tapebrief
PSKY · Q3 2025
PSKY · Q1 2026

PSKY · Q4 2025 Earnings

Cautious

Paramount Skydance Corporation

Reported February 25, 2026

30-second summary

Paramount Skydance closed 2025 with Q4 revenue of $8.15B (+2% YoY, at the low end of the $8.1–8.3B guide) and adj. OIBDA of $612M (above the $500–600M guide). The forward signal is more measured than the headline suggests: FY26 revenue held at $30B, and the profit anchor restated from $3.5B adj. OIBDA to $3.8B adj. EBITDA — a measure change that excludes ~$300M of stock-based comp, so the underlying profitability outlook is essentially reaffirmed, not raised. Q1'26 revenue is guided to $7.15–7.35B (-1% to +2% YoY), implying the FY26 revenue ramp is back-half weighted and the DTC acceleration thesis still has to prove itself in the print. Management also added a new milestone on the cost-out path: more than $2.5B of run-rate efficiencies expected by the end of 2026, en route to the $3B+ through 2027 target. Separately, management disclosed a revised $31/share all-cash bid for Warner Bros. Discovery, with WBD's board determining it could reasonably lead to a "Company Superior Proposal"; management declined further Q&A commentary on the topic.

Headline numbers

EPS

Q4 FY2025

$-0.12

Revenue

Q4 FY2025

$8.15B

+2.0% YoY

Free cash flow

Q4 FY2025

$0.10B

Operating margin

Q4 FY2025

-4.2%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$8.15B+2.0%$6.73B+21.1%
EPS$-0.12—$-0.01-1100.0%
Operating margin-4.2%—5.0%-920bps
Free cash flow$0.10B—$0.01B+573.3%

Guidance

Paramount raised FY2026 Adj. EBITDA guidance by $300M to $3.8B (12.7% margin) while reaffirming revenue at $30B; beat Q4 FY2025 Adj. OIBDA by $12M and met revenue expectations, signaling margin expansion and successful cost discipline execution.

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

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ4 FY2025$8.1 billion to $8.3 billion$8.148 billionin-line (at the lower end of the range)Beat
Adjusted OIBDAQ4 FY2025$500 million to $600 million$612 million+$12M above guide highBeat

New guidance

MetricPeriodGuideYoY
RevenueQ1 FY2026$7.15 billion to $7.35 billion-1% to 2% YoY
Adj. EBITDAQ1 FY2026$900 million to $1 billion—
Adj. EBITDA MarginQ1 FY202613.1%—

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Adj. EBITDA
FY2026
$3.5 billion$3.8 billion+$300M (+8.6%)Raised

Reaffirmed unchanged this quarter: Revenue ($30 billion)

Segment performance

Q4 FY2025
SegmentQ4 FY2025YoY
Direct-to-Consumer$2.213B+10.0%
TV Media$4.714B-5.0%
Filmed Entertainment$1.256B+16.0%
Paramount+ Revenue$1.837B+17.0%

Platform metrics

Q4 FY2025
SegmentQ4 FY2025
Paramount+ Paid Subscribers79 million
Paramount+ ARPU Growth10% YoY
Expected 2026 Total Revenue$30 billion
Transformation Efficiencies Target$3 billion through 2027

Profitability

Q4 FY2025
SegmentQ4 FY2025
DTC Adj. OIBDA Margin-7%
TV Media Adj. OIBDA Margin23%
Total Company Adj. OIBDA$612 million
Expected 2026 Adj. EBITDA$3.8 billion

Management tone

Narrative arc: First post-merger print → Margin discipline plus an active M&A overlay.

The Q3 print introduced the post-merger story with a content-offense framing (UFC paywall-free, $1.5B incremental content, slate scaling 8→16 films) and a $3B efficiency target as the cost-out counterweight. Q4 keeps the same operating posture but layers in three new disclosures: the restatement of the FY26 profit anchor from adj. OIBDA to adj. EBITDA (with the $300M delta approximating the SBC add-back, so reaffirmation rather than a real raise); a new interim quantification on the cost path — ">$2.5B run-rate efficiencies by end-2026" en route to the $3B+ through 2027 target; and the revised $31/share all-cash bid for Warner Bros. Discovery, which WBD's board determined could reasonably lead to a "Company Superior Proposal." Management declined further Q&A on WBD but framed it as an "accelerant" to the standalone plan, not a substitute for it.

