Paramount Skydance Corporation reported first‑quarter 2026 results that exceeded expectations, with revenue of $7.35 billion—up 2% year‑over‑year—and an adjusted earnings per share of $0.23, beating the consensus estimate of $0.15 by $0.08 or 53.3%. The company reaffirmed its full‑year 2026 guidance of $30 billion in revenue and $3.8 billion in adjusted EBITDA, underscoring confidence in its streaming and studio growth plans.
Direct‑to‑consumer (DTC) revenue rose 11% to $2.4 billion, driven by a 17% increase in Paramount+ subscription revenue. The lift was largely due to a 14% rise in average revenue per user from price hikes and subscriber growth. Net subscriber additions were 700,000, but this figure masks the exit of over 1 million international hard‑bundle subscribers, leaving an underlying gain of nearly 2 million. DTC adjusted EBITDA swung to a profit of $251 million—10% margin—after a loss in the prior year, reflecting disciplined cost control and a favorable mix shift.
The studio segment grew 11% to $1.28 billion, buoyed by the box‑office success of "Scream 7," the franchise’s highest‑grossing film. Studio profitability improved as higher‑margin content offset the cost of new releases, contributing to the company’s overall EBITDA expansion.
Overall adjusted EBITDA climbed 59% to $1.16 billion, a 15.8% margin, up from $0.73 billion and 12.5% margin in Q1 2025. The jump reflects both the DTC turnaround and tighter operating leverage across the business. Management noted that expenses were lighter than planned due to slower hiring and content timing shifts, while cautioning that margin pressure could emerge later in the year as the content slate phases out.
Management reiterated confidence in the WBD acquisition, which is expected to close by the end of the third quarter of 2026 after shareholder approval on April 23. CEO David Ellison said, "We are executing deliberately against our priorities and seeing tangible results, attracting top creative talent, nearly doubling our film slate, delivering shows audiences love and greenlighting dozens of new and returning series while achieving our financial goals." CFO Dennis Cinelli added that the company’s cost discipline has helped maintain profitability, though he warned of potential margin pressure in the latter half of the year due to content slate phasing.
Investors reacted cautiously, citing the company’s lower‑than‑expected Q2 revenue guidance, the substantial debt load associated with the WBD deal, and ongoing regulatory scrutiny. The mixed reaction highlights the balance between the company’s strong Q1 performance and the uncertainties surrounding its future growth and integration plans.
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