LOS ANGELES and NEW YORK, Nov. 10, 2025 -- Paramount Skydance Corporation (Nasdaq: PSKY) today announced financial results for the third quarter ended September 30, 2025, the company's first financial quarter since Paramount and Skydance Media merged in August 2025. Please visit the Paramount Investors homepage to view David Ellison's, Chairman & Chief Executive Officer (CEO), Paramount, a Skydance Corporation,
letter to shareholders in full.
An audio replay of Paramount Skydance Corporation's 3Q25 conference call will be available on November 10 in the
Events and Webcasts section of Paramount's Investors homepage, and at 866-813-9403 (domestic) or 929-458-6194 (international) using access code 474852.
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About Paramount, a Skydance Corporation
Paramount, a Skydance Corporation (Nasdaq: PSKY) is a leading, next‑generation global media and entertainment company, comprised of three business segments: Filmed Entertainment, Direct-to-Consumer, and TV Media. The Company's portfolio unites legendary brands, including Paramount Pictures, Paramount Television, CBS – America's most-watched broadcast network, CBS News, CBS Sports, Nickelodeon, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance's Animation, Film, Television, Interactive/Games, and Sports divisions. For more information, please visit
www.paramount.com.
PSKY-IR
November 10, 2025
Summary Points:
• In the first 100 days, we have taken significant steps to align our business around our North Star
priorities: 1) investing in our growth businesses anchored by our creative engines and exceptional storytelling; 2) scaling our direct-to-consumer business globally; and, 3) driving efficiency enterprise-wide with a focus on long-term free cash flow generation.
• We have taken early but meaningful steps towards advancing these priorities, including: key
leadership hires, high-impact partnerships, increased investment in our studios, and driving efficiency across the organization.
• True to our mission as a creative company, we are committed to increasing our creative output with more high-quality films, TV series, sports, news, and games to growing audiences worldwide.
• We are investing significantly in our DTC business, our top priority – both content and critical
back-end tech upgrades – to quickly reach scale in engagement, which will drive subscribers,
revenue, and profit, with a more balanced, year-round programming strategy and a focus on
profitable growth. On a full-year basis, we expect DTC to be profitable in 2025 with growth in
profitability in 2026.
• For 2026, we expect total revenue of $30 billion, led by a healthy acceleration in DTC revenue with global profitability. We expect 2026 adj. OIBDA of $3.5 billion and are increasing our run rate efficiency target from $2 billion to at least $3 billion.
Fellow shareholders,
Nearly 100 days have passed since we launched the new Paramount, and we are pleased with the
progress to date. Our goal in bringing together Paramount and Skydance was to honor a company with
over a century of storied history and profound cultural impact, while transforming it for the future
through investments in exceptional storytelling, innovative technology, and strategic growth
opportunities that will shape the next era of entertainment. Today, we are confident we are on the
right path – taking the necessary steps to build a stronger, more enduring company for the future.
Our conviction stems in large part from owning an extraordinary portfolio of world-class brands and
assets, including Paramount Pictures, Paramount Television Studios, CBS Television Network, CBS
Studios, CBS News, CBS Sports, TV Stations and Syndication, Paramount+, Pluto TV, Nickelodeon, MTV, BET, Comedy Central, Showtime, and Skydance’s Animation, Film, Television, Interactive/Games, and Sports divisions. This diverse and powerful lineup uniquely positions us to drive future growth and engage expanding audiences around the globe.
It also gives us the scale, diversity, and reach needed to thrive amid disruption. Our industry is
undergoing a generational transformation, and at Paramount, we are determined not only to adapt,
but to lead – competing with the best in media and entertainment. Our vision is to transform
Paramount into the global home of world-class storytelling, powered by one of the industry’s most
storied studios, the leading broadcast network, and a global, scaled streaming platform that delivers
must-watch programming to audiences everywhere. To achieve this, we must ensure our organization
is built to operate at its full potential – equipped with the right tools, resources, and talent, and
focused on driving sustainable, long-term growth.
