a big bolster. So globalization, penetration growth, ARPU growth in the same points to respond to Jessica's question earlier on better ad sales monetization in particular. The password-sharing crackdown initiative that, again, will take 12-18 months to get full steam, but will create another boost of both subscriber and ARPU growth through the extra member add-on. And then, look, content is obviously the fuel of this entire thing. Content is the stories are the product. And the content slate we have and the Casey and the team have curated over the next 18, 24 months is stronger than anything we've ever had and more consistent. And so that will be another avenue of growth. And lastly, product enhancements. David mentioned it in his opening remarks, but we went from not good to good, but we still have a chockablock roadmap that we're effectuating every day where the product's getting better and better to go from good to great. And so that will help engagement. That'll help time spent. That'll help monetization. So we got five or six different levers that will help create some real tailwind for us here over the next couple of years. The final one is kind of a strategic attack that we've been on for a long time, which is bundling, better together, and putting together a bundle that's not just a bundle for price, but that has a better consumer experience. The real opportunity here is people turn on the TV set and they see 18, 20 apps, and they're sitting down with their Google and trying to figure out where to go. What we did with Disney, that bundle here in the U.S. of Hulu, Disney+, and Max is very compelling. And when you see these bundles, and we're starting to roll them out around the world, as people will look as who is a global player that we can attach to get more scale and to try and find real growth. And in those bundles is, by definition, lower marketing, much lower churn. So when you see churn numbers like we see with Disney, and we're starting to see in some of the bundles we're doing around the world, it's very encouraging. You don't need to remarket to get to some of the same subscribers that are coming in and out. One. And two, you got two or three players marketing to a product. And that product is more satisfying because you can go across without having to come in and come out and come in and come out. And so this is an evolution. Ultimately, there's going to be five or six players. There may be a few regional players that can do marginally well, and they may be overly dependent on regional sports, but there'll be a few global players, probably five or six, that it'll be a better consumer experience. And some of those five or six may even come together in a bundle to make that experience even more compelling. And if you bet on solving for a consumer problem and providing quality content, great storytelling, and a better consumer experience, better consumer experience always provides huge value creation. And so that's our focus. But the bundle, I think, is a big part of it. Bundles. And then, Rick, maybe on the $3 billion target that we put out for the studio, and again, a reminder, that's not guidance for this year, even though we did say that we're expecting to make a very significant step towards that number this year. But two levels to answer that question. One, sort of on the level of the individual business units, there is opportunity everywhere in the studio landscape. Channing and her team have been incredibly successful with TV productions, and there may be more opportunity as she manages the transition of the business model from a very broadcast-heavy output years ago to a more streaming-focused model. Now there's margin and ROI upside there. In the film space, we're starting to see the portfolio strategy come through. David has mentioned this a number of times, the combination of harvesting our own library of IP combined with the right level of original films, the right mix of bigger swings and smaller budget, commercially safer films, etc. We're looking at a blowout second quarter here, showing some of the fruits of that, but again, I don't want to get too focused on that, but I do believe we're going to see more on a longer-term basis. The games business, remember last year, was really impacted by some misses we had in that space. And JB has implemented a pretty significant restructuring of that business, and that should be a growth driver over the longer-term horizon here, and then, frankly, the biggest point underlying all of this is all the transformational change that we have implemented over the past three years. It starts with a much greater collaboration, coordination, the approach that we take to franchise management, the planning that goes into the rollout of every new IP moment, the way the entire company rallies behind each new film and each series that we're creating. That is going to pay dividends for a very long time to come. And we have also, frankly, revamped every step along the value chain from greenlight to the monetization, the windowing of our content. I have no doubt that all of this is going to provide lasting impact. And again, as I said before, what we're not going to see is perfect consistency. It's a hit-driven business, but I have no doubt that we're going to see much greater upside in success and much less downside in the inevitable areas where we're going to miss at times. Last thing I'll say is we're also supporting this growth with investments. I talked about content investments already. We're planning to moderately increase that number every year. But you also saw the CapEx in Q1 slightly up. A lot of that is going into the necessary investments in our studio footprint. And so again, I think this is a great longer-term outlook, longer-term story for the studio, and very short term, we're going to have an absolutely amazing second quarter. Great. Thank you. All right, and at the time, we have four questions. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.