PSKY · Q2 2026 Earnings

Cautious

Paramount Skydance Corporation

Reported August 4, 2026

30-second summary

Paramount Skydance printed Q2 revenue of $6.913B (+1% YoY, in the upper half of the $6.75–6.95B guide) and total adj. EBITDA of $1.099B at a 15.9% margin — roughly $100M above the top of the $0.9–1.0B guide and 200bps above the 13.9% guided midpoint. Management raised FY26 adj. EBITDA to $3.8–3.9B (from a $3.8B point) and doubled FY26 FCF conversion to at least 10% (from ~5%) before ~$800M of transformation costs, while reaffirming $30B FY revenue. The cautionary signal is in the forward frame: Q3 Paramount+ subscribers guided "flattish QoQ" against +6% YoY in Q2, and Q3 adj. EBITDA margin steps down to 13.1% midpoint from Q2's 15.9%.

Headline numbers

EPS

Q2 FY2026

$0.18

Revenue

Q2 FY2026

$6.91B

+1.0% YoY

Free cash flow

Q2 FY2026

$0.26B

Operating margin

Q2 FY2026

6.9%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$6.91B	+1.0%	$7.35B	-5.9%
EPS	$0.18	—	$0.23	-21.7%
Operating margin	6.9%	—	8.4%	-150bps
Free cash flow	$0.26B	—	$0.10B	+168.8%

Guidance

Paramount raised full-year Adjusted EBITDA to $3.8–$3.9B (+$0.1B upside) and Free Cash Flow conversion to at least 10% (from ~5%), driven by Q2 beat on profitability ($1.099B EBITDA, 15.9% margin vs. $0.9–$1.0B guide); FY revenue reaffirmed at $30B (4% growth).

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	Q2 FY2026	$6.75 billion to $6.95 billion	$6.913 billion	in-line (within guide range)	Beat
Adjusted EBITDA	Q2 FY2026	$0.9 billion to $1.0 billion	$1.099 billion	above guide (high-end beat)	Met
Adjusted EBITDA Margin	Q2 FY2026	13.9% at midpoint	15.9%	+200 bps above guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$6.95 billion to $7.15 billion	+3.3% to +6.3% YoY
Adjusted EBITDA	Q3 FY2026	$875 million to $975 million	—
Adjusted EBITDA Margin	Q3 FY2026	13.1%	—
Paramount+ Subscriber Growth (QoQ)	Q3 FY2026	flattish quarter-over-quarter	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EBITDA	FY 2026	$3.8 billion	$3.8 billion to $3.9 billion	+$0.1B high-end increase	Raised
Adjusted EBITDA Margin	FY 2026	12.7%	12.8%	+10 bps	Raised
Free Cash Flow Conversion	FY 2026	approximately 5% before roughly $800 million of transformation costs	at least 10% before roughly $800 million of transformation costs	+5 percentage points (100% uplift)	Raised

Segment performance

Q2 FY2026

Segment	Q2 FY2026	YoY
Direct-to-Consumer	$2.474B	+9.0%
Studios	$1.314B	+16.0%
TV Media	$3.128B	-9.0%

Platform metrics

Q2 FY2026

Segment	Q2 FY2026
Paramount+ Subscribers	81.6 million
Paramount+ Subscriber Growth (YoY)	6%
Paramount+ Revenue Growth (YoY)	16%
Paramount+ ARPU Growth (YoY)	12%

Profitability

Q2 FY2026

Segment	Q2 FY2026
DTC Adjusted EBITDA Margin	14.8%
TV Media Adjusted EBITDA Margin	34.0%
Adjusted EBITDA	$1.099 billion
Adjusted EBITDA Margin	15.9%

Management tone

Narrative arc: First post-merger print (cautious) → Margin restatement + WBD $31 bid (cautious) → Executed transformation + WBD de-risked (more affirmative) → First real EBITDA + FCF raise on Q2 beat.

No transcript was available for this quarter — tone commentary is anchored to the press-release disclosures only, so multi-quarter shifts are inferred from what management chose to disclose rather than how they framed it live.

The most consequential shift is the FCF conversion guide moving from "approximately 5%" to "at least 10%" — a doubling in the same fiscal year, on the same $800M transformation-cost base. That is a real change in management's confidence about cash generation, and it is the first time since the merger closed that a forward metric has been raised on genuine operating grounds rather than a measure restatement. The parallel raise in run-rate efficiencies from $2.5B to over $2.7B by end-2026 gives that FCF confidence a concrete cost-side underpinning.

FY EBITDA moving from a point estimate to a range ($3.8B → $3.8–3.9B) is the second signal. Ranges give management room to over-deliver in a way point estimates don't. Given Q1's 15.8% actual vs. 13.1% guide, Q2's 15.9% vs. 13.9% guide, and the pattern of guiding conservatively into seasonal content-cost quarters, the $3.9B high end is now the base case if H2 doesn't shift meaningfully.