With this in mind, on
Day 1 we identified our North Star priorities – areas where we see the greatest
opportunity to invest, innovate, and drive meaningful progress:
• Investing in our growth businesses anchored by our creative engines and exceptional storytelling
• Scaling our direct-to-consumer business globally
• Driving efficiency enterprise-wide with a focus on long-term free cash flow generation
Over the past three months, we have taken early but meaningful steps to advance these priorities –
making key leadership hires, pursuing high-impact partnerships to deliver even more exceptional
stories, sports, and news to our audiences, expanding our world-class roster of creative talent,
reigniting performance across our studios, maximizing the value of our highly profitable CBS portfolio,
and streamlining overlapping functions to drive efficiency across the organization. Through it all, we’ve
stayed true to our guiding purpose: storytelling.
Supercharging Our Creative Engine
At Paramount, we are – and always will be – a creative company. Storytelling remains the heart and
soul of everything we do. Our mission is to entertain audiences around the world with the best films,
television series, sports, news, and games, and we’re committed to continuing to invest boldly in this
core strength.
This starts with talent. We’re proud to have a best-in-class roster of creative talent, both in front of
and behind the camera. Recent highlights include our five-year exclusive deal with Matt Stone and Trey
Parker, co-creators of South Park – the top acquisition driver on Paramount+ in Q3; a four-year
exclusive pact with the Duffer Brothers, the duo behind the global phenomenon Stranger Things, that
includes feature films, television, and streaming projects starting in 2026; an overall film deal with five
time Oscar-nominated filmmaker James Mangold; a first-look television deal with Jessica Biel and
Michelle Purple’s Iron Ocean Productions; a renewed partnership with The Conjuring franchise’s Walter
Hamada; as well as a new horror/thriller label for Paramount Pictures in collaboration with Weapons
producers J.D. Lifshitz and Raphael Margules of BoulderLight Pictures.
We also signed a landmark film partnership with Activision to produce Call of Duty, one of the most
successful video games of all time – uniting legendary director Peter Berg with visionary writer and
creator Taylor Sheridan. While our contract with Sheridan will conclude at the end of 2028, we look
forward to continuing our strong partnership over the next several years.
We’ve also taken important steps to streamline our studio and distribution operations under unified leadership. We merged Showtime/MTV Entertainment Studios, Nickelodeon Live Action, and Skydance Television to form the revitalized Paramount Television Studios. In parallel, our media networks have been restructured under one leadership team to combine CBS’s prolific broadcast and studios business across entertainment, sports, and news with iconic cable brands and platforms such as BET, Comedy Central, MTV, and Nickelodeon. Both changes were made with the goal of achieving greater alignment across leadership, resource allocation and efficiency, and creative focus.
Additionally, we are taking decisive steps to reinvigorate performance across our studios,
particularly within Paramount Pictures. Our 2025 film slate has underperformed, with most titles
expected to miss their lifetime profit targets. This presents an opportunity to recalibrate, and we are
focused on making the necessary improvements to our future slate. At the same time, we plan to grow
our theatrical output to at least 15 films annually beginning in 2026. While this rebuilding process will
take time, we are confident that our strategy positions us to deliver quality films that will resonate with
audiences worldwide and drive sustainable growth.
Beyond our theatrical initiatives, we anticipate a significant expansion of our total television studio output over the coming years, encompassing titles to be distributed both on our own platforms and licensed to third-parties. We’re complementing this strategy with partnerships that expand our reach – including our seven-year exclusive media rights deal with the UFC and our landmark agreement with Zuffa Boxing. Both are highly complementary to our existing sports portfolio. Our expansive UFC media rights partnership represents a once-in-a-decade opportunity to become the exclusive home of a major global sport – the most popular sport available through a single distributor – with marquee events every month, across the US, Latin America, and Australia.
As we expand our leadership in live sports, we’re also reinforcing the foundation of our linear
television business – where CBS continues to be a key driver of revenue growth and profitability.
CBS is a flagship asset for Paramount, and we’re incredibly pleased with the continued strong
performance of the entertainment, sports, and news businesses – both on CBS and Paramount+.