The DTC narrative has tightened from aspiration to specificity. Q3 framed DTC as "profitable in 2025 with growth in 2026"; Q4 calls DTC the "primary driver" of FY26 growth with "healthy, accelerating underlying subscriber growth year-over-year" — a more measurable, falsifiable commitment. The Q4 print supports this: +1M QoQ Paramount+ net adds, ARPU +10%, and revenue +17% — even with a -7% DTC adj. OIBDA margin from seasonal content costs. Management explicitly flagged that planned hard-bundle exits (~4–5M subs, <2% of 2025 Paramount+ revenue) will mute reported sub growth in 2026 while underlying organic adds accelerate.

Combined with the FY26 revenue reaffirmation at $30B and the OIBDA-to-EBITDA restatement, the standalone posture reads as "deliver the operating plan as set; let the WBD process play out separately."

Q&A highlights

Peter Cepino · Wolf Research

Comment on initial experience with UFC on Paramount+ and viability of 'something for everyone every day' streaming strategy given competitive landscape.

UFC 324 reached 7 million households across US and Latin America, largest exclusive live event on platform, with strong advertising demand and good engagement with broader content. 11 original series greenlit in past 6 months, Paramount+ grew 17% year-to-date. Management experimenting with partial CBS placement for March 7th fight. Ad revenue performing better than expected, focus now on driving engagement and monetization.

UFC 324 reached 7 million householdsLargest exclusive live event in Paramount+ historyParamount+ grew 17% year-to-date11 original series greenlit in past 6 months

John Hodlick · UBS

Follow-up on D2C profitability guidance with slightly higher subs; ask about ARPU trends, hard bundle exits, price increases, cost dynamics, and overall company guidance.

DTC expected to accelerate growth in 2026 vs 2025. Subscriber growth will accelerate with better ARPU from mix shift and Q1 price increases. Exiting uneconomic hard bundles representing less than 2% of 2025 revenue. DTC ad revenue expected to grow meaningfully. DTC profitability improving year-over-year. Overall 2026 revenue guidance $30 billion (up 4% YoY), adjusted EBITDA $3.8B. $3B+ synergies expected. TV media revenue declining but profitability stable. Studio profitability improving despite theatrical decline.

$30 billion revenue guidance (up 4% YoY)Adjusted EBITDA guidance $3.8B$3B+ synergies expected to realizeUneconomic hard bundles < 2% of 2025 DTC revenue

Stephen Carhall · Wells Fargo

Ask about NFL conversations and potential for nationwide Paramount+ availability of games currently geofenced; also ask about free cash flow path to investment grade commitment.

Regular conversations with NFL; past year was most watched year ever for CBS with 4:25pm window nationally achieving highest viewership. Games will remain regionalized across CBS and Fox stations to maximize reach and market viewership. Geofencing will continue for strategic reasons. On investment grade: committed to investment grade metrics by 2027. 5% free cash flow conversion in 2025 after accounting for $300M debt paydown and $800M restructuring charges. Expect to return to industry norms and exceed in 2027.

Past year was most watched NFL year ever for CBS425 window nationally largest watched window28 owned and operated stations plus affiliates for regionalizationInvestment grade target: 2027

Robert Fishman · Moffitt Nathanson

How critical are core franchises and IP reinvigoration to long-term value creation; how would Warner Brothers and HBO IP accelerate growth; discuss content spending strategy standalone or combined.

Will not comment on Warner Brothers transaction per opening remarks. Focused on reinvigorating core franchises through investment. Scaling from 8 to 16 movie releases in 2026 versus inherited slate. Greenlit 11 original series in first 6 months. Invested in UFC and sports. Increased content spend by $1.5 billion targeting film slate scaling, original series, and sports. Franchise strategy includes Call of Duty, A Quiet Place, Sonic, Scream. Linear business anchored by CBS with 8 of top 10 broadcast shows.

Scaling from 8 to 16 movie releases in 2026Greenlit 11 original series in first 6 months$1.5 billion increase in annual content spendFilms planned: A Quiet Place, Sonic, Call of Duty, Scream

Rick Prentice · Raymond James

Request concrete examples of IP leverage across ecosystem (film, TV, streaming, live, publishing, consumer products); benchmark monetization vs peers.

Teenage Mutant Ninja Turtles example: two films, series, consumer products partnership created 'most significant' consumer product partnership in company history with 5X the historical value. Paramount One initiative launched as integrated marketing platform, activated for UFC 324 reaching billions of impressions. UFC activation drove largest live event launch in Paramount+ history. Integrating business to operate as one company, breaking down silos with promising early results in six months.

