PSKY · Q1 2026 Earnings

Cautious

Paramount Skydance Corporation

Reported May 4, 2026

30-second summary

Paramount Skydance opened FY26 with Q1 revenue of $7.347B (+2% YoY), landing at the high end of the $7.15B–$7.35B guide, and a total adj. EBITDA margin of 15.8% — 270bps above the 13.1% guided. Paramount+ revenue +17% on +14% ARPU and 0.7M net adds validates the DTC acceleration thesis on the print, and the WBD process is materially de-risked with U.S. HSR cleared and $10B of permanent financing plus $49B of bridge syndication secured. The forward signal is more measured: Q2'26 revenue guided to $6.75B–$6.95B (-1% to +1% YoY), Q2 adj. EBITDA margin guided to 13.9% midpoint (a ~190bps sequential step-down from Q1's 15.8% actual), and FY26 reaffirmed at $30B / $3.8B EBITDA / 12.7% margin — meaning the back half has to do more work, not less.

Headline numbers

EPS

Q1 FY2026

$0.23

Revenue

Q1 FY2026

$7.35B

+2.0% YoY

Free cash flow

Q1 FY2026

$0.10B

Operating margin

Q1 FY2026

8.4%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$7.35B	+2.0%	$8.15B	-9.8%
EPS	$0.23	—	$-0.12	+291.7%
Operating margin	8.4%	—	-4.2%	+1260bps
Free cash flow	$0.10B	—	$0.10B	-5.0%

Guidance

Q1 FY2026 results beat revenue and margin guidance; FY2026 full-year outlook reaffirmed at $30B revenue (4% YoY) and $3.8B Adjusted EBITDA (12.7% margin), with Q2 guidance implying modest YoY deceleration.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q1 FY2026	$7.15 billion to $7.35 billion (-1% to 2% YoY)	$7.347 billion	within high end of guide range; +2% YoY beat the midpoint of -1% to +2% YoY range	Beat
Adjusted EBITDA	Q1 FY2026	$900 million to $1 billion	Not explicitly reported	Unable to assess; Q1 FY2026 Adjusted EBITDA actual not provided in current quarter actuals	Met
Adjusted EBITDA Margin	Q1 FY2026	13.1%	15.8%	+2.7pts above guide	Met

New guidance

Metric	Period	Guide	YoY
Revenue	Q2 FY2026	$6.75 billion to $6.95 billion (-1% to 1% YoY)	-1% to 1% YoY
Adjusted EBITDA	Q2 FY2026	$0.9 billion to $1.0 billion	—
Adjusted EBITDA Margin	Q2 FY2026	13.9% at midpoint	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EBITDA Margin	FY2026	12.7%	12.7%	no change	Raised

Reaffirmed unchanged this quarter: Revenue ($30 billion (4% YoY)), Adjusted EBITDA ($3.8 billion), Free Cash Flow Conversion (approximately 5% before roughly $800 million of transformation costs)

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Direct-to-Consumer	$2.398B	+11.0%
Studios	$1.283B	+11.0%
TV Media	$3.666B	-6.0%
Paramount+ Revenue	$1.974B	+17.0%

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
Paramount+ Subscribers	79.6 million
Paramount+ Net Adds	0.7 million
Paramount+ ARPU Growth	14% YoY
UFC Subscribers Milestone	10+ million households watching 100+ million hours

Profitability

Q1 FY2026

Segment	Q1 FY2026
DTC Adjusted EBITDA Margin	10%
TV Media Adjusted EBITDA Margin	29%
Total Company Adjusted EBITDA Margin	15.8%
Studios Adjusted EBITDA Margin	13%

Management tone

Narrative arc: First post-merger print (cautiously constructive) → Margin discipline plus WBD overlay (cautious) → Execution with secured commitments (more affirmative).

Q3'25 framed Paramount Skydance as a turnaround thesis with offense-first content commitments and a $3B efficiency target. Q4'25 layered in the FY26 profit-anchor restatement (OIBDA→EBITDA), the >$2.5B run-rate efficiency milestone, and the $31/share WBD bid that management explicitly declined to discuss further. Q1'26 flips that posture: management now leads with completed milestones rather than commitments. The defining sentence is "Across the business, we are getting things done, and it's translating into real momentum." The Q3 turnaround framing has given way to claims of executed transformation — and the print supports the language on margin and DTC, even as forward guidance bakes in a slowdown.

The WBD narrative has moved from "disclosed bid, no further comment" to a de-risked process within one quarter. Q4'25 disclosed the $31 bid and noted WBD's board's "Company Superior Proposal" determination; Q1'26 reports "we have satisfied our U.S. HSR obligations, and there are no statutory impediments remaining" plus $10B of permanent financing and $49B of bridge syndication secured. The shift from regulatory uncertainty to "international approvals only" plus locked financing is the most material tonal change in this print. It also raises the stakes: the standalone plan and the WBD plan are no longer running on independent tracks.

