- Paramount reported revenue of $7.3 billion on earnings of 15 cents per share, in line with Wall Street estimates compiled by Yahoo Finance.
- The Warner Bros. Discovery merger remains on track to close by the third quarter after securing shareholder approval. The deal is still subject to approval by regulators.
- Shares of the media giant climbed over 3% following the results.
Paramount Skydance’s profits climbed 10% to $168 million and revenue grew 2% to $7.35 billion, fueled by growth in its streaming and studios businesses but offset by mixed results in its TV/Media unit.
Paramount’s direct to consumer business swung to a profit of $251 million and grew revenue 11% to $2.4 billion in the first quarter. Paramount+ added 700,000 subscribers for a total of 79.6 million as revenue increased 17% to $1.97 billion. Excluding the impact of the exit of international hard bundle subscribers, the service added 1.9 million subscribers.
Meanwhile, the studios business saw an 11% increase in revenue to $1.28 billion and profit of $164 million, which reflected the strong theatrical performance of
“Scream 7” and the consolidation of Skydance licensing revenues into
Paramount Television Studios.
As for the TV Media segment, revenue fell 6% to $3.7 billion, but posted a profit of $1.06 billion. The results were weighed down by advertising and affiliate
revenue declines 6% year-over-year each as the pay TV business continues to erode.
Paramount-Warner Bros. Discovery merger scores shareholder approval
The latest quarterly results come as the company’s pending $110 billion merger with Warner Bros. Discovery is on track to close by the third quarter. The deal has been approved by shareholders, but remains subject to regulatory approval.
Regulators in the U.K. are gearing up to begin their review of the deal, with its deadline for public comments closing last week. Paramount has also asked the FCC to approve its foreign investment in the deal, with those investors accounting for 49.5% of the equity of the combined company. Additionally, executives said that there are “no statutory impediments remaining” after the Department of Justice’s Hartt-Scott-Rodino review period expired, though the regulator can still get involved at anytime in the process.
“We’re pleased with momentum and will continue to take the necessary steps to bring this deal to completion,” Ellison told analysts on Monday. “At every stage, we remain guided by our strong conviction that the combination of these two iconic companies and their extraordinary teams will create a leading global media and entertainment company powered by storytelling and accelerated by technology that strengthens competition, serves the creative community and delivers even more compelling stories to audiences worldwide.”
A group of U.S. state attorneys general led by California’s Rob Bonta are also reviewing the deal and weighing whether to take legal action against the merger. Bonta previously told TheWrap that “red flags are everywhere when you have a merger of this type” and that the states are prepared to “act timely,” but declined to provide a specific timeline for when a decision could be made.
If the deal is not closed by Sept. 30, WBD shareholders will receive a 25 cent per share “ticking fee” for each quarter until closing. In the event that the deal does not close at all due to regulatory matters, Paramount will pay WBD a $7 billion termination fee.
In connection with the deal, Paramount secured long-term financing commitments, including $5 billion in term loans and a $5 billion revolving credit facility, secured against the assets of the combined company at close.
It also syndicated the remaining $49 billion in bridge financing to 18 global financial institutions to fund the transaction, which it intends 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.
Additionally, Paramount said its total debt increased after drawing $2.15 billion on its revolving credit facility to pay the $2.8 billion termination fee to Netflix, which will be repaid through a private placement in connection with the merger. That was offset by repaying $347 million in debt maturing in the first quarter. The company has $86 million in debt maturing for the remainder of 2026.
Paramount+, Pluto TV, BET+ tech stack merger on track for summer launch
The company remains on track to merge Paramount+, Pluto TV and BET+ onto a unified backend infrastructure by the summer.
“You will see significant improvements on the platform once we roll that out. But that really is, in our view, getting to the starting line of all the work that we need to get done to really reach to be what we would define as best in class,” Ellison said. “And we are hiring against that goal when you look at the resources that we’re putting into engineering talent and AI talent to really put us in a position to compete with the leaders in the industry. And it’s that combination of art and technology working hand to hand together that drive growth, engagement and all of the key metrics that are required to building a truly scaled business.”
BET+ will be folded into Paramount+ starting in June. In an interview with TheWrap, Paramount Chief Revenue Officer Jay Askinasi previously teased a “complete evolution” of Pluto TV, with the FAST service’s refresh also set to take place this summer. That will include enhanced content discovery through automated carousels, Content Spotlight units, curated collections and Top 10 experiences.
In the U.S., 65% of Pluto’s viewing minutes come from registered users, up nearly 60% year over year, and is expected to continue growing as the product evolves. Video on demand TV hours per user climbed 60% following recent updates.
Paramount+ will also expand into new content formats and interactive features, such as the launch of clips on its mobile app, with plans to add gaming, live stats and polling. It is also exploring adding AI-driven artwork. Chief Operating and Strategy Officer Andy Gordon said Paramount+ is already seeing “high engagement of people looking at clips and then coming into our various forms of content, whether it be news, sports or entertainment” in early testing.
In addition to merging its streaming tech stacks, Paramount has begun transitioning the company onto Oracle Fusion, with plans to have the entire organization on one enterprise resource planning (ERP) system by early next year. It is also setting up AI-based workflows in back office areas such as finance and human resources to help drive efficiencies.
Paramount maintains 2026 revenue guidance of $30 billion
Looking ahead, Paramount expects revenue growth to be more weighted to the second half of the year, but now expects profitability to skew slightly towards the first half.
In the second quarter, it expects revenue of $6.75 billion to $6.95 billion, or a decline of 1% to growth of 1%, led by growth in its streaming and studios businesses and offset by the TV Media unit. It also is forecasting $900 million to $1 billion in adjusted EBITDA, or growth between 4% and 16%.
The quarter will reflect an unfavorable comparison to theatrical revenue in the prior year period with the release of “Mission: Impossible—The Final Reckoning” as well as decelerating ad revenue including lapping the NCAA Final Four and Championship games last year. While it continues to expect subscriber growth at Paramount+, it will be flat quarter over quarter due to the exit of approximately 2 million hard bundle subscribers. It also expects continued improvements in DTC margins and total profitability.
For the full year, Paramount maintained revenue guidance of $30 billion, or 4% year over year growth, and adjusted EBITDA of $3.8 billion. Executives said they would balance near-term profitability with reinvestment as they target over $3 billion in efficiencies. Paramount also continues to expect free cash flow conversion of approximately 5% before roughly $800 million in transformation costs.
The streaming business will continue to grow subscription and ad revenue, excluding the impact of declines at Showtime. While subscriber growth is expected to remain healthy and accelerate year over year, total paid subscribers will only be modestly higher compared to 2025 due to strategic hard bundle exits.
It also expects growth in studios, driven by its licensing and other segment, including the full-year impact of legacy Skydance revenue and higher licensing across Paramount Television Studios and CBS Studios. Despite the better than expected performance of “Scream 7,” the company continues to forecast significantly lower theatrical revenue year over year due to to lower average box office revenue per film across more releases in 2026 as it builds up its pipeline of films in 2027 and beyond.
Paramount continues to expect that streaming and studio profits will grow in 2026 relative to 2025.
