PSKY · Q3 2025 Earnings
NeutralParamount Skydance Corporation
Reported November 10, 2025
30-second summary
SENTIMENT: Cautiously constructive Paramount Skydance's first quarter as a combined company delivered essentially flat pro-forma revenue of $6.71B (vs. $6.94B predecessor Q3'24, -3%), with DTC accelerating to +17% pro forma and Paramount+ subscribers reaching 79.1M (+10% YoY) on 1.4M Q3 net adds. TV Media declined -12% pro forma; Filmed Entertainment pro-forma-vs-pro-forma was -4% ($768M vs $799M), though the company's headline framing is +30% vs. predecessor Q3'24 reflecting Skydance consolidation. Either way, management explicitly conceded the 2025 film slate has underperformed and the segment posted adj. OIBDA losses in both pre- and post-close periods. The forward story is the punchline: management raised the run-rate efficiency target from $2B to at least $3B, set 2026 revenue guidance at $30B (+4%) with $3.5B adj. OIBDA, and committed an additional $1.5B+ to content including a paywall-free UFC on Paramount+. This is a turnaround story priced on execution, not on the Q3 print.
Headline numbers
EPS
Q3 FY2025
$-0.01
Revenue
Q3 FY2025
$6.73B
+0.0% YoY
Free cash flow
Q3 FY2025
$0.01B
Operating margin
Q3 FY2025
5.0%
Key financials
Q3 FY2025| Metric | Q3 FY2025 | YoY |
|---|---|---|
| Revenue | $6.73B | +0.0% |
| EPS | $-0.01 | — |
| Operating margin | 5.0% | — |
| Free cash flow | $0.01B | — |
Guidance
Prior quarter data unavailable — comparison not possible.
Segment performance
Q3 FY2025| Segment | Q3 FY2025 | YoY |
|---|---|---|
| Direct-to-Consumer | $1.86B | +10.0% |
| TV Media | $4.298B | -6.0% |
| Filmed Entertainment | $0.59B | -34.0% |
Platform metrics
Q3 FY2025| Segment | Q3 FY2025 |
|---|---|
| Paramount+ Revenue | $1,428M |
| Paramount+ Subscribers | 71.9M |
| Paramount+ YoY Subscriber Growth | 13% |
| Paramount+ ARPU YoY Growth | 11% |
Profitability
Q3 FY2025| Segment | Q3 FY2025 |
|---|---|
| Adjusted OIBDA | $858M |
| Adjusted OIBDA Margin | 12.7% |
| Operating Cash Flow | $265M |
| DTC Adjusted OIBDA Margin | 12% |
Management tone
Three observations stand out from management's first detailed strategic articulation since the merger closed.
Management is leading with content commitments, not synergy math. The UFC deal — described by Rich Greenfield (LightShed) as the largest strategic statement since acquiring Paramount — is being deployed paywall-free on Paramount+ at "approximately one PPV price." Management framed this as a subscriber-acquisition and engagement weapon, citing UFC's 100M US fans and 25% growth since 2019, and explicitly positioned it to fill the male-demographic and summer-month content gaps versus CBS's female-skewing procedurals. This is an offense-first posture, not a cost-out posture, despite the $3B efficiency target.
The tech narrative is unusually concrete for a media company. Management volunteered specifics: three streaming services (Paramount+, Pluto, BET+) currently running on two clouds will converge onto one platform by mid-2026; Oracle Fusion enterprise rollout underway with full ERP unification by early 2027; Dane Glasgow hired from Meta for tech leadership; Jay Ashkenazi from Roku/Publicis hired to run advertising. The Publicis and IPG partnerships include multi-year revenue commitments, not just buying-side cost savings. This reads as a Skydance-imprint operating model being applied to a legacy conglomerate.
Capital discipline messaging is firm but unspecific on the ceiling. Wells Fargo pressed for a total investment ceiling beyond the $3B efficiency target; management declined to give one, citing "long-term value creation" and the team's largest-shareholder position. Andy Warren added that the company is not yet investment-grade across all three rating agencies and intends to manage both the numerator and denominator of the leverage ratio toward investment-grade metrics by end of 2027.
Q&A highlights
Rich Greenfield · LightShed Partners
How does Paramount plan to earn a return on the UFC investment given the higher price paid versus previous deals? How will UFC be monetized across platforms (Paramount+, CBS, cable networks) and what about price increases?
Management emphasized UFC as a unicorn property with 100M US fans, grown 25% since 2019 behind a double paywall. Eliminating the paywall will drive accessibility and growth. UFC will be available on Paramount+ for approximately one PPV price, driving subscriber growth and engagement. CBS will carry some UFC content. Management highlighted UFC as year-round event-based sport perfect for their portfolio given content gaps in summer months and male demographic reach.