While the overall linear ecosystem faces persistent structural headwinds, CBS continues to perform
well, powered by an amazing line-up that includes: Tracker, NCIS, Boston Blue, Matlock, 60 Minutes,
Survivor, and CBS Sunday Morning, and CBS Sports’ best-in-class offerings, including the NFL, March
Madness, UEFA Champions League, the PGA Tour, The Masters, The PGA Championship, the NWSL,
and more.
Of note, the NFL on CBS had its best October in a decade, averaging more than 19 million viewers. And
November is off to a strong start as well, including the highly anticipated November 2nd match-up
between the Kansas City Chiefs and the Buffalo Bills drawing 31 million viewers and earning
Paramount+ its most-streamed game of the 2025 season and the 3rd most-streamed regular season
game in the platform’s history. Season to date, the NFL on CBS has had its best viewership since the
NFL returned to CBS in 1998 – and we expect strong numbers going forward with CBS Sports set to
broadcast the Thanksgiving Day late afternoon matchup – traditionally the most-watched regular season game of the year – featuring two of the NFL’s biggest teams, the Chiefs and the Cowboys. To round out the season, we’ll have a full slate of NFL playoffs highlighted by the AFC Championship Game on CBS and Paramount+.
On the news side, we are proud to steward one of the world’s most iconic and trusted news
organizations, CBS News. Our mission is clear: to uphold this global platform as a place where people
can engage with facts, gain understanding, and seek open exchange. To further this vision, we acquired
The Free Press, a leading digital news organization co-founded by Bari Weiss, who now serves as
editor-in-chief of CBS News. We are confident that, in the years ahead, CBS News and The Free Press
will reach even broader audiences and set the standard for trusted, principled journalism, while
redefining how CBS News connects and engages with audiences.
Finally, as we’ve emphasized since day one, empowering our creative partners through technology
remains a central focus. This commitment is embodied in some of the recent hires we’ve made –
executives from leading technology companies with proven track records scaling businesses and
driving transformation. As we form our roadmap for priority areas across production, we see an
incredible opportunity in front of us to integrate innovation thoughtfully and responsibly across the
business. As we do this, we will always put creators first as we look to enable our partners with the
best tools and technology. For us, technology will always serve art – never the other way around.
Through these initiatives and investments, our goal is clear: to empower our creative teams to deliver
more high-quality films, television, sports, news, and games to growing audiences worldwide – in ways
that are more aligned, efficient, and performance-driven – while continuing to invest strategically in
areas where we see meaningful opportunities for growth.
Scaling Our Streaming Services
Among these opportunities, our direct-to-consumer business is our top priority, with exceptional
storytelling continuing to be the single greatest driver of subscriber growth and loyalty. In line with this
focus, we are increasing our investment in quality, exclusive programming across our streaming
platforms. This includes new seasons of some of our most popular series, including season 3 of Tulsa
King, which is the most-watched title on Paramount+ worldwide so far in Q4. Mayor of Kingstown
launched its fourth season in late October, and the highly anticipated second season of Landman will
premiere globally on Sunday, November 16. We also recently announced renewals of hit series Dexter:
Resurrection as well as the highly anticipated final seasons of fan favorites Yellowjackets and The Chi.
We also recognize that live sports are a powerful engine for regular engagement – addressing new
audiences, increasing retention, and supporting monetization over time. It is this belief that
underpins our long-term media rights agreements with the UFC – one of the fastest growing sports
with over 100 million domestic fans, Zuffa Boxing, and the Professional Bull Riders’ premier tour,
Unleash the Beast, starting in the 2026 season.
We’re especially excited about our plans for the UFC, whose schedule of monthly marquee events will
enable us to deliver a year-round lineup of live sports, driving stronger subscriber engagement and
retention following CBS Sports’ major events. Additionally, by removing the secondary pay-per-view
paywall – historically a key barrier for UFC fans – we’re making these premium events available to
every Paramount+ subscriber at no additional cost. We’re excited to deliver this exceptional value,
with the cost of an annual subscription to Paramount+ being less than just one UFC pay-per-view event
under prior distribution. We’re confident that greater accessibility will lead to significant incremental
subscriber growth and greater engagement across our platform, creating long-term value for both us
and the UFC.
