Paramount Skydance posted mixed financial results for the second quarter, with modest top-line growth driven by streaming and studio businesses that helped offset a weaker showing in television. Consolidated revenue for the period rose 1% to $6.91 billion, surpassing the $6.88 billion estimate compiled by LSEG.
Net profit for the quarter was $41 million, or 4 cents per share, a result below analyst expectations of $109 million, or 9 cents a share. The gap between revenue performance and profit outcomes reflected varying dynamics across the company’s divisions.
The streaming segment generated nearly $2.5 billion in revenue, a 9% increase from the same quarter a year earlier. Paramount said that flagship programming and sporting rights - including the "Yellowstone" sequel "Dutton Ranch," events such as the UFC Freedom 250 cage-match, and the FIFA World Cup - contributed to Paramount+ adding 2 million net new subscribers in the quarter, bringing total subscribers to 81.6 million.
Paramount’s leadership highlighted efforts to consolidate its streaming technology. Chief Operating Officer Andy Gordon said the company has merged its streaming services onto a single technology platform, a move management said allows more effective promotion of content across its audience base.
For the quarter, the studio business reported $1.3 billion in revenue, supported by strong third-party sales to platforms like Netflix and Amazon Prime Video and improvements in content licensing. That upside was partly offset by a softer theatrical season, where the studio’s primary summer release was "Jackass: Best and Last," versus last year’s theatrical entry "Mission: Impossible - The Final Reckoning."
Conversely, the television segment, which encompasses broadcaster CBS and cable networks such as Comedy Central, saw sales decline 9% to $3.1 billion. Management pointed to ongoing softness in the TV unit as a principal headwind during the quarter.
Paramount also reported progress on ancillary commercial initiatives. Gordon noted advances in consumer products licensing, pointing to a multi-year deal with Mattel for the Teenage Mutant Ninja Turtles brand as an example of monetization beyond core advertising and subscription channels.
Company guidance for the quarter ending in September projects revenue between $6.95 billion and $7.15 billion, driven by anticipated gains in streaming and studio results. Profit before certain items is expected to be in a range of $875 million to $975 million, according to management’s outlook.
Amid these operating updates, the company reiterated the status of its proposed $110 billion acquisition of Warner Bros. Paramount said in its earnings statement that the lawsuit filed by California and 11 other states seeking to block the transaction "does not reflect the realities of today’s highly competitive entertainment marketplace." Chief Executive David Ellison said he still fully expects "the transaction to close."
Ellison also published an essay in the New York Times asserting that opposition to the merger is driven less by market concentration concerns than by questions of personal stewardship over Warner’s CNN. In that piece he pledged to keep CNN independent if the deal proceeds.
Paramount agreed to pause the transaction timetable until June 2027 at the latest while awaiting a ruling in the antitrust litigation. The company could be liable for as much as $1.7 billion in so-called ticking fees to Warner Bros. shareholders if the merger is delayed to that date. The agreement specifies a daily fee of $7 million if the deal does not close by September 30.
Summary
Paramount Skydance’s second-quarter report showed modest revenue growth and notable streaming momentum, but profit results missed analyst expectations. The media company continues to prepare for a major merger with Warner Bros. that faces legal challenges and potential financial penalties if delayed.
Key points
- Consolidated revenue increased 1% to $6.91 billion, beating estimates of $6.88 billion.
- Quarterly profit was $41 million, or 4 cents a share, below analyst expectations of $109 million or 9 cents a share.
- Streaming revenue reached nearly $2.5 billion, up 9% year-over-year, and Paramount+ added 2 million subscribers to reach 81.6 million.
Risks and uncertainties
- Regulatory and legal uncertainty around the proposed $110 billion Warner Bros. acquisition, including a lawsuit filed by California and 11 other states, could delay or alter the transaction - impacting the media and broader entertainment sectors.
- Continued weakness in television revenues, down 9% to $3.1 billion, could pressure ad-driven and linear-broadcast business models across broadcasters and cable networks.
- If the deal is delayed to June 2027, Paramount could face up to $1.7 billion in ticking fees, with an immediate $7 million per day potential cost if the merger does not close by September 30 - a financial exposure that affects shareholders and transaction economics.