Paramount Skydance posted a widened net loss of $573 million and grew revenue 2%% to $8.15 billion in its fiscal fourth quarter as the David Ellison-led media giant continued to see declines in the linear TV business.
The TV/media unit posted a 5% revenue decline to $4.7 billion, driven by a 10% drop in ad revenue to $1.9 billion due to political spending and the Big Ten championship in the fourth quarter of 2024 and a 7% drop in affiliate revenue due to lower pay TV subscribers, offset by a 10% increase in licensing. The segment’s adjusted operating profit grew 15% year over year to $1.1 billion as the company prioritizes cost-cutting, targeting at least $3 billion in savings through 2027 with over $2.5 billion in efficiencies through the end of 2026.
However, the company continued to see improvements in streaming, with total revenue climbing 10% to $2.2 billion and a narrowed loss of $158 million from $286 million a year ago. Paramount+ revenue grew 17% to $1.84 billion as the streaming service reached a total of 79 million subscribers, while the remainder of the streaming segment saw a 16% decline in revenue, primarily driven by Pluto TV.
Meanwhile, the filmed entertainment division grew revenue 16% to $1.26 billion due to the consolidation of Skydance licensing and other revenue, but posted a widened loss of $119 million due to a decline in theatrical revenue year over year. Films released in the prior-year period included “Gladiator II,” “Sonic the Hedgehog 3,” and “Smile 2.” Paramount has more than 15 films slated for theatrical release in 2026, up from 8 releases in 2025.
Here are the quarter’s results:
Net loss: A loss of $573 million, compared to a loss of $224 million a year ago.
Earnings per share: a loss of 52 cents per diluted share, compared to a loss of 2 cents per share expected by analysts surveyed by Zacks Investment Research.
Revenue: $8.15 billion, compared to $8.17 billion expected by analyst surveyed by Zacks.
Streaming subscribers: Added 1 million subscribers for a total of 78.9 million. The company’s total subscriber count no longer includes free trialers, who totaled 1.2 million as of the end of the third quarter.
Operating loss: A loss of $339 million, compared to a profit of $129 million a year ago. The figure included $546 million in restructuring and transaction-related costs.
“It’s been a productive six plus months since the launch of the new Paramount, and we are pleased with the progress made in a relatively short time,” Paramount CEO David Ellison told analysts on Wednesday. “Our North Star priorities continue to guide everything we do, and we’re confident we are on the right trajectory and are excited about the opportunities ahead.”
Paramount touts WBD as an ‘accelerant’ amid sale talks
The latest quarterly results come as Paramount continues to engage with Warner Bros. Discovery’s board after it determined that Ellison’s $31 per share offer could “reasonably be expected” to lead to a “superior proposal.”
The tenth bid includes a daily ticking fee equal to 25 cents per quarter beginning after Sept. 30, 2026. Paramount will pay a $7 billion termination fee to WBD in the event the transaction does not close due to regulatory matters. It will also cover a $2.8 billion termination fee that WBD would be required to pay to Netflix and agreed to eliminate $1.5 billion in potential financing costs associated with WBD’s debt exchange offer.
Additionally, the proposal includes an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by Paramount’s lending banks and a “material adverse affect” definition that excludes the performance of WBD’s Global Linear Networks business.
“We approach investment decisions at Paramount, including our effort to acquire WBD, through the lens of our North Star priorities and financial goals,” Ellison wrote in the company’s quarterly shareholder letter. “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.”
The company declined to answer analyst questions about the bid during Wednesday’s earnings call.
WBD’s board has not determined whether the revised Paramount bid is superior to its $83 billion deal with Netflix. In the event that it does, Netflix will have four business days to match Paramount’s offer and negotiate with WBD to propose any revisions to its current deal. The Netflix deal remains in effect and the board is not withdrawing or modifying its recommendation.
In addition to its $31 per share offer, Paramount has taken a hostile takeover bid directly to shareholders after it was rejected by WBD’s board multiple times. As of Feb. 9, 42.3 million of WBD’s total 2.48 billion outstanding shares had been validly tendered to Paramount, though shareholders can withdraw their shares at any time before the offer’s deadline.
Ellison also sued Warner Bros. in January in an effort to extract more details about how the Netflix deal and Discovery Global spinoff were valued and launched a proxy fight in an attempt to sway shareholders to block the Netflix deal and require a vote to complete the Discovery Global spinoff, which is already on track for later this year. Paramount also said it planned to nominate its own director candidates to WBD’s board at the company’s annual meeting.
Shareholders are set to vote on the Netflix deal on March 20 at 8 a.m. ET. Netflix has said it expects a deal to close within 12 to 18 months, while Paramount has argued a potential deal with Warner Bros. would close within a year.
Paramount remains on track for $30 billion in revenue in 2026
Looking ahead, Paramount remains on track for adjusted EBITDA of 3.8 billion and revenue growth of 4% to $30 billion in fiscal 2026, which will primarily be driven by subscription and advertising growth in its streaming business. While the company expects subscribers to grow year over year, it noted that Paramount+ subscribers will only be modestly higher after it exited 4 to 5 million hard bundle subscribers with unattractive economics that accounted for 2% of the service’s revenue in 2025.
It also expects growth in its studio business from its licensing and other segment, including a full-year impact from Skydance revenue, as well as higher licensing across its other studios. Those results will be offset by lower theatrical revenue as it adjusts its film slate and an unfavorable comparison due to lower average box office revenue per film across more releases in 2026.
Meanwhile, Paramount warned that the TV/media division would face continued headwinds to affiliate revenue as a result of declines in its pay TV business and a moderate decline in ad revenue due to the combined impact of political spending in 2026 and the sale of Telefe and Chilevision.
As a result, total revenue growth will be weighted to the second half of the year, while profitability will be evenly weighted. It also expects streaming profitability to grow in 2026 relative to 2025 and said it would reach profitability in its studio segment and have “stable margins” in its TV/media business. Paramount plans to spend in excess of $1.5 billion on content in 2026.
For the first quarter of 2026, Paramount expects between $7.15 billion and $7.35 billion in revenue, or a 1% decline to 2% growth, with strong streaming revenue growth and continued improvement in profitability. Paramount+ subscriber adds will be flat due to the exit of over 1 million subscribers from international hard bundles at the end of 2025. It also expects to incur transaction costs of several hundred million in the first quarter.
More to come…
