Paramount Global reported its last set of financials under Redstone family ownership with a massive jump in theatrical revenue (up 84%) from Mission: Impossible – The Final Reckoning last quarter. Released May 23, it’s grossed nearly $600 million worldwide.
Crime drama MobLand on Paramount+, and CBS Sports were other bright spots in three months that beat forecasts on some but not all metrics. In a shoutout to Jon Stewart amid some angst among the late night crowd, the company noted that The Daily Show “ranked as the #1 Late Night program on Mondays across all TV.”
TV media revenue fell 6% and affiliate revenue fell 7% reflecting an ongoing erosion in linear.
Total company revenue nosed up 1% to $6.85 billion as DTC growth outpaced linear and generated $114 million in free cash flow. DTC profits saw a $131 million year-over-year swing to $157 million. The company swung to a $57 million profit from a $5.4 billion loss in the year-earlier quarter when it took a massive impairment charge on its cable networks.
Strong subscription revenue growth at Paramount+ helped accelerate affiliate and subscription revenue growth across the company to 5%.
The streamer ended the quarter with 77.7 million subscribers, a dip of 1.3 million that mostly reflected the expiration of an international hard bundle deal.
All in, however, investors have been more focused on Paramount’s merger with Skydance than quarterly numbers. The $8.4-billion deal was approved by the FCC last week and has a planned August 7 closing date. The expanded company will start trading on the Nasdaq shortly after that under the stock symbol PSKY.
“Over many years, Paramount established itself as an enduring industry leader in media, news, and entertainment,” said non-executive chair and controlling shareholder (for another few days) Shari Redstone.
“Despite an increasingly challenging environment, the talented co-CEOs and teams across the company have continued to strengthen and grow the business. As a testament to their success and driven by the power of exceptional content, we have seen the impressive growth of Paramount+, the ongoing leadership of CBS, and the continued stream of franchise growth at Paramount Pictures. At the same time, substantial progress has been made in streamlining the company’s cost structure. I am proud that when the Skydance transactions close we will be turning over a healthy business with a strong foundation for long-term growth and value creation,” she said in a statement.
“I will be forever grateful to the people of the company and the shareholders who have supported us.”
Co-CEOs George Cheeks, Chris McCarthy and Brian Robbins said: “Our goal when we became co-CEOs was to transform Paramount into a streaming first company and today we are substantially better positioned with streaming revenue growth outpacing linear declines, driven by exceptional performance at Paramount+. We saw the largest viewership growth among all subscription services in the US, up 26% vs. the first half of 2024, driven by continued strong content at Paramount+ where we again had the most Top 10 SVOD Originals, behind only the market leader, and churn achieved a record low. CBS content drove nearly half of all viewing on Paramount+ and ranked as the most watched broadcast network for the 17th consecutive season. These impressive results are thanks to our talented teams and creative partners for whom we are very grateful for their continued creativity, dedication and hard work.”
Today at 5 ET is the deadline for Paramount stockholders to trade in their shares for a combination of cash and/or stock in what’s being called New Paramount. Shareholders who don’t make an election by then will automatically receive stock in the new entity.
The value on Paramount Class B shares as per the merger agreement is $15. The shares have never traded that high with analysts mostly neutral on the stock ahead of guidance from future management led by David Ellison and Jeff Shell around strategy and staffing.
McCarthy and interim CFO Andrew Warren will lead a pared down call with analysts at 4:30 ET.
McCarthy will be exiting as Paramount and Skydance merge. His co-CEO Brian Robbins is expected to leave. George Cheeks will remain with the new company. The three have been running Paramount as co-CEOs since April.
