Paramount Feels the Need for Speed in Q2 as ‘Top Gun: Maverick’ Helps Beat Revenue Expectations

The company posted revenue of $7.7 billion on the back of the Tom Cruise film’s $1 billion+ box office performance, but higher content spend led to lower profit

Paramount Earnings
Photo illustration by TheWrap

Paramount Global on Thursday beat analyst revenue expectations for its 2022 second quarter earnings, thanks largely in part to the humongous, $1 billion+ performance of “Top Gun: Maverick.”

The conglomerate, which runs CBS, Viacom and the Paramount film studio, reported revenue rose 19% to $7.7 billion during the quarter, compared with just $6.56 billion year over year, as well as earnings per share of 53 cents. That beat analyst expectations via Yahoo Finance, which had revenue pegged at $7.57 billion but an EPS of 57 cents a share.

“Paramount continues to build momentum with the assets, strategy and ability to compete — and win,” Paramount Global Chief Executive Bob Bakish said in a statement. “In Q2, we grew total company revenue by 19% and took market share in streaming, in broadcast TV, in box office and in upfront dollars, all while increasing our penetration of the most important growth market in media — streaming.”

Despite the success, Paramount’s stock was down 3% in pre-market trading as the company’s increased content spend and lower advertising and affiliate revenues from TV Media caused operating income to fall 33% year-over-year to $819 million, compared to more than $1.2 billion in the year-ago period.

Paramount reported that its global subscribers, which includes Paramount+, Showtime and BET+, reached nearly 64 million, with Paramount+ in particular adding 4.9 million subscribers after it had previously added 6.8 million to the service in Q1. As a result, Paramount+ revenue grew 120% this past quarter as it exceeded 42 million total subscribers. The company’s total global direct-to-consumer footprint reflects the addition of 5.2 million subscribers and the removal of 3.9 million Russian subscribers (including 1.2 million Russian Paramount+ customers).

Paramount+ notched the most sign-ups, gross and net subscriber additions of any premium domestic streaming service in the quarter, according to Antenna Data’s June 2022 report. Its success was partially driven by strong international market launches, including the U.K., Ireland and South Korea.

Though the studio did not provide specific viewership figures, it claimed that “Halo,” “1883,” “The Lost City,” “Sonic the Hedgehog 2,” “Jackass Forever,” “Star Trek: Strange New Worlds,” and the UEFA Champions League generated strong acquisition and engagement as both domestic and international hours watched per household grew year-over-year.

Paramount also reported that Pluto TV has expanded its global Monthly Active Users (MAUs) to nearly 70 million, making it one of the most-used free ad-supported streaming TV service (FAST) in the U.S. Global viewing hours of the service grew by double digits year-over-year for the second consecutive quarter, according to the company’s earnings report.

It’s no surprise that Paramount touted the success of “Top Gun: Maverick” in this earnings report. After taking the gamble of letting it sit on a shelf for years, the wait paid off in a big way this summer, shattering box office records and reaching $1.3 billion worldwide so far. The film powered 126% growth in the company’s filmed entertainment revenue as it passed “Titanic” to become the studio’s highest-grossing domestic film (unadjusted for inflation) of all time. In fact, five Paramount Pictures movies managed to debut atop the box office in the first half of 2022.

Overall, Paramount Global’s quarterly revenue was derived from TV Media ($5.2 billion), Filmed Entertainment ($1.3 billion) and Direct-to-Consumer ($1.1 billion).

Paramount’s TV operations revenue grew just 1% due to declining advertising, affiliate, and subscription revenue. Filmed Entertainment saw an increase in operating income on the back of Paramount’s strong theatrical lineup. DTC revenue increased 56% year-over-year while subscription revenue grew 74% year-over-year to $830 million, mostly due to Paramount+ growth.