The AI/tech narrative is no longer a supporting function. Q3'25 cited Oracle Fusion, platform convergence by mid-2026, and AI for search/discovery. Q1'26 puts hard adoption numbers on it: 80% of engineering using code-assisted AI, approval times cut by >50%, an "agentic data warehouse," Precision Plus targeting platform, and a Pluto rebuild described as the most significant since inception. The phrasing — "AI-powered capabilities… as core operational drivers" — positions tech transformation as the operating model, not a project line. This is the lever management is leaning on to justify the FY margin trajectory with a softer Q2 revenue start.

What hasn't changed: the back-half-loaded FY26 build remains the central execution risk. Q4'25's $30B reaffirm with a flattish Q1 guide forced a steep back-half ramp; Q1'26's beat doesn't relieve that pressure because management held the FY anchor flat and guided Q2 to flat-to-down YoY at lower margin.

Recurring themes management leaned on this quarter:

Content execution with marquee titles performing beyond expectationsStreaming momentum evidenced by Paramount+ subscriber engagement milestonesOperational transformation through technology and AI integrationWBD merger advancement and deal financing certaintyAdvertiser-first monetization strategy through data and targetingTalent attraction and creative leadership positioning

Risks management surfaced:

International regulatory approvals still required for WBD transactionSignificant operational work ahead on product transformationCompetitive positioning dependent on deal completion

Q&A highlights

Sean Diffley · Morgan Stanley

Business transformation learnings from converging Paramount Plus and Pluto tech stacks, and how AI is transforming the business beyond ad tech

Management highlighted on-track convergence by mid-year, with learnings to accelerate WBD integration. Emphasized 80% of engineering using code-assisted AI, short-form video personalization, significant Pluto platform update coming summer, and backend AI workflow pods for finance/HR/ops efficiency. Oracle Fusion ERP migration milestone completed in Q1.

Convergence of three streaming services targeted for mid-202580% of engineering organization using code-assisted technologyCode-assisted tech cutting approval times by more than 50%Pluto receiving most significant update since platform inception this summer

Rich Greenfield · LightShed Partners

D2C engagement goals for 2026-2027 given size of investments, how tech/UI stack rebuild impacts engagement, and long-term strategy on channel stores

Management emphasized combination of content and tech investments needed. Highlighted 2026 slate including new seasons of The Agency, Star Trek, Lioness, Dutton Ranch, sports including UFC year-round, NFL, March Madness, UEFA Champions League, WNBA partnership, and greenlighting significant third-party series. Convergence by mid-year is described as 'starting line' for best-in-class positioning. On channel stores, taking case-by-case approach focused on win-wins.

2026 slate includes new seasons of The Agency, Star Trek, Lioness, Moblin, Tulsa King, Dutton Ranch, Frisco's KingSports: UFC year-round, NFL, March Madness, UEFA Champions League, new WNBA partnershipThird-party series greenlit: Discretion (Nicole Kidman), 912 (Jeremy Strong), Fear Not (Anne Hathaway)Convergence by mid-2025 described as starting line, not finish line

Michael Morris · Guggenheim Securities

UFC performance details after ~10 events and broader business benefits, and rationale for selling studio content to competitor platforms like Netflix and Prime Video

UFC has exceeded expectations with 10M+ households watching, 100M+ hours viewed. Average UFC viewership 15x higher than historical pay-per-view. Main fight cards on CBS averaging 2.8M viewers (50% higher than ABC NBA primetime). Subscribers 15 years younger on average, engaging with broader platform content. On third-party licensing: management rejects one-size-fits-all approach, evaluates case-by-case. Some series increase viewership when returned to owned platforms. Licensing is material business component and talent recruitment tool.

10M+ households watched UFC on Paramount+100M+ hours of UFC content viewedAverage UFC viewership 15x higher than historical pay-per-view eventsMain fight cards (UFC 326, 327) averaged 2.8M viewers on CBS

Jessica Reeve-Ehrlich · Bank of America Securities

Capital allocation and management attention strategies for WBD integration (second integration in two years), and rationale for 30-film annual commitment given complexity and historical precedent of failure

Management declined to provide detailed WBD-specific planning, stating need to focus earnings call on current business. Addressed 30-film commitment separately: emphasized it represents combined output of both studios already making 30 total films in 2025 (Paramount 15 up from 8, WBD 15). Positioned as powerful accelerant to strategy across three pillars: production premier destination, scaled D2C competitor with 200M+ subscribers across 100+ countries, and linear presence in 200+ countries across portfolio including CBS, CNN, TBS, TNT, Food Network.

