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Summary Points:
• Q1 revenue of $7.3 billion grew 2% year-over-year, with profitability exceeding our estimates for the quarter; we are reaffirming our full-year outlook of $30 billion in revenue and $3.8 billion in adj. EBITDA1.
• DTC revenue1 grew 11% year-over-year to $2.4 billion, led by 17% growth at Paramount+, which added 0.7 million subscribers (+1.9 million, excluding the exit of international hard bundle subscribers); DTC adj. EBITDA improved to $251 million (10% margin); we continue to expect accelerating DTC revenue and profit in 2026.
• Our content slate is delivering: Landman is now Paramount+’s most-watched series ever; The
Madison is Taylor Sheridan's strongest and most female-skewing series debut to date with 12.5 million global viewers in its first month; Marshals has reached over 18.5 million global viewers; and Scream 7 is the highest-grossing installment in the franchise's 30-year history.
• CBS holds 13 of the top 20 primetime series, including all four of the top new series, Marshals,
Sheriff Country, CIA and Boston Blue—an achievement no broadcast network has delivered since the early 1990s.
• We are converging our streaming tech stack—on track for a mid-year launch—to deliver a more
personalized, unified experience and enable continuous improvement across discovery and
monetization.
• We remain on track to deliver $3 billion-plus in efficiencies through 2027, with more than $2.5
billion in run-rate efficiencies expected by the end of 2026; TV Media adj. EBITDA1 grew 11% to
$1.1 billion (29% margin) in Q1 as cost discipline more than offset revenue headwinds.
• We have made significant progress toward closing our acquisition of Warner Bros. Discovery by end of Q3'26, including the syndication of a portion of the new equity to strategic investors, securing $10 billion in debt financing, syndicating the remaining $49 billion in bridge financing to 18 global financial institutions, advancing regulatory approvals, and the April 23 approval by WBD shareholders.
1 Non-GAAP measures are detailed in the Supplemental Disclosures at the end of this letter.
Fellow shareholders,
It’s been a busy and productive start to the year with momentum across our Direct-to-Consumer,
Studios, and TV Media segments driving strong Q1 results. We are pleased with the trajectory of our
business as we continue to invest in key areas of growth, drive greater efficiency across the enterprise
and position the company for long-term success. From day one, we set a clear objective: to transform
Paramount by investing in high-quality storytelling and technology, while pursuing opportunities that
will define the next era of entertainment. And we are making meaningful progress—driving strong
financial results while simultaneously managing an industry-shifting transaction.
Across our three segments, Direct-to-Consumer, Studios, and TV Media, the picture is one of deliberate
execution—investing in growth where the opportunity is largest and managing for margin where
structural headwinds persist.
Direct-to-Consumer
On the direct-to-consumer side, we’ve had a strong start to the year, led by the second season finale of
Landman and the debut of The Madison and Marshals. Landman is now the most-watched series in
Paramount+ history, while The Madison delivered Taylor Sheridan’s strongest and most female-skewing series debut to date on streaming, with 12.5 million viewers globally in its first month on the service. Both hit series have been renewed for subsequent seasons. Marshals has also been a standout —premiering on CBS and launching on Paramount+ the next day, it has now reached over 18.5 million
viewers globally to date, including nearly 5 million internationally. Our local originals are also gaining
meaningful traction: Italia Shore Season 3 (Italy) and Canada Shore (Canada), both of which are now
the platform’s top-performing reality series of all time in their respective countries.
Since August, our Direct-to-Consumer team has greenlit more than 20 new and returning series across
scripted, unscripted and animation—broadening both the depth of our slate and the audiences we reach. We’ve also made meaningful progress on platform consolidation, including the successful transition of BET+ content onto Paramount+ ahead of the full service integration expected in early summer. This next step expands the reach of the stories we champion, the creators we support and the culture we represent, bringing more than 1,000 hours of iconic series, films and originals to audiences in one unified experience.
In sports, Q1 included joint CBS simulcasts of three NFL playoff games, UFC, UEFA Champions League, Europa League, and Conference League matches, and college basketball. In total, Paramount+
subscribers have access to ~14,000 hours of sports content this year.
We are especially encouraged by the strong momentum with our exclusive offering of UFC. We
continue to refine how we deliver a premium experience to consumers, including airing portions of two
UFC events on CBS. To date, over 10 million households have watched more than 100 million hours of
UFC programming on our service—delivering viewership more than 15x the average pay-per-view
event over the past two years. Notably, new UFC subscribers are 15 years younger than the average
Paramount+ viewer—and they’re engaging with the service beyond just UFC, taking full advantage of
our broader offering of films and series like South Park.