Of course, live sports are just one part of how we engage audiences. To keep Paramount+ fresh and compelling, our studios will continue to drive original content, while we expand third-party licensing for both Originals and catalog, refreshing our library more regularly.
This approach is designed to deepen viewer engagement and strengthen retention. At the same time,
we are investing in a more balanced, year-round programming strategy for our streaming slate. This
includes establishing an Originals launch calendar with tentpole releases spread across the year,
moving away from the historical concentration around the sports season and year-end surge, which
has previously led to uneven engagement.
Our ongoing investments in Paramount+ are enhancing the value we deliver to consumers. To support
this continued investment, we plan to implement price increases in the US early in the first quarter of 2026, and we recently announced upcoming price adjustments in Canada and Australia. These changes will fuel continued reinvestment in the user experience and deliver an even stronger slate of programming for our customers in the year ahead and beyond.
In addition to delivering a bigger, better slate to Paramount+, we’re sharpening our focus on
optimizing our distribution strategy for long-term revenue and profitability. While we remain
committed to achieving scale from a subscriber perspective, we will prioritize quality growth that
delivers strong returns. This includes shifting away from certain hard bundles and low-margin
subscriptions, reducing investment in select international markets without a clear path to sufficient
scale, retiring free trials, and reviewing discount practices. Our goal is to build a large, loyal, and
profitable subscriber base, ensuring we optimize growth, long-term business value, and support future
investments through sound economic decisions.
Under our new leadership, we’ve also reorganized Paramount’s streaming operations to bring
greater alignment between our global and regional teams. This structure enables faster decision
making, more agile execution, and a cohesive content and distribution strategy across all markets.
We’re also ramping our investment in local content in key regions – including Latin America, Canada,
and parts of EMEA – where we see significant growth potential.
Finally, we are making critical upgrades to the backend of our streaming platforms, beginning with the implementation of a unified technology stack for both Paramount+ and Pluto TV which will
significantly enhance performance, elevate the consumer experience, and drive meaningful cost
efficiencies. At the same time, we are exploring how to best build and deploy AI across personalization
and recommendations, enabling smarter and more satisfying experiences for audiences while fueling
continued innovation across the business.
Driving Efficiency and Optimizing Investment Enterprise-wide
Our third North Star priority is to enhance efficiency and optimize investment across the enterprise, ensuring disciplined resource allocation that generates long-term, sustainable value – with particular emphasis on generating sustainable free cash flow over the long-term. This approach involves making strategic investments in our businesses based on the size of their future opportunities. For instance, in streaming, we will invest more resources to support future growth, while in some areas of our linear business, investment decisions will be focused on optimizing cash flow.
Since the transaction closed, we have been hard at work validating our pre-close plans – confirming
both the investments we intended to make and the efficiencies we expected to capture across the
organization. As anticipated, some areas have exceeded expectations, while others require additional
attention and focus.
One example is our digital advertising business, which has not yet reached the growth potential we
know it can achieve, despite a significant increase in time spent, including on Pluto TV, where
engagement continues to grow while lagging other FAST services in the market. To accelerate progress,
we have partnered with IPG and Publicis across both ad sales and media buying. We are confident
these partnerships will position us for meaningful growth as we continue to strengthen our product
and refine our go-to-market strategy.
Additionally, the opportunity to drive additional cost efficiencies has exceeded our expectations.
Through disciplined cost management and targeted investments in areas with the highest potential, we
are strengthening the business and positioning it for sustainable, long-term success.
Company-wide Workstreams
These and other ongoing efforts feed into our transformation plan, anchored by four enterprise-wide
workstreams focused on unlocking Paramount’s full potential.
