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Paramount Earnings Beat: Streaming Boosts Q1 Results

Paramount Skydance reported strong first-quarter financial results, beating Wall Street estimates for both revenue and earnings. The primary drivers of this success were the streaming division and the film studio, with Paramount+ adding 700,000 subscribers and the film segment seeing an 11% revenue increase. However, the traditional TV media business declined by 6% due to continued cord-cutting trends. The company reaffirmed its full-year revenue guidance while preparing for the pending acquisition of Warner Bros. Discovery, expected to close in the third quarter.

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Paramount Earnings Beat: Streaming Boosts Q1 Results

Paramount Skydance surpassed Wall Street expectations for both revenue and earnings in the first quarter, driven significantly by growth in its streaming and film divisions.

Q1 Financial Performance Overview

Paramount reported total first-quarter revenue of nearly $7.35 billion, marking a 2% increase year-over-year. The company's strong performance was attributed to its direct-to-consumer streaming services and its film studio segment.

Key financial highlights compared to Wall Street estimates (LSEG):

  • Earnings Per Share (Adjusted): 23 cents reported vs. 15 cents expected.
  • Revenue: $7.35 billion reported vs. $7.28 billion expected.

Streaming and Film Growth Drivers

The streaming unit demonstrated robust growth, while the film studio benefited from successful releases.

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  • Streaming Revenue: The unit generated $2.4 billion in revenue, representing an 11% year-over-year increase.
    • Paramount+: The flagship service added 700,000 subscribers during the quarter, boosting its revenue by 17% year-over-year. The platform now boasts nearly 80 million subscribers, maintaining growth despite price increases implemented in January.
    • The streaming portfolio also includes BET+ and the ad-supported service, Pluto.
  • Film Studio Revenue: Revenue from the film studio increased by 11% to approximately $1.28 billion. The success of films like "Scream 7" contributed to this lift. The company noted that its film slate for 2026 has nearly doubled compared to 2025 following the merger with Skydance.

Challenges in Traditional Media

Despite the streaming success, the traditional television media segment faced headwinds due to ongoing industry trends.

  • TV Media Business: This segment, which includes broadcast networks like CBS and cable channels such as Nickelodeon, MTV, and BET, reported $3.67 billion in revenue. This figure represents a 6% decline compared to the same quarter last year, reflecting the impact of cord-cutting.

Corporate Context and Outlook

This report marks the first quarter under Paramount Skydance's new structure, which involves reorganizing financials across streaming, studios, and TV media allocations.

  • Net Earnings: The company reported net earnings of $168 million (15 cents per share), compared to $152 million (22 cents per share) from the predecessor company the previous year.
  • Full-Year Guidance: Paramount reaffirmed its full-year outlook, projecting $30 billion in revenue and $3.8 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
  • Upcoming Deals: The report was issued as the company prepares for the proposed acquisition of Warner Bros. Discovery (WBD), which is anticipated to close by the end of the third quarter. Paramount has agreed to acquire WBD for $31 per share in cash.
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