The Paramount+ "flattish QoQ" Q3 subscriber guide is the countervailing tell. With ~4M full-year strategic international hard-bundle exits called out (2M already taken in Q2), the flattish Q3 framing signals the underlying-vs-reported divergence is likely to compress further. Whether that's exits accelerating, competitive pressure, or content-timing is not resolvable from the press release alone.

Answers to last quarter's watch list

Q2'26 revenue lands within $6.75B–$6.95B and YoY doesn't go negative. Revenue printed $6.913B, in the upper half of the guide at +1% YoY. YoY stayed positive, and the print anchors the $30B FY reaffirm without requiring an aggressive back-half ramp. Status: Resolved positively

Q2'26 adj. EBITDA margin holds 13.9% midpoint or better against Q1's 15.8% actual. Margin landed at 15.9% — 200bps above the guided midpoint and matching Q1's actual, not stepping down. Two consecutive quarters of ~200bps beat vs. guided midpoint is a repeatable pattern, not a one-off. Status: Resolved positively

Paramount+ Q2 net adds against management's "flattish QoQ" framing from Q4. 79.6M → 81.6M = ~2M QoQ gross adds; +6% YoY, delivered alongside ~2M international hard-bundle exits in the quarter. Underlying subscriber momentum was stronger than reported. Status: Resolved positively on Q2; the Q3 "flattish QoQ" guide is the next test.

WBD international regulatory milestones and the September 2026 close target. 65 jurisdictions have either cleared or elected not to challenge, including the EC, Australia, Brazil, China, U.S., Germany, France, Spain, Canada, South Africa, Saudi Arabia, and South Korea. Pending antitrust litigation remains the open item; management reiterated confidence in close. Status: Continue monitoring

Studios margin sustainability at +13%. Studios revenue +16% YoY in Q2 (vs. +11% in Q1) with segment EBITDA at $36M / 2.7% margin (vs. a $31M loss in Q2'25). Absolute margin remains thin, so the "sustainability at +13%" test isn't yet answered — the segment is profitable but not at the level the watch item implied. Status: Continue monitoring

$2.5B+ run-rate efficiencies by end-2026 — incremental quantification. Resolved positively — raised to over $2.7B run-rate by end-2026 from $2.5B previously, with the $3B+ total Skydance-Paramount efficiency envelope reaffirmed. Status: Resolved positively

What to watch into next quarter

Q3'26 revenue lands within $6.95B–$7.15B (+4% to +7% YoY vs. Q3'25 pro forma). The guide is the first forward quarter where YoY growth accelerates meaningfully (vs. Q2's +1%); a miss on the low end would push the FY $30B/+4% target back into a Q4 crunch.

Q3 adj. EBITDA margin comes in above 13.1% midpoint. With Q1 and Q2 both beating their guides by ~200bps, the pattern is that Q3 actual should print 14–15%. Anything below 13.5% breaks the pattern and would suggest the seasonal content-cost step-up is genuinely more punitive than the prior two quarters.

Paramount+ subscribers "flattish QoQ" — the exit-vs-underlying split. Q2 delivered ~2M QoQ adds alongside ~2M international hard-bundle exits. If Q3 lands truly flat, watch whether management quantifies remaining hard-bundle exits (up to ~2M more implied for H2 given the ~4M full-year figure) vs. underlying deceleration. A flat print carried by ongoing exits is a fundamentally different signal than a flat print without that context.

FCF conversion tracks to at least 10% cumulatively YTD. Q2 FCF was $258M; Q1 was $96M. YTD $354M against H1 revenue of $14.26B is running at ~2.5% conversion. Management is implicitly guiding H2 FCF to inflect materially higher to hit "at least 10%" full-year before transformation costs — Q3 needs to show that inflection or the raise loses credibility.

WBD close targeting September 2026. With 65 jurisdictions cleared, remaining regulatory milestones and the pending antitrust litigation are the swing factors. With FY26 guidance now materially raised on a standalone basis, the strategic case for closing at $31/share versus running the standalone plan gets scrutinized differently.

Studios segment margin progression. Q2 segment EBITDA was $36M / 2.7% — swung to profit YoY but still thin. Q3'26 is the first quarter the 2026 slate begins to test at scale (PAW Patrol: The Dino Movie, Street Fighter, Mr. Irrelevant), with licensing tailwinds continuing alongside.

Sources

Paramount Skydance Q2 2026 Press Release / Form 8-K Exhibit 99 — https://www.sec.gov/Archives/edgar/data/2041610/000204161026000052/ex99_q226.htm

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