The first workstream is making technology a core competency of the company. This will require
evolving our culture to embrace a test-and-learn mindset – encouraging experimentation, enabling
data-informed decisions, and continuously learning from outcomes. The reality is the pace of our
experimentation has slowed in recent quarters due to competing priorities, even as we aim to
accelerate innovation. We expect to quickly reverse this trend by prioritizing the critical role of
technology across our organization.
At the same time, we are advancing several innovation initiatives, including: a converged back-end
platform for our streaming services by the middle of 2026, unifying the company under a single ERP
system by early 2027, and leveraging the full scale of our business to optimize cloud computing spend.
These initiatives make sense financially and accelerate our ability to productize future innovations
including better user experiences, recommendation engines to power search and discovery, and a
reimagined digital ads product.
The second workstream is enhancing industrial efficiency and scalability across our operations.
Central to this effort is the launch of Global Operations, a new enterprise function that unites Global
Business Services, procurement, real estate and facilities, security, and other key functions. The goal is
to unlock value, drive efficiency, and strengthen our operating foundation as One Paramount. While
similar capabilities are common in other industries, they are rare in ours – especially at the scale and
scope we’re envisioning. This initiative will be a core advantage for the company for years to come.
Our Global Business Services organization is consolidating many corporate and business units' activities into end-to-end processes that will be optimized through automation, AI, and a global delivery
footprint. Of note, our real estate and facilities organization is implementing a robust enterprise-wide
plan to optimize our footprint to unify teams – enabling creative excellence, operational effectiveness,
and efficient space utilization as we focus on consolidating our owned facilities, where appropriate.
The third workstream is unifying the organization under clear, cohesive leadership. By consolidating core functions where it adds the most value, we eliminate redundancies and foster stronger collaboration across teams. We are reorganizing the company into three business units – Studios, DTC, and TV Media – streamlining operations and breaking down silos. This structure ensures that decisions are made in the best interest of Paramount overall, enabling faster, more effective choices and keeping us agile and aligned with our vision.
The fourth workstream is optimizing our workforce for the future. This represents the culmination of our broader transformation efforts. At the end of October, as part of our commitment to building a
more efficient and effectively structured organization, we implemented a significant workforce
reduction, impacting approximately 1,000 employees across the company. These were difficult but
necessary decisions, and we remain deeply grateful for the meaningful contributions of those
impacted.
As part of our broader organizational transformation, we have taken deliberate steps to flatten our
structure and enhance agility. Approximately one-quarter of our senior vice presidents and above were
impacted by the workforce reduction, enabling us to streamline decision-making and reduce the
friction that can prevent great ideas from advancing. By optimizing our leadership layers and overall
talent base, we are now better positioned to align resources with our strategic priorities and invest
boldly in areas with the greatest long-term potential.
To further unlock Paramount’s full potential and create a more connected, agile organization, we also
introduced a phased return-to-office plan beginning in January 2026. Under this plan, employees will
transition to being in the office full-time, five days a week. In Phase 1, employees in our LA and NY
offices, at the VP level and below, were offered the option of a voluntary severance package if they are
unable or unwilling to return to the office full time, and approximately 600 employees chose this
option.
In addition to these four enterprise-wide workstreams, we are conducting a comprehensive strategic review of our assets to ensure continued focus on our three North Star priorities. As part of this review, we have divested Televisi贸n Federal, or Telefe, in Argentina, which operates TV stations in Buenos Aires and other domestic markets and maintains distribution agreements with FTA and Pay-TV operators across Argentina and select international regions. Likewise, we are in the process of divesting Chilevision in Chile, which we expect to complete in the first quarter of 2026. These divestitures, identified as non-core to our future growth, will streamline operations and reduce our workforce by approximately 1,600 additional employees.
Transformation Savings
Collectively, these actions – along with additional structural efficiencies still to come – reinforce our
confidence in achieving at least $3 billion in run-rate efficiencies, representing an increase of at least
$1 billion over our original target outlined at the time of the deal announcement in 2024.
Of the anticipated $3 billion plus in total efficiencies, more than $1.4 billion in run-rate savings will
have been executed between the deal announcement and the end of this year, with an additional $1
billion plus in run-rate actions planned for 2026. We expect to complete our transformation program
by the end of 2027. Achieving these efficiencies will require targeted one-time investments, estimated
at approximately $800 million in 2026 and between $400 and $500 million in 2027.
