- Paramount reported $7 billion in revenue and a profit of 6 cents per share, compared to $7.04 billion in revenue and a profit of 20 cents per share expected by Wall Street analysts.
- Paramount+, HBO and HBO Max reach reach 203 million aggregate subscribers worldwide. Starting in the fourth quarter, it will stop disclosing subscribers on a quarterly basis.
- HBO Max and Paramount+ will launch a bundle in early 2027 and will be merged onto the same backend within the first year of the merger’s closing
In its first quarter since closing the $110 billion Warner Bros. Discovery merger, Paramount Skydance swung to a profit of $73 million, or 6 cents per share, with revenue climbing 5% to $7 billion. The results were driven by growth in its streaming and studios businesses, which was offset by continued declines in the linear TV business.
Paramount+ revenue grew 21% to $2.13 billion, marking its fastest quarterly growth in 2026, as the serviced added 600,000 subscribers for a total of 82.2 million. When combined with HBO and HBO Max, the three streaming platforms reach 203 million aggregate subscribers worldwide. Meanwhile, Pluto TV has as approximately 75 million monthly active users.
Overall, the direct-to-consumer business posted a profit of $225 million and saw revenue grow 11% to $2.5 billion as it recognized higher costs from planned investment in its programming schedule in the quarter, including the UFC and ongoing investment in original programming.
Studios revenue grew 23% to $1.5 billion and a profit of $129 million, reflecting a strong quarter for secondary market licensing and content produced for third parties. In the third quarter, the studios business released David Ayer’s “Heart of the Beast” starring Brad Pitt, which grossed over $180 million globally, and “PAW Patrol: The Dino Movie,” which grossed more than $160 million worldwide and drove revenue across multiple lines of business, including consumer products.
Paramount Pictures is expected to double its output in 2026 with 15 releases. Titles through the end of 2026 include “The Cat in the Hat,” “Ebenezer” starring Johnny Depp, “Focker-in-Law,” “Dune: Part Three,” “The Angry Birds Movie 3,” and “Mr. Irrelevant” starring David Corenswet and Isabel May.
The TV Media unit posted a $1 billion profit as it benefitted from cost saving initiatives. But revenue fell 7% to $3 billion, driven by an 8% drop in ad revenue and 5% decline in affiliate revenue. The declines were driven by cord-cutting and the absence of Telefe and Chilevision, which were sold in October 2025, offset by higher political ad revenue.
Since the WBD merger did not close until the fourth quarter, Skydance did not include its consolidated results in this report. Shares were down 1.15% following the release of the results.
Skydance outlines cost savings plan
The latest quarterly results come as Skydance is looking to find at least $6 billion in merger-related cost savings as it looks to service nearly $80 billion in net debt. The company will realize 30% of those savings within the first year of the merger and 70% within two years.
The company has identified at least $2.2 billion in cost savings from consolidating redundant back-office and corporate functions, reducing management layers, using shared services, implementing a single enterprise resource planning system, scaling AI workflows, and shifting to lower-cost support functions. It is also rationalizing its real estate footprint while keeping the Paramount and Warner Bros. studio lots.
Skydance has offered some employees voluntary buyouts ahead of the formal layoff announcement and is shifting to a mandatory in-office policy of five days per week. At least 25 people have been impacted by a reorganization in the Skydance Games division.
It also expects at least $1 billion in savings from streamlining its company-wide spend on marketing, including unifying media planning and buying to eliminate audience overlap, coordinating cross-business unit campaigns and maximizing media efficiency at scale.
Additionally, it will generate at least $1.4 billion in technology spending from unifying its enterprise tech stack, streaming ecosystem, and broadcast architecture, merging parallel technology functions, leveraging AI coding tools, and integrating platforms and systems. It also expects at least $1.4 billion in savings from procurement and vendor management.
“We also see opportunity in content, which is both an expense for us but also an investment in building valuable, long-term assets for the company,” the company noted. “With the reach of our combined platforms across streaming, broadcast and cable, each title can work harder for us, and as one company we can make smarter choices about
how we distribute and monetize our slate.”
Skydance to launch Paramount+-HBO Max bundle, host Investor Day in 2027
Looking ahead, Paramount remains on track for the high end of its 2026 profitability forecast at $3.9 billion.
In the fourth quarter, the company expects continued revenue growth in DTC. It also it expects fourth quarter trends in its TV unit to remain consistent with recent quarters and for improved Paramount film slate results to be offset by the underperformance of the Warner Bros. film slate.
In early 2027, Skydance will launch an HBO Max-Paramount+ bundle and expects to bring the two services on the same backend systems within a year of closing. It will also host an investor day in the first half of the year.
It is also on track to release over 30 theatrical films and produce more than 180 television and streaming series. Its 2027 film slate includes “Children of Blood and Bone,” “K-Pop: The Debut,” “Sonic the Hedgehog 4,” “A Quiet Place Part III,” “Godzilla x Kong: Supernova,” “Man of Tomorrow” and “A Minecraft Movie Squared,” the “Ocean’s Eleven” prequel starring Bradley Cooper and Margot Robbie” and “The Lord of the Rings: The Hunt for Gollum.”
By 2030, Skydance expects mid-single-digit annualized revenue
growth, mid-20% adjusted EBITDA margins and more than $10 billion in free cash flow. It also expects to transition the majority of its revenue and profit from the declining linear TV business to the streaming and studios businesses. Additionally, the company plans to invest more than $30 billion in content annually and lower its leverage ratio — a measure of a company’s debt relative to its earnings — to 3x in 2029.
More to come…
