Summary Points:
• For 2026, we continue to expect total revenue of $30 billion, representing 4% year-over-year growth, with DTC being the primary driver, and Adj. EBITDA1 of $3.8 billion.
• DTC revenue grew 10% year-over-year in Q4, fueled by 17% growth at Paramount+, and we expect acceleration into 2026, driven by continued investment in premium storytelling, including: the UFC, Marshals, The Madison, The Agency, Star Trek: Strange New Worlds, and more; we ended the year with 79 million paid subscribers.
• Through our "Paramount One" initiative, we are activating the full strength of our platforms to amplify priority campaigns and tentpole events as demonstrated by the hugely successful launch of the UFC on Paramount+ in January.
• We are firmly on track to deliver at least $3 billion in efficiencies through 2027, with more than $2.5 billion in run-rate efficiencies expected by the end of 2026.
• We are making focused investments in technology and innovation across our streaming business to enhance our product and overall offering, recognizing that sustainable growth is driven not only by what audiences watch, but by the quality of the end-to-end user experience.
1 Non-GAAP measures are detailed in the Supplemental Disclosures at the end of this letter.
Fellow shareholders,
In August, we launched the new Paramount with three 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. Over the past six months, we have made meaningful progress across each of these areas and remain confident in the path we've set to transform this storied company for the future.
Supercharging Our Creative Engine
As a storytelling company our mission is to entertain audiences around the world with the best films, television series, sports, news, and games. We continue to advance this mission by expanding our world-class roster of talent, strengthening our creative engines, and building a stronger slate across film, television, and streaming. We firmly believe that human talent and ingenuity will continue to be the driving factor in creating amazing stories, and with the innovation we're seeing in Al today, our goal is to provide storytellers the best tools available to help bring their ideas to life. At the same time, we're ardent defenders of intellectual property rights, as evidenced by our prompt cease-and-desist to prevent the use of our intellectual property (IP) in the content Seedance 2.0 creates.
Our ambition is to be the home for the industry's leading talent, both in front of and behind the camera. To that end, we have welcomed a growing roster of exceptional creatives - and we are incredibly grateful to them and all of the directors, producers, writers, editors and crew whose talent and dedication drive our success every day.
In December, we signed a first-look, three-year film and TV producing deal with Jon M. Chu, whose films include Wicked: For Good, which saw the biggest global opening ever for a movie based on a Broadway show, Crazy Rich Asians, the highest-grossing romantic comedy in nearly a decade, and many others. We signed a multi-year first-look film and TV producing deal with Issa Rae, the creator of Insecure. And most recently, Paramount Pictures signed a three-year first-look directing and producing deal with filmmaker Dan Trachtenberg, best known for the hit sci-fi thriller 10 Cloverfield Lane and for revitalizing the Predator franchise. Paramount Television Studios also signed an overall deal with Ashley Lyle and Bart Nickerson, the creative forces behind the Yellowjackets series.
Paramount's commitment to delivering quality storytelling that will resonate with audiences worldwide and drive sustainable growth is also reflected in our increased output, with 11 films and 11 new series greenlit since August. We have 15+ films currently dated for 2026-up from 8 releases in 2025.
Among them are: the seventh installment of the Scream franchise, premiering in theaters February 27; concert film
Billie Eilish - HIT ME HARD AND SOFT-THE TOUR (LIVE IN 3D), directed by James Cameron and Eilish;
Scary Movie, part of Paramount's first-look deal with Miramax; an
Untitled Jackass Film with Johnny Knoxville;
PAW Patrol: The Dino Movie, the third film installment of the hit franchise;
Ebenezer: A Christmas Carol starring Johnny Depp;
Street Fighter, in partnership with Legendary Entertainment; the
Untitled John Tuggle Project starring David Corenswet and Isabel May; and Gina Prince-Bythewood's
Children of Blood and Bone, based on the best-selling YA book series.
We will continue to build our slate into 2027 and beyond, including a new, untitled James Wan/Jason Blum/Oren Peli
Paranormal Activity movie; the third installment of the
A Quiet Place franchise;
Sonic the Hedgehog 4, in partnership with SEGA; and a forthcoming
Call of Duty film adaptation in partnership with Activision.