In January, we implemented price increases across our Essential and Premium tiers in the U.S., Canada,
Australia and Latin America—the first such adjustment since August 2024. The results so far are in-line with our expectations, allowing us to continue reinvesting in the business. Through the quarter,
subscribers increased by 0.7 million, with strong underlying growth partially offset by exiting over 1
million hard bundle subscribers.
To further accelerate our DTC business, we are modernizing our consumer-facing technology to create
more dynamic, personalized, and connected experiences. The convergence of our streaming tech stack
—on track for launch mid-year—will enable continuous optimization across discovery, personalization,
and monetization. Across our streaming products, we are already seeing early momentum through
new features like enhanced mobile experiences and short-form video clips, designed to deepen
engagement and increase frequency.
As part of this evolution, this summer, Pluto TV will experience its most significant update in a decade,
built on the Paramount+ platform, marking a major step forward in personalization and user
experience and reinforcing our position as a player across both free and premium streaming. We’re
also expanding registration and first-party identity on Pluto to provide a better user experience and ad
signal. In the U.S., 65% of Pluto viewing minutes now come from registered users—up nearly 60% year-over-year—and we expect that share to continue rising as we evolve the product experience. We will also continue to drive VOD viewership on the platform—which we believe presents a better overall
consumer experience and is more valuable for advertisers given the intent associated with VOD—with
VOD TV hours per user up 60% following recent updates.
To further support Pluto TV, we are sharpening our content strategy, building a virtuous cycle in which
great programming attracts more viewers, and a better product experience keeps them engaged longer. This approach is already showing results, with strong performance from recently added fan-favorite titles. We see particular strength in nostalgia-driven programming, which is resonating with existing fans while introducing these franchises to a new generation.
Studios
On the theatrical side, we continue to expand our roster of talent, both in front of and behind the
camera, to bring more compelling stories to audiences worldwide. In less than nine months, we have
nearly doubled our slate, growing from eight films in 2025 to 15 in 2026 and are busy ramping our slate
for profitable growth in 2027, 2028 and beyond. One early highlight is Scream 7, co-produced with
Spyglass Media Group, which was the highest-grossing installment in the iconic franchise’s 30-year
history, surpassing $200 million globally.
Our upcoming film slate includes a broad mix of franchise offerings, originals, animated titles, horror,
dramas, R-rated comedies and more. On May 8, Billie Eilish—Hit Me Hard and Soft: The Tour (Live in
3D), directed by James Cameron and Billie Eilish, debuts in theaters, followed over Memorial Day
weekend by the supernatural thriller Passenger, and two weeks later, Scary Movie, part of our first-
look deal with Miramax. Then on June 26, jackass: best and last, the fifth and final installment in the
franchise, arrives in theaters, with additional film releases to follow throughout the year. At the same
time, our creative team is hard at work reinvigorating key franchises while investing in original
storytelling.
We are equally focused on ensuring these stories reach a broad, global audience. Last month at
CinemaCon, the annual gathering for theatrical exhibition, we gave theater owners our commitment to release a minimum of 30 films annually across Paramount and Warner Bros., with every film receiving a full theatrical release and a minimum 45-day window, effective immediately.
This commitment not only supports a healthy entertainment industry and protects the theatrical
experience for consumers, but will support our long-term growth, an important pipeline for engagement and monetization across our platform including licensing and streaming.
At the same time, Paramount Television Studios (PTVS) and CBS Studios continue to be sought-after
partners across the industry. In addition to the slate produced for Paramount+, we continue to deliver
for third parties.
PTVS had several notable milestones this period, including a limited series order for The Corrections at
Netflix and a third-season renewal of Cross for Prime Video. Meanwhile, we are also producing a 2026
slate of new series that includes Ride or Die, the Reacher spinoff Neagley for Prime Video; 12 12 12,
Brothers and Neuromancer for Apple TV; and Hollywood Arts for Netflix. In addition, we have new
seasons of established series such as Reacher, XO, Kitty, Foundation, and Emily in Paris.
CBS Studios—including BET Studios and Nickelodeon Animation Studios—complements this with a
portfolio of more than 60 active series across broadcast and streaming, spanning major franchises, new
entries, and a broad mix of premium, daytime and family programming.
Alongside selling our content, we will continue to invest in acquiring films and series from third-party
producers around the world, supporting top creative talent and distinctive storytelling, including local
market productions that resonate with audiences and drive global subscriber engagement.
