Paramount Skydance missed revenue estimates last quarter in its first earnings report as a merged company, but said it will increase its investment in streaming, film, and television.
Revenue was US$6.70 billion, down year-over-year from $6.73 billion and below LSEG estimates of $6.97 billion. It posted a net loss of $257 million, compared with net earnings of $1 million one year ago.
“In the first 100 days, we have taken significant steps to align our business around our North Star priorities: 1) investing in our growth businesses anchored by our creative engines and exceptional storytelling; 2) scaling our direct-to-consumer business globally; and, 3) driving efficiency enterprise-wide with a focus on long-term free cash flow generation,” wrote Paramount Skydance CEO David Ellison in a letter to shareholders.
“True to our mission as a creative company, we are committed to increasing our creative output with more high-quality films, TV series, sports, news, and games to growing audiences worldwide.”
Direct-to-Consumer revenue was $2.17 billion, rising from $1.86 billion. Paramount+, the company’s streaming service, saw subscribers rise to 79.1 million, from 71.9 million one year ago, and represented $1.77 billion of the segment’s revenue.
TV Media revenue dropped to $3.80 billion from $4.30 billion, which the company credited to decreases in advertising, affiliate revenue, and licensing revenue. Filmed Entertainment revenue increased to $756 million from $590 million.
Operating income was $80 million before the merger closed in August, and $244 million for the remainder of the quarter. Its operating income in 2024’s third quarter was $337 million.
Paramount Skydance projects full-year revenue will be $30 billion, and expects $3 billion in savings from the merger. It predicts revenue in the fourth quarter will be $8.1-8.3 billion, above estimates of $8 billion.
The company plans to increase its film and television output, it said, and release at least 15 films each year from 2026. It combined its TV media networks under a single leadership team during the quarter.
According to Ellison, Paramount Skydance expects to cut around 1,600 employees during its ongoing strategic review, which has included divesting from international assets. The company previously laid off about 1,000 workers in October.
Paramount Skydance has also made an offer to purchase Warner Bros. Discovery for $23.50 per share, CNBC reported. Warner Bros. Discovery has said it plans to split into two companies, but will likely announce in December that it is open to a sale.
Paramount Skydance’s (NASDAQ: PSKY) share price climbed to $15.95 in after-hours trading, following a close at $15.25. Its market capitalisation is $16.72 billion.
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