Paramount Television Studios' upcoming series debuts include Taylor Sheridan's newest creations,
Marshals, which premieres on CBS on March 1 and will be on Paramount+ the next day in the U.S. and first-run in many international markets, and
The Madison, starring Michelle Pfeiffer and Kurt Russell, also debuting on Paramount+ on March 14. These join season five of fan favorite
Emily in Paris on Netflix, season two of the hit series
Cross for Prime Video, and season three of
School Spirits on Paramount+.
A core strength of Paramount is our ability to leverage our IP across our ecosystem, maximizing its creative and commercial potential. This integrated approach allows us to amplify our stories across film, television, streaming, live experiences, publishing, and consumer products.
Through our newly launched "Paramount One" initiative, we're able to align our businesses enterprise- wide to cross-promote priority campaigns and tentpole events. In doing so, we mobilize the full power of our platforms behind these priorities, as we did with the hugely
successful launch of the UFC, which became the platform's largest exclusive live event to date, reaching approximately 7 million households in the U.S. and Latin America. This success was propelled by high-impact promotional spots across our CBS properties, including during
THE NFL ON CBS's record-breaking Thanksgiving Day game and during our primetime coverage of New Years Eve on CBS, and more. This companywide coordination and all-hands-on-deck mentality enables us to amplify our reach, accelerate audience engagement, and unlock incremental value across our company and brands.
Another recent example is our
Teenage Mutant Ninja Turtles franchise, which has generated over $10 billion in global retail sales since Paramount acquired the property in 2009. Turtles has been a global phenomenon for more than 40 years, encompassing film, television, live experiences, digital games, publishing, and consumer products. It is one of the most successful franchises in entertainment history, and we are thrilled to be revitalizing the property through an ambitious and comprehensive expansion of
Turtles, designed to drive sustained, multi-year growth. The robust portfolio of planned offerings includes two major theatrical releases - Seth Rogen's sequel to
Mutant Mayhem in 2027 and a
live- action/CG animation hybrid in 2028 - as well as our recently announced
partnership with Mattel for franchise-themed toys, and much more.
Building on this integrated approach, our ecosystem is anchored by platforms that bring our stories to audiences at scale. At the heart of that reach, CBS has the most hit shows on broadcast television with 8 of the Top 10, including the #1 series Tracker, the #1 new show Sheriff Country, and the #1 news program 60 Minutes. The most-watched primetime entertainment lineup returns this week with Marshals and the epic 50th season of Survivor.
In our sports portfolio,
THE NFL ON CBS shattered viewership records throughout the year, culminating in CBS' most-watched NFL season on record, propelled by the most-watched NFL regular-season game ever with the Chiefs-Cowboys game on Thanksgiving Day, with an average of more than 57 million viewers. For the third year in a row,
THE NFL ON CBS national game at 4:25pm ET ranked as the #1 program in all of television, averaging more than 25.8 million viewers. We ended with the AFC Championship Game, which drew nearly 49 million viewers, making it the most-watched postseason game of the year on any network, with the exception of the
Super Bowl.
At CBS News, the leadership team is focused on building 'one newsroom with one mission' - delivering exceptional journalism to the broadest possible audience. With trust in mainstream news and legacy media at historic lows, transformation is essential. The goal is to build a modern news organization equipped for the digital age and rooted in facts, rigorous reporting, and audience-first storytelling.
As part of this revitalization, we are focused on expanding the range of stories covered and the voices amplified. We are reimagining CBS News 24/7 with new formats and programming and by investing in key brands such as 60 Minutes, 48 Hours, and Sunday Morning through podcasts, newsletters, live journalism events, and more.
Scaling Our Streaming Services
Growing our direct-to-consumer business remains our top priority. Recognizing that great storytelling drives engagement, we're investing aggressively in compelling original content to attract a broad audience.
Over the past several months, we've announced several new series - some of which come from third- party production companies and studios as part of our strategy to bring the best storytelling to consumers - including: the legal thriller from A24,
Discretion, starring and executive produced by Nicole Kidman and Elle Fanning; the six-episode limited series
9/12, produced by Paramount Television Studios and
SISTER, starring and executive produced by Jeremy Strong; and
Fear Not, a six-part true-crime limited series, starring and executive produced by Anne Hathaway, and produced with MGM Television.