While streamlining the business, we recognize that growth cannot be achieved through cost-cutting.
Accordingly, a portion of the savings generated through our transformation program will be reinvested
in growth investments across programming, technology, and strategic partnerships. At the same time,
we will rigorously evaluate other areas of spend to maximize margins and drive strong free cash flow
generation. To this end, we expect to make incremental programming investments in 2026 in excess of
$1.5 billion, which include our DTC investments in the UFC, Paramount+ Originals, and third-party
catalog licensing and the ramp in our film slate.
Q3 Results and Q4 and 2026 Outlook
Below we discuss our Q3 results and our outlook for Q4 and 2026. Due to reporting requirements
associated with our transaction, our Q3 results and cash flows are reported separately for the period
July 1 through deal closing on August 6, 2025, and the post close period August 7 through September
30, 2025.
In the discussion of financial results, we discuss revenue on a pro forma basis in Q3, which can be
found beginning on page 15. We discuss profitability for the periods before (“predecessor”) and after
(“successor”) the transaction close (subsequently pre-close and post-close) separately in accordance
with the financial reporting requirements for our transaction. Additional supplemental information is
also available on our IR website.
In Q3, total revenue on a pro forma basis of $6.7 billion was flat versus predecessor revenue of $6.7
billion in Q3’24. Breakdown by segment:
• Revenue in our DTC business increased by 17% year-over-year, driven by a 24% increase in
Paramount+ revenue, which accounts for over 80% of our DTC business. Paramount+
subscribers and ARPU3 were similar contributors to revenue growth, with 10% and 11% year
over-year growth, respectively. DTC revenue from non-Paramount+ sources, primarily Pluto,
underperformed the growth of Paramount+, primarily due to lower sell out rates.
• In TV Media, revenue declined -12% year-over-year. Results were driven by advertising declines of -12%, including an eight percentage point headwind from political spending and from the comparison to the recognition in 2024 of revenue that had been previously underreported by an international sales partner; a decline in affiliate revenue of -7% year-over-year was due to a decline in pay TV subscriber volume; along with licensing and other declines of -22% year-over year due to the timing of content delivery.
• Filmed Entertainment pro forma revenue increased 30% year-over-year versus predecessor Q3’24 revenue, primarily due to the consolidation of Skydance licensing and other revenue.
Operating income was $80 million (3% margin) pre-close and $244 million (6% margin) post-close. Adj.
OIBDA was $297 million (12% margin) and $655 million (16% margin) in the same periods. By segment:
• DTC adj. OIBDA was $105 million (12% margin) and $235 million (18% margin) in the pre-close
and post-close periods, respectively. Our results reflect continued revenue growth and efficiency for Paramount+ in addition to a content expense benefit from reductions in content assets resulting from the change in accounting basis resulting from the merger.
• TV Media adj. OIBDA was $282 million (20% margin) and $540M (23% margin) in the same periods. Broad-based cost management supported our margin results in the periods.
• Filmed Entertainment adj. OIBDA was -$36 million (-13% margin) and -$13 million (-3% margin)
in the pre-close and post-close periods, respectively. Performance was below our expectations primarily due to the performance of the in-quarter film slate.
Cash flow from operations was -$175 million and $268 million in the pre-close and post-close periods,
respectively. Free cash flow was -$207 million and $222 million in the same periods. This included
payments for restructuring, transaction-related items, and transformation initiatives of $228 million
and $81 million, respectively.
In Q4’25, we expect total revenue of $8.1 billion to $8.3 billion or 1%-4% growth year-over-year versus
Q4’24 for the predecessor company led by strength in DTC, partially offset by declines in TV Media and Filmed Entertainment. We expect adj. OIBDA of $500 million to $600 million, or a 6.7% margin at the midpoint. We anticipate transformation costs of several hundred million in Q4, which will impact our Q4 reported free cash flow. Additionally, we expect to recognize a restructuring charge of
approximately $500 million in Q4 in our reported statement of operations as part of our realignment
and transformation.