Robert Fishman · Moffett Nathanson
What is management's confidence level for Paramount+ to achieve global scale? What role does content spend play in competing with larger platforms? How to balance growing subscriber base while reducing investments in select international markets?
Management outlined two main priorities for achieving scale: increasing content investment (UFC, Zufa Boxing, Duffer Brothers) and technology investments to improve platform. Discussed convergence of three separate streaming services (Paramount+, Pluto, BET+) onto one unified platform by mid-2026. Noted that both content and platform investments are global, not market-by-market. Highlighted Pluto's importance in low-ARPU international markets as entry point to DTC business.
Jessica Reif Ehrlich · Bank of America Securities
Can you provide vision on how tech and entertainment interrelate to drive growth? Provide concrete examples. Also, what specific tools and capabilities do IPG and Publicis partnerships bring to drive ad revenue growth?
Management outlined multiple tech initiatives: convergence of three streaming platforms (mid-2026), Oracle Fusion enterprise integration for operational efficiency and real-time visibility, AI utilization for search/discovery/recommendations and content creation (as artist tool, not replacement). Regarding agency partnerships: IPG and Publicis deals include cost savings on marketing buy, but more importantly, significant revenue commitments over three years and focus on incremental digital advertising. Hired Jay Ashkenazi (formerly Roku/Publicis) as head of advertising business.
Steven Carhall · Wells Fargo
What is the total planned investment in Paramount Skydance over next several years beyond the $3B efficiency target? What did Skydance learn creatively that applies to Paramount Pictures turnaround, especially given studio's historical financial underperformance?
Management declined to provide specific total investment figure, stating focus on long-term value creation and disciplined capital allocation. Emphasized $1.5B+ incremental content investments outlined in letter. On creative learnings: highlighted Skydance's core principle that 'quality is the best business plan' and dedication to excellence, demonstrated by Top Gun Maverick. Applying this to increase Paramount Pictures from 8 films/year to 15+ minimum starting 2026, targeting increased scale and profitability.
David Karnofsky · J.P. Morgan
What is updated view on TV/media segment network portfolio? How are you thinking about advertising and cord-cutting trends in 2026 forecast? Within that context, how are you investing in or optimizing these brands?
Management distinguished between broadcast and cable: broadcast declining modestly (CBS most-watched for 17 years) with content driving significant DTC value; cable accelerating decline. Highlighted CBS's role in 'barbell strategy' with leagues seeking both reach (broadcast) and dollars (streaming). Cable assets (MTV, Comedy Central, BET, Nickelodeon) being transformed digitally as part of scaled streaming strategy rather than divested. Nickelodeon positioned as core kids/family pillar with licensing/consumer products opportunities. No asset spend-offs planned.
What to watch into next quarter
Q4'25 revenue lands within the $8.1B–$8.3B guide. A miss on the first guided print under new management would damage credibility on the FY2026 $30B target before the company gets out of the gate.
Paramount+ net adds trajectory. Q3 delivered 1.4M Paramount+ adds to reach 79.1M. Q4 starts reporting paid subs only (excluding 1.2M free trials), and management already guided positive net adds below Q3 due to terminating two low-ARPU international hard bundles. Watch whether the underlying organic add cadence holds as UFC and the US/Canada/Australia price increases land.
DTC adj. OIBDA trajectory. Management guided Q4 DTC to absolute adj. OIBDA losses on seasonally-weighted content costs, while reaffirming full-year 2025 DTC profitability and growth in 2026. Watch the size of the Q4 step-down and whether the post-close accounting-basis tailwind continues to flatter the comparison.
Filmed Entertainment slate recovery. Pro forma -4% in Q3 (vs. pro forma Q3'24) with management conceding most 2025 titles will miss lifetime profit targets. The slate scales to 15+ films starting 2026 — Q4 (vs. Mission: Impossible – The Final Reckoning comp) and Q1'26 will show whether stabilization is underway.
Platform convergence milestones. Mid-2026 target for unifying Paramount+, Pluto, and BET+; early-2027 target for single ERP. Watch for interim engineering milestones or slippage commentary — a delay pushes out the operating leverage thesis.
Free cash flow and de-leveraging path. Net combined Q3 FCF across the two periods was modest (-$207M pre-close + $222M post-close), with Q4 guided to absorb several hundred million in transformation costs and a ~$500M restructuring charge. Management committed to investment-grade metrics across all three agencies by end-2027 — watch working capital and cash tax improvements management flagged as the primary FCF levers.
Sources
- Paramount Skydance Q3 2025 Press Release / Form 8-K Exhibit 99 — https://www.sec.gov/Archives/edgar/data/2041610/000204161025000042/ex99_q325.htm
- Paramount Skydance Q3 2025 earnings call — prepared remarks and Q&A transcript
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