These will join an already robust upcoming slate that includes
The Madison and the much-anticipated Yellowstone spin-off,
Dutton Ranch, coming to the service this summer. We're about to start production on an extension of Taylor Sheridan's hit series
Tulsa King, titled
Frisco King and starring Samuel L. Jackson. Looking ahead, over the next year we will premiere new seasons of
The Agency,
Star Trek: Strange New Worlds,
Lioness,
MobLand,
Tulsa King, as well as the third installment of
Landman, whose record-breaking second season reached over 25 million subscriber households and has been a top viewed series across all of streaming since its launch in November 2025. Our momentum is exciting, and we anticipate it will carry through to 2027 as our slate really begins to fully represent the vision of our DTC leadership team.
Sports also remains a key driver of streaming growth, particularly our partnership with the Ultimate Fighting Championship. We officially launched our 7-year partnership in January, becoming the exclusive home for all live numbered events and Fight Nights in the US and Latin America and in Australia for Fight Nights and select bouts in the numbered events, and we could not be more pleased with the early performance. As mentioned above, the debut of UFC 324 on Paramount+ exceeded our expectations as the platform's biggest-ever exclusive live event, with Paramount+ seeing its highest global view hours ever the week it launched.
Importantly, that performance was powered by significant investments made in the lead up to the launch. Ahead of UFC 324, our Product & Tech team focused on building and hardening the core platform to deliver a premium, global experience for fans across both live events and video-on-demand (VOD). The team launched approximately 1,400 VOD assets alongside live coverage, supported feeds in three languages, and expanded availability to 20 markets. The team also introduced advanced live features designed specifically for sports, including the ability to rewind live matches, instantly create and share highlight clips, and generate Al-powered recaps of the action - all while ensuring the platform was fully optimized for scale, reliability and seamless performance on day one.
In addition to the 13 marquee numbered events, we have 30 Fight Nights for a year-round lineup. Fans of UFC are coming to Paramount+ for the action and staying longer to enjoy other titles on the platform - we're seeing encouraging early signals across both engagement and retention from our UFC viewers.
On March 7, UFC returns to Las Vegas for UFC 326. The lead up to the last three matches of the fight card will be available on both Paramount+ and CBS, where we expect the reach of CBS will help expand upon the rapidly growing fan base on our platforms. Needless to say, we are incredibly excited about our partnership with the UFC and the growth opportunities ahead.
Another area where we see significant opportunity is with Pluto TV. Pluto continues to see healthy growth in time spent, which, coupled with ongoing improvements to the product experience and content offering, gives us confidence in our long-term trajectory. For example, we added the full
The X Files catalog to Pluto TV in early January, and it has since become a top performing on-demand title.
Of course, sustainable growth in streaming depends not only on what people watch, but on the overall quality of the user experience. With this in mind, we have prioritized investing in technology and data capabilities to enhance our DTC offering. As highlighted last quarter, we are building a unified technology stack for Paramount+ and Pluto TV, with the first implementation milestone targeted for this summer. We are also encouraged by early product and monetization results from increasing the velocity of our experimentation, with A/B testing output increasing significantly quarter-over-quarter in Q4.
Another critical area of investment is our ad sales technology. By modernizing our platform and leveraging advanced data analytics, we can deliver more precise targeting, better measurement, and more engaging ad experiences for both viewers and advertisers. At the same time, we've brought in new leadership for our advertising business and are reworking our go-to-market strategy. We expect these investments will drive incremental revenue, enhance efficiency, and strengthen our offering in the marketplace.
Of note, we launched and piloted Precision+, an Al-powered advertising product that combines Paramount and third-party data to optimize ad delivery in real time, driving meaningful performance gains above benchmarks for advertisers, and giving Paramount greater control over advertising outcomes. We also developed and patented an Al-driven system that automatically detects broken, duplicated, mismatched, or noncompliant ads, ensuring a better experience for viewers and giving advertisers confidence that their campaigns are running correctly.
These examples reflect the deliberate investments we're making across our streaming business to improve our product experience and offering.
