Paramount reports third quarter earnings with streaming growth targets

Paramount Skydance Corporation reported third quarter 2025 financial results on November 10, 2025, outlining transformation plans targeting at least $3 billion in efficiency improvements and $30 billion in revenue for 2026.

The media and entertainment company completed its merger with Skydance Media on August 7, 2025, marking the first earnings report since the transaction closed. Chairman and CEO David Ellison emphasized the company's commitment to scaling its direct-to-consumer business, investing in creative content, and driving enterprise-wide efficiency.

Paramount+ added 1.4 million subscribers during the quarter, reaching 79 million total subscribers. The streaming service generated $1.77 billion in revenue for the quarter, representing 23% growth compared to the previous year. Direct-to-consumer revenue increased 17% year-over-year on a pro forma basis, driven primarily by subscription growth and average revenue per user expansion.

The company increased its run-rate efficiency target from $2 billion to at least $3 billion, with more than $1.4 billion in run-rate savings executed between the deal announcement and the end of 2025. An additional $1 billion in run-rate actions are planned for 2026, with the transformation program expected to complete by the end of 2027.

Achieving these efficiencies requires targeted one-time investments estimated at approximately $800 million in 2026 and between $400 million and $500 million in 2027. The company implemented workforce reductions affecting approximately 1,000 employees in October 2025, with approximately one-quarter of senior vice presidents and above impacted by the reduction.

Paramount announced incremental programming investments in excess of $1.5 billion for 2026 across theatrical and direct-to-consumer platforms. These investments include the company's seven-year exclusive media rights deal with UFC, agreement with Zuffa Boxing, five-year exclusive deal with South Park creators Matt Stone and Trey Parker, and four-year exclusive partnership with the Duffer Brothers.

The UFC partnership positions Paramount+ as the home for combat sports in the United States, Latin America, and Australia. The deal removes the secondary pay-per-view paywall that historically limited UFC access, making premium events available to all Paramount+ subscribers at no additional cost.

Ellison stated during the earnings call that the cost of an annual Paramount+ subscription equals less than one UFC pay-per-view event under the previous distribution model. The UFC has over 100 million fans in the United States alone, with audience growth of 25% since 2019.

TV Media revenue declined 12% year-over-year on a pro forma basis, driven by advertising declines of 12% including an eight percentage point headwind from political spending comparisons and affiliate revenue decline of 7% due to pay TV subscriber volume decreases. Licensing and other revenue fell 22% year-over-year due to content delivery timing.

Filmed Entertainment pro forma revenue increased 30% year-over-year, primarily due to consolidation of Skydance licensing and other revenue following the merger. The company plans to grow theatrical output to at least 15 films per year beginning in 2026, compared to approximately eight films annually before the acquisition.

CBS delivered its best October in a decade for NFL coverage, averaging more than 19 million viewers according to Nielsen. The November 2 matchup between the Kansas City Chiefs and Buffalo Bills drew 31 million viewers, earning Paramount+ its most-streamed game of the 2025 season and the third most-streamed regular season game in the platform's history.

Paramount partnered with IPG and Publicis across ad sales and media buying to accelerate digital advertising growth. The partnerships include significant revenue commitments over three years, with most advertising expected in digital areas where the company needs growth. Jay Askinasi joined as head of the advertising business from Roku, where he previously served as Head of Digital for Publicis.

The company divested Televisión Federal in Argentina and is in the process of divesting Chilevision in Chile, expected to complete in the first quarter of 2026. These divestitures, identified as non-core to future growth, will streamline operations and reduce the workforce by approximately 1,600 employees.

For the fourth quarter 2025, Paramount expects total revenue of $8.1 billion to $8.3 billion, representing 1% to 4% growth year-over-year, with adjusted OIBDA of $500 million to $600 million. The company anticipates transformation costs of several hundred million in the fourth quarter and expects to recognize a restructuring charge of approximately $500 million.

The streaming advertising landscape continues to shift as platforms optimize programmatic access and measurement capabilities. Paramount previously integrated Amazon Publisher Direct into its EyeQ advertising platform and adopted Unified ID 2.0 for privacy-conscious targeting.

The company announced price increases for Paramount+ in the United States early in the first quarter of 2026, with recent price adjustments in Canada and Australia. President Jeff Shell emphasized during the earnings call that broadcast and cable represent distinct businesses, with CBS continuing to perform well while cable faces accelerating declines.

Paramount ended the quarter with $3.3 billion in cash and cash equivalents and $13.6 billion in gross debt. The company expects to achieve investment-grade debt metrics by the end of 2027 as it makes progress against the transformation plan.

Starting with first quarter 2026 results, Paramount intends to re-segment financials to reflect business reorganization across DTC, TV Media, and Studios. This change will house all production and intellectual property in Studios, including almost all licensing revenue, while the remaining TV Media segment will comprise broadcasting and cable businesses.

Operating income totaled $244 million (5.9% margin) for the post-close period from August 7 through September 30, 2025, compared to $80 million (3.1% margin) for the pre-close period from July 1 through August 6, 2025. Adjusted OIBDA reached $655 million (15.9% margin) and $297 million (11.5% margin) for the same periods, respectively.

Timeline

• August 7, 2025: Paramount Global and Skydance Media complete merger, forming Paramount Skydance Corporation
• October 2025: Company implements workforce reduction affecting approximately 1,000 employees
• October 22, 2025: Paramount and Taboola launch Performance Multiplier for small business CTV advertising
• November 5, 2025: Fubo Channel Store launches with Paramount+ with Showtime standalone plans
• November 10, 2025: Paramount reports third quarter 2025 earnings results
• January 2026: Expected Q1 price increases for Paramount+ in United States
• Q1 2026: Expected completion of Chilevision divestiture in Chile
• 2026: Theatrical output to reach at least 15 films annually
• End of 2027: Target completion of transformation program and achievement of investment-grade debt metrics

Summary

Who: Paramount Skydance Corporation under Chairman and CEO David Ellison and President Jeff Shell reported financial results following the August 2025 merger between Paramount Global and Skydance Media.

What: The company reported third quarter 2025 earnings with 79 million Paramount+ subscribers, increased efficiency targets to $3 billion, and announced $30 billion revenue forecast for 2026 alongside major content partnerships including UFC and restructuring initiatives.

When: Financial results were announced November 10, 2025, covering the third quarter ended September 30, 2025, with the merger having closed on August 7, 2025.

Where: The transformation affects operations globally, with particular focus on United States streaming growth, divestitures in Argentina and Chile, and expanded UFC rights covering United States, Latin America, and Australia.

Why: The company aims to scale its direct-to-consumer business to compete in the streaming market, drive operational efficiency through consolidation, and position itself for sustainable long-term growth through strategic content investments and technology improvements.