Paramount Skydance (PSKY) announced first-quarter financial results that surpassed analyst expectations for both revenue and earnings. The media conglomerate reported nearly $7.35 billion in revenue for the period, marking a 2% increase compared to the same quarter in the previous year. This top-line growth was significantly propelled by the company's expanding streaming business.
The overall streaming segment, which encompasses Paramount+, BET+, and the ad-supported service Pluto, saw its revenue climb by 11% year-over-year, reaching $2.4 billion. Paramount+, the company's flagship direct-to-consumer offering, was a key driver of this performance. The platform added 700,000 new subscribers during the first quarter, contributing to a total subscriber base of nearly 80 million. This subscriber growth occurred even as the company implemented price increases for Paramount+ plans in January, the first such adjustment since August 2024.
Revenue from Paramount's film studio also demonstrated strength, increasing by 11% from the prior year to approximately $1.28 billion. The film "Scream 7" was highlighted as a significant contributor, becoming the highest-grossing installment in its horror franchise. Since the merger with David Ellison's Skydance nine months ago, the company has reportedly doubled its film slate for 2026 compared to 2025, indicating a strategic focus on theatrical releases.
Despite the positive momentum in streaming and film, Paramount's traditional TV media business experienced a revenue decline. This segment, which includes broadcast network CBS and cable channels such as Nickelodeon, MTV, and BET, reported $3.67 billion in revenue, down 6% from the first quarter of the previous year. The company attributed this downturn to the ongoing trend of cord-cutting, a challenge faced by many in the media industry.
In terms of profitability, Paramount Skydance reported first-quarter net earnings of $168 million, or 15 cents per share. This compares to net earnings of $152 million, or 22 cents per share, reported in the prior year under the predecessor company structure before the merger. On an adjusted basis, excluding one-time transaction-related items, the company posted adjusted earnings per share of 23 cents, exceeding the 15 cents per share anticipated by Wall Street analysts.
This reporting period marks the first quarter under a newly implemented organizational structure for Paramount Skydance. The company has undergone a reorganization that reallocates expenses across its direct-to-consumer streaming, studios, and TV media divisions. As part of this restructuring, Paramount has also restated its financial figures for previous periods to align with the new reporting framework.
Looking ahead, Paramount Skydance reaffirmed its full-year financial projections. The company continues to expect total revenue of $30 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $3.8 billion for the entirety of 2026. These targets reflect the company's confidence in its strategic direction following the significant merger.
The company's financial performance and outlook are being closely watched as it navigates the integration of Paramount and Skydance and progresses toward another major transaction: the proposed acquisition of Warner Bros. Discovery (WBD). Paramount Skydance expects this acquisition to close by the end of the third quarter of 2026. Shareholder approval for the WBD deal was secured in April, and the transaction is currently undergoing regulatory review. Paramount Skydance has committed to acquiring WBD for $31 per share in an all-cash deal and is actively arranging the necessary debt and equity financing from external investors.
As part of the integration following the Paramount and Skydance merger, the company had previously projected cost savings of $3 billion. On Monday, Paramount confirmed it remains on track to achieve these savings by 2027, with more than $2.5 billion expected to be realized by the end of 2026. A key initiative to achieve these efficiencies involves consolidating the technology stacks and platforms across its three streaming services by mid-year. Enhancing streaming technology infrastructure has been a central focus since David Ellison combined the companies.
Paramount Skydance's first-quarter results indicate a company actively managing a dynamic media landscape, leveraging growth in its digital platforms while addressing challenges in its traditional media segments. The progress on the potential Warner Bros. Discovery acquisition further underscores the company's ambitious strategy for future expansion and market positioning.