Driving Efficiency and Optimizing Investment Enterprise-wide
We've also made strong progress against our third North Star priority: driving enterprise-wide efficiency with a focus on long-term free cash flow generation. In our Q3'25 shareholder letter, we raised our estimate of total efficiencies through our transformation efforts from at least $2 billion to at least $3 billion. And our confidence in achieving this level of efficiency through the business has only grown over the past quarter as we've built upon our early successes across our four major transformation workstreams:
1. Making technology a core competency of the company
2. Enhancing corporate-wide efficiency and scalability across our operations
3. Unifying the organization under clear, cohesive leadership
4. Optimizing our workforce for the future
We are seeing particularly strong progress across the first and second workstreams. For example, in Q4, we executed new partnerships that will drive efficiency in our cloud spend, resulting in savings of over $50 million annually on average. Separately, we made significant progress in converging the back-end systems of our streaming services and remain on track for a mid-year launch. Similarly, we continue to advance the migration of our entire business to Oracle Fusion as our companywide ERP platform, positioning us to respond more nimbly to an evolving landscape. This unified system will streamline operations, improve data visibility, and enable faster, more informed decision-making across the enterprise.
As we modernize our systems with initiatives like Oracle Fusion, we are also retooling the ways our teams work together. In early January, we executed phase one of our return to office initiative across our New York and Los Angeles offices. By fostering greater in-person collaboration, we expect to accelerate innovation and unlock even greater creativity across the organization.
Also of note, we finalized our sale of Chilevisión in January, which, in addition to the divestiture of Telefe in Argentina, represents efforts to focus on our core businesses while streamlining our operations by roughly 1,600.
From an organizational perspective, we have our full leadership team in place, which is focused on transforming all areas of the company. Operationally, we have successfully integrated the Skydance business into our studio operations. Since the Skydance transaction announcement, we are on track to deliver at least $3 billion in efficiencies through 2027, and we are on track to realize over $2.5 billion in total run-rate efficiencies through the end of 2026.
Q4 Results and Q1 and 2026 Outlook
A summary of Q4 results and our Q1 and 2026 outlook are below. As noted last quarter, beginning with
this report, our Paramount+ subscriber metric will reflect only paying subscribers, excluding those on
free trials. Subscriber figures prior to Q4'25 have been restated to exclude free trials.
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| Note: (1) Diluted EPS from continuing operations attributable to Paramount or Paramount Skydance; (2) weighted average number of diluted shares outstanding |
The following discussion summarizes our financial performance and outlook. We discuss profitability for the periods before ("predecessor") and after ("successor") the transaction close (subsequently pre- close and post-close) in accordance with the financial reporting requirements for our transaction. Additional supplemental information is also available on our IR website.
Q4'25
In Q4, total revenue of $8.1 billion increased 2% versus revenue of $8.0 billion in Q4'24 for the predecessor company, led by an increase in licensing and subscription revenues, partially offset by declines in theatrical, advertising, and affiliate revenues. By segment:
• DTC revenue increased 10% year-over-year, driven by 17% growth in Paramount+ revenue. Paramount+ ARPU increased by 10% with paid subscribers up 4%. DTC revenue from non- Paramount+ sources, primarily Pluto, declined -16% year-over-year, primarily due to ongoing monetization headwinds. In Q4, Paramount+ subscribers increased by 1 million quarter-over- quarter.
• In TV Media, revenue declined -5% year-over-year. Results were driven by advertising declines of -10% including a seven percentage point impact from political spending and the Big Ten championship in Q4'24 and a decline in affiliate revenue of -7% year-over-year due to lower pay TV subscriber volume, partially offset by 10% year-over-year growth in licensing.
• Filmed Entertainment revenue increased 16% year-over-year versus Q4'24 revenue, primarily due to the consolidation of Skydance licensing and other revenue, partially offset by a significant decline in theatrical revenue as we compared against the Q4'24 release slate which included Gladiator II, Sonic the Hedgehog 3, and Smile 2.