TV Media
Our broadcast and linear television business remains a powerful engine of reach, relevance and cash
flow. CBS currently has 13 of the top 20 primetime series, including the #1 news program 60 Minutes,
as well as all four of the top new series, Marshals, Sheriff Country, CIA and Boston Blue—an
achievement no broadcast network has delivered since the early 1990s. We also expect CBS to continue its streak as the #1 in daytime for its 40th consecutive season.
Beyond its broadcast leadership, CBS continues to be a major driver for Paramount+, with CBS titles
accounting for 10 of the top 20 series in time spent on the service during the broadcast season. New
CBS series are breaking through immediately on streaming, with first-year shows Marshals, Sheriff
Country and CIA generating roughly 40% of their audience from Paramount+.
Looking ahead, CBS enters the 2026-27 season with a schedule that is creatively strong and financially
disciplined and built for long-term value—anchored by a strong slate of 19 returning series, continued
franchise expansion that includes NCIS: New York, and new original concepts like Einstein, Cupertino
and Eternally Yours.
Our Sports business also continues to perform strongly, delivering robust viewership across the PGA
TOUR—highlighted by CBS’ most-watched final round of the Masters in over a decade—and the NCAA Division I Men’s Basketball Tournament, where CBS Sports, along with TNT Sports, generated the second-most watched March Madness since 1994.
Building on this momentum, we recently announced a new long-term partnership with the WNBA and
CBS Sports that will significantly expand our women’s sports offering. Under this agreement, CBS
Sports will broadcast up to 20 regular-season games annually across the CBS Television Network and
Paramount+, starting this season—the most WNBA games carried on broadcast television by any
network. We're committed to investing in premium live sports, and this positions us to capture the
growing audience and cultural momentum surrounding women’s basketball.
Driving Efficiency and Optimizing Investment Enterprise-wide
Our transformation program is ahead of schedule. Against our third North Star priority—driving
enterprise-wide efficiency with a focus on long-term free cash flow—we have more than $2.5 billion in
run-rate efficiencies on track for realization by year-end and expect to deliver at least $3 billion in
efficiencies through 2027.
As we’ve previously shared, one of our four major transformation workstreams is to make technology a
core competency of the company. We are transforming Paramount into a tech-enabled media company by unifying our platforms, data, and workflows across the business. This shift is already breaking down silos, increasing discipline, and enabling us to move faster with greater precision. From the rollout of our agentic data warehouse, which is simplifying how teams access and act on data, to the rapid scaling of AI-powered development tools, we are building durable internal capabilities that enhance both speed and quality. Today, nearly 80% of our engineering organization has adopted code-assist technologies, driving meaningful gains in productivity and product quality within the same development cycles, significantly reducing failure rates, and cutting approval times by more than half.
The examples above are just a snapshot of the progress underway, alongside newer initiatives designed to drive engagement and unlock future monetization opportunities. These include expanding into new content formats and interactive features on Paramount+, such as the launch of clips on the Paramount+ mobile app with plans to add gaming, live stats and polling. We’ll also enhance content discovery on Pluto TV through automated carousels, Content Spotlight units, curated collections, and Top 10 experiences. Together, these efforts demonstrate steady, disciplined progress toward a more innovative, efficient and technology-driven Paramount.
One of our core areas of focus has been strengthening our advertising business. We have moved
quickly to restructure our go-to-market approach, rebuild our team, and invest in the capabilities
required to compete in an increasingly digital, performance-driven environment. We consolidated our
national sales organization into a single, client-centric structure under unified leadership, formally
launched Paramount Media Labs—connecting our IP with brand marketers through more integrated
and immersive experiences, and added new talent from leading digital platforms including Amazon,
The Trade Desk, Google, Hulu, and Roku, reflecting a deliberate effort to deepen and broaden our
expertise.
At the same time, we are accelerating investment in ad technology, including Precision+, our AI-powered targeting and optimization product, and we are making continued progress in ad serving,
CRM unification, and yield management. These efforts are beginning to translate into results:
Paramount+ advertising revenue remains strong, digital monetization is improving sequentially across
the portfolio, and our programmatic demand pipeline heading into Q2 is encouraging.
Additionally, at the beginning of Q2 we brought our first divisions in the company live onto Oracle
Fusion, and we plan to have the entire organization on one, unified ERP system by early next year.