TMNT consumer products partnership 5X historical company valueParamount One marketing platform launchedUFC activation delivered billions of impressionsUFC 324 largest live event launch in Paramount+ history

Answers to last quarter's watch list

Q4'25 revenue lands within the $8.1B–$8.3B guide. Landed at $8.148B, in-guide at the low end with +2% YoY growth — within the +1% to +4% range guided. Status: Resolved positively
Paramount+ net adds trajectory. Paramount+ added ~1M paid subs QoQ to 79M, with ARPU +10% YoY and revenue +17% YoY. Management's framing is that underlying organic growth is being partially obscured by the planned hard-bundle exit accounting (<2% of 2025 Paramount+ revenue), with acceleration expected into FY26. Status: Resolved positively on Q4 print; FY26 organic-adds language still to prove.
DTC adj. OIBDA trajectory. DTC adj. OIBDA margin landed at -7% in Q4, a sharp step-down from the +18% post-close Q3 number on seasonal content costs as guided. FY26 DTC explicitly called the "primary driver" of growth with profitability improving year-over-year. Status: Resolved negatively on the Q4 magnitude, with FY26 still to prove.
Filmed Entertainment slate recovery. Filmed Entertainment Q4 revenue was +16% YoY at $1.256B as reported, but management attributed this primarily to Skydance licensing consolidation, with theatrical actually declining significantly and segment adj. OIBDA at -$119M (-9% margin) — explicitly flagged as not meeting expectations. Management reiterated scaling from 8 to 16 releases in 2026 with explicit franchise pipeline (A Quiet Place, Sonic, Call of Duty, Scream), but core-franchise box office step-up isn't expected until 2027. Status: Resolved negatively on Q4 segment profitability; FY26 is the test of slate rebuild.
Platform convergence milestones. Not specifically called out in this print. Status: Continue monitoring
Free cash flow and de-leveraging path. Q4 FCF of $101M; 2026 FCF conversion guided to ~5% before ~$800M of transformation costs; $347M of debt repaid early Q1'26. Investment-grade target reaffirmed for 2027, with return to "industry norms and exceed" expected by then. Status: Continue monitoring

What to watch into next quarter

Q1'26 revenue lands within $7.15B–$7.35B with DTC carrying the growth. A miss at the low end (-1% YoY) is the bear case that the FY26 $30B reaffirm requires a steep back-half ramp; an upside print closer to +2% YoY validates the DTC acceleration language.

Q1'26 adj. EBITDA margin of 13.1% midpoint vs. Q1'25 predecessor adj. OIBDA margin of 9.6%. On a like-for-like basis, ~$75M of Q1 SBC accounts for roughly 1 point of the gap from the OIBDA→EBITDA measure change; the remainder is the real YoY operating improvement to validate. Watch whether the realized Q1 margin holds 13%+ on the new EBITDA basis and whether management revises the FY26 $3.8B at Q1.

Paramount+ underlying organic subscriber adds. Q4 delivered +1M QoQ net adds. Management guided "healthy, accelerating underlying subscriber growth year-over-year" for FY26 against a backdrop of planned hard-bundle exits — Q1'26 net adds, with management's own commentary that exits will result in "flattish QoQ subscribers," is the first test of how much underlying acceleration shows through.

DTC adj. OIBDA margin in Q1'26. Q4 hit -7%; management has committed to FY26 DTC profitability growing year-over-year. Watch the seasonal Q1 recovery off Q4's trough.

Warner Bros. Discovery process evolution. Management has disclosed the revised $31/share all-cash bid and WBD's board's "Company Superior Proposal" determination; further Q&A commentary was declined. Watch for next disclosure milestones — engagement updates, financing posture, and any reframing of the $3B+ efficiency / FY26 plan in light of a potential transaction.

$2.5B+ run-rate efficiencies by end-2026. This quarter added a specific interim milestone on the path to the $3B+ through-2027 target. Watch for incremental quantification in Q1'26 actuals — either confirmation of the run-rate trajectory or evidence of cost-timing slippage.

Sources

  1. Paramount Skydance Q4 2025 Press Release / Form 8-K Exhibit 99 — https://www.sec.gov/Archives/edgar/data/2041610/000204161026000008/ex99_q425.htm
  2. Paramount Skydance Q4 2025 earnings call Q&A (analyst exchanges)

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