Operating income was -$339 million (-4% margin), which included $546 million of restructuring and transaction-related costs. Adj. OIBDA was $612 million (8% margin), a 51% increase year-over-year. By segment:
• DTC adj. OIBDA was -$158 million (-7% margin), reflecting seasonally higher content costs somewhat offset by a content expense benefit from reductions in content assets resulting from the change in accounting basis resulting from the merger. Across the year, we saw healthy improvement in DTC adj. OIBDA margins, reflecting continued topline momentum and disciplined investments in growth as well as the impact of our new accounting basis.
• TV Media adj. OIBDA was $1.1 billion (23% margin), up 15% year-over-year, as we continue to prioritize disciplined cost management relative to the declines in pay TV and linear advertising
revenues.
• Filmed Entertainment adj. OIBDA was -$119 million (-9% margin). This performance, which is largely attributed to weak theatrical performance, did not meet our expectations and, as we mentioned in our prior letter, is an area we are actively addressing as we work to rebuild our film slate for profitable growth in 2026, 2027, and beyond.
Cash flow from operations was $217 million in Q4. Free cash flow was $101 million in the same period, including payments for restructuring, transaction-related items, and transformation initiatives of $153 million.
Go-forward reporting
As we have previously noted, we plan to re-segment our business starting with our Q1'26 results to reflect our reorganization across DTC, TV Media, and Studios, which will give better transparency to our results and align with how we manage the business. Recasted financials for prior periods will be provided prior to our Q1'26 report. With our re-segmentation, we also plan to update our segment expense allocations to better reflect how we operate and make cost decisions across the business, with centralized costs that were previously allocated at the segment level moving to corporate overhead. Finally, we will also transition from adj. OIBDA as a measure of non-GAAP profitability to adj. EBITDA, which excludes stock-based compensation.
2026
For 2026, we continue to expect total revenue of $30 billion, or 4% growth year-over-year, inclusive of predecessor and successor periods. We expect DTC will be the primary driver of this growth, with revenue accelerating due to increases in subscription and advertising revenue growth. We expect Paramount+ to have healthy, accelerating underlying subscriber growth year-over-year. However, our strategic decision to exit approximately 4-5 million hard bundle subscribers with unattractive economics, which accounted for less than 2% of Paramount+ revenue in 2025, will result in only modestly higher total paid subscribers compared to 2025. This deliberate mix shift prioritizes strong underlying subscriber growth, accelerating ARPU, and overall revenue growth over reported subscriber count.
We also expect growth in our new Studio segment from licensing and other, including a full-year impact of Skydance revenue, as well as higher licensing across our other studios, partially offset by significantly lower theatrical revenue year-over-year as we work to recalibrate our film slate and compare against Mission: Impossible - The Final Reckoning and due to lower average box office revenue per film across more releases in 2026. In TV Media, we expect continued headwinds to affiliate revenue due to pay TV subscriber declines. We also expect linear advertising declines will moderate versus 2025, including the combined effects of expected political spending in 2026 and the sale of Telefe and Chilevisión. Across the factors above, we'd expect total company revenue to be relatively more weighted to the second half of the year, with profitability roughly evenly weighted.
We forecast adj. EBITDA of $3.8 billion, or a 12.7% margin, which excludes roughly $300 million of stock-based compensation. We will balance near-term profitability with reinvestment as we make progress against our $3 billion-plus efficiencies plan while investing in content and technology, both of which we expect to drive significant DTC revenue growth and overhead cost reductions in 2027 and beyond. In DTC, we continue to expect to grow our profitability in 2026 relative to 2025. We expect to be profitable in our Studio segment, and to have stable margins in TV Media.
We continue to expect free cash flow conversion of approximately 5% before roughly $800 million of transformation costs, as previously noted. We expect future years to have better free cash flow conversion as 2026 is an important year for investing in the transformation of the business and ramping up our content slate, which we expect to fuel growth in 2027 and beyond.
Q1'26
In Q1'26, we expect total revenue of $7.15 billion to $7.35 billion or -1% to 2% growth year-over-year versus Q1'25 for the predecessor company led by DTC revenue growth, partially offset by declines in TV Media and a slight decline in Studios revenue due to comparing against stronger theatrical performance in Q1'25 which included the continued benefit of Sonic the Hedgehog 3 and Gladiator II. For our Q1 DTC forecast, we expect strong revenue growth, accelerating nicely quarter over quarter. Growth will be driven by Paramount+ ARPU growth and domestic subscriber adds, partially offset from the exit of international hard bundles that accounted for over 1 million paid subscribers at the end of 2025. We expect the exit of hard bundles will result in flattish quarter over quarter subscribers.