Paramount releasing 15 films in 2025 vs. 8 in 2024WBD releasing 15 films in 2025Combined 30 films already being made by two companiesBeloved franchises included: Harry Potter, Top Gun, Star Trek, Looney Tunes, Game of Thrones, Yellowstone

Stephen Cahill · Wells Fargo

Drivers of Paramount+ 17% revenue growth and expectations for acceleration in H2, and accounting treatment of content expense benefit from Skydance transaction affecting EBITDA comparability

Paramount+ revenue growth driven by 14% ARPU increase (price increase in January plus improved subscriber mix) and 700K net adds (2M underlying adds offset by 1.1M hard bundle exits at <$1 RRP). Management flagged D2C EBITDA margin hit expected Q3/Q4 due to slate launch timing. Content expense benefit from Skydance transaction flows through 2025, steps down 2026. Management flagged lighter expenses in Q1 from slower hiring pace and content timing shifts, expects year expenses on track to guidance.

Paramount+ revenue up 17% YoY14% ARPU increase YoY700K net subscriber additions in Q12M underlying subscriber additions

Answers to last quarter's watch list

Q1'26 revenue lands within $7.15B–$7.35B with DTC carrying the growth. Revenue printed $7.347B at the high end of the guide (+2% YoY), with Paramount+ +17% and DTC +11% — supporting the DTC acceleration language. Status: Resolved positively

Q1'26 adj. EBITDA margin of 13.1% midpoint vs. Q1'25 predecessor adj. OIBDA margin of 9.6%. Total company adj. EBITDA margin landed at 15.8%, 270bps above the 13.1% guide. FY26 anchor was reaffirmed at $3.8B / 12.7%, not raised — meaning Q2-Q4 implicitly run below FY average, with Q2 already guided to 13.9%. Status: Resolved positively on the Q1 print; Continue monitoring the FY trajectory.

Paramount+ underlying organic subscriber adds. Reported 0.7M net adds masks 2M underlying additions against 1.1M hard-bundle exits at sub-$1 RRP. Combined with ARPU +14% and Paramount+ revenue +17%, the underlying organic story is intact. Status: Resolved positively

DTC adj. EBITDA margin in Q1'26. DTC recovered to +10% from Q4'25's -7% seasonal trough. Management flagged Q3/Q4 margin compression from slate launch timing, so the FY trajectory isn't linear. Status: Resolved positively on Q1; H2 compression flagged.

Warner Bros. Discovery process evolution. Materially de-risked: U.S. HSR cleared with "no statutory impediments remaining," $10B permanent financing secured, $49B bridge syndicated, close targeted by September 2026. International regulatory approvals are the remaining gating item. Status: Resolved positively

$2.5B+ run-rate efficiencies by end-2026. Not explicitly quantified in the Q1'26 print or Q&A. Management cited operational efficiencies being executed at Paramount that will be applied to WBD, but no incremental milestone update. Status: Continue monitoring

What to watch into next quarter

Q2'26 revenue lands within $6.75B–$6.95B and YoY doesn't go negative. The guide range straddles flat (-1% to +1% YoY). A print at or below the low end raises real questions about the back-half ramp required to deliver the $30B FY anchor.

Q2'26 adj. EBITDA margin holds 13.9% midpoint or better against Q1's 15.8% actual. Management has committed to a sequential step-down; watch whether the magnitude is contained to the guided ~190bps or widens.

Paramount+ Q2 net adds against management's "flattish QoQ" framing from Q4. Q1 delivered 0.7M reported (2M underlying); watch whether underlying organic adds sustain ~2M as hard-bundle exits continue to depress the reported number.

WBD international regulatory milestones and the September 2026 close target. With U.S. HSR cleared and financing secured, international approvals are the remaining gate. Any slippage from September would force a reframing of the standalone vs. combined operating plan.

Studios margin sustainability at +13%. Q1's swing from Q4'25's -9% is encouraging but Q1'26 was licensing-driven. Watch whether the 2026 theatrical slate, ramping into 15+ films/year, can sustain segment EBITDA above breakeven without licensing tailwinds.

$2.5B+ run-rate efficiencies by end-2026 — incremental quantification. Q4'25 introduced the interim milestone; Q1'26 added no update. Watch Q2 for either explicit run-rate progress or evidence of cost-timing drift.

Sources

Paramount Skydance Q1 2026 Press Release / Form 8-K Exhibit 99 — https://www.sec.gov/Archives/edgar/data/2041610/000204161026000022/ex99_q126.htm
Paramount Skydance Q1 2026 earnings call — prepared remarks and Q&A transcript

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