Q1 Results and Q2 and 2026 Outlook
A summary and discussion of Q1 results and our Q2 and 2026 outlook are below. As we have
previously noted, we are reporting our Q1'26 results under a new segment structure—including our
reorganization across DTC, Studios, and TV Media and segment expense allocations. Recast financials
for prior periods are reflected in the table [
here] and also available on our IR website and were
previously disclosed via an
8-K filing. Additionally, we present periods before (“predecessor”) and after
(“successor”) the close of the Skydance Transactions in accordance with the financial reporting
requirements for our transaction, further described in the Financial Statement Presentation section in
the back of the letter. Additional supplemental information is also available on our IR website.
Q1’26
In Q1, total revenue of $7.3 billion increased 2% versus revenue of $7.2 billion in Q1'25 for the
predecessor company, led by growth in DTC and Studios revenues, partially offset by a continued
decline in TV Media. Operating income was $616 million (8% margin) including $103 million of
transaction-related costs. Adj. EBITDA was $1.2 billion, a 16% margin, and increased 59% year-over-
year with outperformance driven by disciplined expense management while we continue to invest for
growth across the business. The below discussion by segment includes comparisons to 2025 recast
under the new segment presentation.
Direct-to-Consumer
* Excluding Paramount+ with Showtime, our premium cable channel, which was previously reported under the TV Media segment.
Capital Structure & Capital Allocation
We ended the quarter with $1.9 billion in cash and cash equivalents and $15.5 billion in gross debt. Our
debt went up in the quarter as we drew $2.15 billion on our revolving credit facility to pay the $2.8
billion termination fee WBD owed to Netflix upon entering into our merger agreement. This amount
will be repaid by us from proceeds we will receive from the private placement we entered into in
connection with the WBD transaction. This increase in our debt was offset partially as we repaid $347
million of debt maturing early in Q1 with cash on hand. We have $86 million in debt maturing for the
remainder of 2026.
Acquiring Warner Bros. Discovery
On February 27, we
announced our definitive merger agreement under which Paramount will acquire
WBD, which will accelerate our ambition of building a next-generation media and entertainment
company.
We’re making great progress on our plan to close the transaction by the end of Q3’26 with a number of
important milestones. In April, we
announced that a group of select strategic investors were assigned a
portion of the $47 billion equity investment. This syndication does not relieve the original equity
investors of their contractual commitments made to the company. As detailed in the 8-K, the PIPE
subscription price was updated from a fixed $16.02 per share to a market-referenced price at close—
floored at $12.00 and capped at $16.02. Additionally, we replaced the previously planned rights offering with a dividend of one 10-year warrant per Class B share, exercisable at the syndication price and expected to trade separately on Nasdaq, which we believe is a greater value to our shareholders than the prior rights offering structure.
Subsequently, we also
announced that we successfully secured long-term financing commitments
consisting of $5 billion in term loans and a $5 billion revolving credit facility, secured against the assets
of the combined company at close. We successfully syndicated the remaining $49 billion of bridge
financing to 18 global financial institutions to fund the transaction, which we intend to replace with
additional secured debt across the investment grade and high yield markets prior to closing the
transaction. Existing Paramount notes will remain in place as unsecured obligations following close.
Most recently, on April 23, WBD shareholders voted to approve the merger agreement, another critical
step in our path towards closing. We look forward to closing the transaction in the coming months and
sharing future updates as we work to create a company that serves the creative community and
consumers.
Closing
The first quarter demonstrated what this company is capable of when strategy, content, and execution
align. The WBD transaction, on track for a Q3 close, will amplify that potential significantly and unite
two world-class teams. We are building something lasting—and we are just getting started.
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 in connection with our pending merger with 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 Skydance 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; disruptions the WBD Merger may cause to our and WBD’s business and commercial relationships; the negative impact that a failure to consummate the WBD Merger could have on our business, financial condition, results of operations and stock price; the risk that the WBD Merger may be prevented or delayed or the anticipated benefits reduced if we do not obtain certain regulatory approvals; the risk that the WBD Merger Agreement may be terminated in accordance with its terms, including if any conditions to the closing of the WBD Merger are not satisfied; the risk that litigation relating to the WBD Merger could prevent or delay the closing of the WBD Merger or result in the payment of damages after closing; challenges realizing synergies and other anticipated benefits expected from the WBD Merger, including integrating WBD’s business successfully; risks to our business, financial condition or results of operations as a result of the incurrence of substantial costs and indebtedness in connection with the WBD Merger; risks of reduced ownership and economic interest by our existing stockholders as a result of the WBD Merger; 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.