We expect adj. EBITDA of $900 million to $1 billion, or a 13.1% margin at the midpoint, with approximately $75 million of stock-based compensation in the quarter. We expect continued year- over-year improvement in total DTC profitability in Q1. We anticipate transformation costs of several hundred million in Q1, which will impact our reported free cash flow.
Our medium-term financial goals are to transition to sustainable topline growth driven by DTC, with increasing margins and FCF conversion, while managing our balance sheet to regain investment grade debt metrics.
Capital Structure & Capital Allocation
We ended the quarter with $3.3 billion in cash and cash equivalents and $13.7 billion in gross debt. We continue to expect to achieve investment grade debt metrics by the end of 2027 as we make progress against our current transformation plan. Early in Q1, we repaid $347 million of debt maturing with cash on hand and have $86 million in debt maturing for the remainder of 2026. In late Q4, we extended our outstanding revolving credit facility of $3.5 billion.
Our capital allocation priorities remain:
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
Our Proposal to Acquire Warner Bros. Discovery
On February 24, WBD's Board of Directors determined that Paramount's revised $31 per share, all-cash offer to acquire WBD could reasonably be expected to lead to a "Company Superior Proposal" under the terms of WBD's merger agreement with Netflix, Inc. We welcome the WBD Board's determination and look forward to continuing to engage constructively with WBD to deliver the benefits of Paramount's proposal to WBD shareholders, the creative community and consumers.
For perspective, we approach investment decisions at Paramount, including our offer to acquire WBD, through the lens of our North Star priorities and financial goals. While we are confident in our standalone strategy and growth trajectory for Paramount, we view WBD as an accelerant to achieving these goals more quickly, in a way that is economically compelling for Paramount shareholders.
Closing
While we are pleased with our progress this quarter and year-to-date, we remain focused on the work ahead, confident in our strategy, and committed to delivering long-term value for our shareholders - progress made possible by the tremendous efforts, dedication, and commitment of our people, who continue to drive our success forward.
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 and transactions (including with respect to our cash tender offer for all of the outstanding shares of Series A Common Stock of Warner Bros. Discovery, Inc.) and their expected benefits, and industry trends 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; can generally 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; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to our decisions to invest 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, content and long-lived assets, including finite-lived intangible assets; 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; challenges in protecting and maintaining our intellectual property rights; domestic and global political, economic and regulatory factors affecting our businesses generally; the inability to hire or retain key employees or secure creative talent; disruptions to our operations as a result of labor disputes; 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; litigation relating to the Transactions potentially resulting in substantial costs; volatility in the price of our Class B common stock; the effect our dual-class capital structure and the concentrated ownership may have on the price of our Class B common stock or business; risks related to a private sale of a controlling interest in our Company, including that our stockholders may not realize any change of control premium on shares of our Class B common stock and that we may become subject to the control of a presently unknown third party; risks associated with our status as a "controlled company" under Nasdaq rules, including our exemption from certain corporate governance requirements; risks associated with the lack of voting rights of our Class B common stock; risks that anti-takeover provisions in our amended and restated certificate of incorporation ("Charter") and amended and restated bylaws, and under Delaware law could deter, delay, or prevent a change of control; risks that exclusive forum provisions in our Charter could limit a stockholder's choice of forum for certain claims and discourage lawsuits against our directors and officers; risks that corporate opportunity provisions in our Charter could permit certain persons to pursue competitive opportunities that might otherwise be available to us; risks associated with our holding company structure, including our dependence on distributions from our subsidiaries to meet our tax obligations and other cash requirements; and other factors described in our news releases and filings with the Securities and Exchange Commission, including but not limited to our most recent Annual Report on Form 10-K 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-K for 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.
Refer to Note 1 of our Form 10-K for 2025 for additional details regarding the new accounting basis established following the Transactions.