We calculate average revenue per subscriber (“ARPU”) as total Paramount+ revenues during the applicable period divided by the average of Paramount+ subscribers at the beginning and end of the period, further divided by the number of months in the period.
As noted in the financial table above, the predecessor period reflects July 1 to August 6, 2025, and the successor period reflects results from August 7 to September 30, 2025.
For our Q4 forecast for Paramount+, we expect a similar year-over-year increase in ARPU with positive
net adds below the level in Q3 due to the termination of two low-ARPU international hard bundles as
we work to optimize our distribution strategy and maximize long term revenue, as noted above. For
DTC profitability in Q4, we expect adj. OIBDA losses on an absolute basis due to seasonally-weighted
content costs. On a full-year basis, we expect DTC to be profitable in 2025.
As a note on subscriber reporting, starting in Q4’25, we will count only paid Paramount+ subscribers in
our reported figures instead of including those on free trials, as we do currently. At the end of Q3, free
trial subscribers totaled 1.2 million.
For 2026, we expect total revenue of $30 billion, or 4% growth year-over-year versus the midpoint of
our 2025 forecast, led by a healthy acceleration in DTC revenue. In DTC, we expect a strong increase in
Paramount+ ARPU as a result of our upcoming price change and beneficial mix shift within our
subscriber base, driven in part by optimizing our distribution strategy as we expect to terminate
additional international hard bundles in 2026.
We expect our strong DTC revenue growth to be partially offset by declines in TV Media affiliate and
advertising with continued headwinds from the pay TV industry on affiliate revenue and lower
advertising revenue year-over-year. For linear advertising, we expect a more moderate decline versus
2025 including the combined effects of expected political spending in 2026, our new ad agency
partnerships, and the sale of Telefe and the planned sale of Chilevision. In Filmed Entertainment, we
expect theatrical revenue to be down year-over-year as we work to recalibrate our film slate and as we
compare against Mission: Impossible – The Final Reckoning in 2025.
For 2026, we expect adj. OIBDA of $3.5 billion, or an 11.7% margin, driven by progress against our $3
billion-plus efficiencies plan, as well as the incremental investments we are making in the business
across content and technology which are expected to drive both significant DTC revenue growth and
overhead cost reductions in 2027 and beyond.
For the DTC segment, we expect to grow our profitability in 2026, driven by accelerating revenue
growth as well as an ongoing benefit from the new accounting basis, even as we meaningfully bolster
our streaming slate including UFC, South Park, and several hundred million of investment in
incremental film and series for Paramount+ as we focus on building towards long-term success in
streaming. In Filmed Entertainment, we expect to return to profitability on a full year basis in 2026.
We expect free cash flow conversion of approximately 5% before roughly $800 million of non-recurring
transformation costs, as previously noted.
We intend to re-segment our financials starting with our Q1’26 results to reflect our business
reorganization across DTC, TV Media, and Studios. This change will effectively house all production and IP in one place with Studios, including almost all licensing revenue, to give a clearer picture of the
growth and value of our Studios business. The remaining TV Media segment will be comprised of our
broadcasting and cable businesses. There will be no impact to reporting for our DTC segment.
Relentless focus on our North Star priorities will enable us to achieve our medium-term financial
goals, which are:
• Transition the company to have sustainable topline growth driven by DTC leadership,
• with increasing margins and growing FCF conversion,
• while managing our balance sheet to quickly regain investment grade debt metrics.
We see a multi-year path ahead during which time we will make the necessary strategic changes and
investments to reach our goals. Over the mid-term we see a clear opportunity to deliver sustainable
topline growth and meaningfully close the gap between our profit margin and free cash flow
conversion versus those of other leading media companies.
Capital Structure & Capital Allocation
Paramount Skydance ended the quarter with $3.3 billion in cash and cash equivalents and $13.6 billion
in gross debt. As we make progress against our current transformation plan, we expect to achieve
investment grade debt metrics by the end of 2027. We have $433 million in debt maturing over the
next 12 months.
Our capital allocation priorities are to:
1. Invest organically for long-term profitable growth in our business
2. Consider M&A where it accelerates our path towards achieving our North Star and other financial goals
3. Manage our balance sheet to regain and then maintain investment grade credit metrics
4. Return excess cash to shareholders beyond our current dividend once we reach investment grade credit metrics
Closing
As we near the 100-day mark, we are energized by the progress we’ve made and the path ahead. By
maintaining our relentless focus on our North Star priorities, we are building a foundation for multi
year growth as well as technology and cost transformation.
Looking ahead, over the medium term we see real opportunity to expand our topline, grow profitability, and strengthen free cash flow conversion – moving us closer to the performance of leading media companies and driving lasting value for our shareholders.
Today, we are more committed than ever to building a company that honors Paramount’s storied
legacy while positioning us to lead and innovate for the future. Let’s go!
Sincerely,
David Ellison
Chairman & CEO
Paramount, a Skydance Corporation
Cautionary Note Concerning Forward-Looking Statements
This letter contains both historical and forward-looking statements, including statements related to our future financial results and performance, potential achievements, anticipated reporting segments and industry changes and developments. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our objectives, plans or goals are or
may be forward-looking statements. These forward-looking statements reflect our current expectations concerning future results and events; generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: risks related to our streaming business; the adverse impact on our advertising revenues as a result of changes in consumer behavior, advertising market conditions and deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries, including cost increases; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to our decisions to make investments in new businesses, products, services and technologies, and the evolution of our business strategy; the potential for loss of carriage or other reduction in or the impact of negotiations for the distribution of our content; damage to our reputation or brands; losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and content; liabilities related to discontinued operations and former businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; content infringement; domestic and global political, economic and regulatory factors affecting our businesses generally, including tariffs and other changes in trade policies; the inability to hire or retain key employees or secure creative talent; disruptions to our operations as a result of labor disputes; the risks and costs associated with the integration of, and our ability to integrate, the businesses of Paramount Global and Skydance Media, LLC successfully and to achieve anticipated synergies; volatility in the prices of our Class B Common Stock; potential conflicts of interest arising from our ownership structure with a controlling stockholder; and other factors described in our news releases and filings with the Securities and Exchange Commission, including but not limited to Paramount Global’s most recent Annual Report on Form 10-K and their and our reports on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that we do not currently view as material or that are not necessarily known. The forward-looking statements included in this letter are made only as of the date hereof, and we do
not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.
Financial Statement Presentation
On August 7, 2025, Paramount Global and Skydance Media, LLC (“Skydance”) became subsidiaries of Paramount Skydance Corporation, pursuant to a transaction agreement entered into on July 7, 2024 (the transactions contemplated by the Transaction Agreement, the “Transactions”). Our consolidated financial statements within our Form 10-Q for the third quarter of 2025 are
presented in two distinct periods to indicate a new basis of accounting established for Paramount Global’s net assets upon the closing of the Transactions. The periods prior to August 7, 2025 include only Paramount Global and are identified as “Predecessor”, and the periods beginning on August 7, 2025 reflect Paramount Skydance Corporation and are identified as “Successor”. Due to the new accounting basis, the results of operations and cash flows are not comparable between the Successor and Predecessor periods.
The presentation within this letter, financial statements, and supplemental disclosures of non-GAAP financial measures also reflect the distinction between the Successor and Predecessor periods. In addition, in order to help investors view our results in a manner consistent with our management we are including the below supplemental presentation of pro forma revenue, which reflects the inclusion of Skydance revenues after the elimination of intercompany revenues from Paramount Global in each
of the Predecessor periods and, for the third quarter of 2025, the combination of the Predecessor and Successor periods during the quarter.
Refer to Note 1 of our Form 10-Q for the third quarter of 2025 for additional details regarding the new
accounting basis established following the Transactions.
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Paramount Skydance Corporation (PSKY) Q3 2025 Earnings Call Transcript
