Paramount‘s third-quarter revenue fell shy of Wall Street analysts’ consensus forecast, but the company issued rosy 2026 projections and upped its target for cost savings from the Skydance merger.
Revenue for the period from July to September totaled $6.7 billion, flat on a pro forma basis, while analysts were expecting $7 billion. The current management team and corporate iteration of Paramount dates only to August 7, which is when the Skydance merger closed.
The company issued guidance for 2026 revenue and operating income before depreciation and amortization, or OIBDA. It projects total revenue of $30 billion, driven by a “healthy acceleration” of streaming revenue as well as “global profitability,” CEO David Ellison wrote in a letter to shareholders, with OIBDA hitting $3.5 billion on an adjusted basis.
Cost savings from the Skydance merger, initially pegged at $2 billion, will now reach $3 billion, the company said. Paramount is currently downsizing, laying off about 2,000 workers (roughly 10% of its global workforce), a key part of reaching the cost-savings goal.
Advertising revenue continued its long-term decline in the quarter, slipping 12% to $1.465 billion, one of the main causes of overall net losses of $257 million.
The earnings report is the first by the company following the August close of the merger of Paramount and Skydance after a long and torturous regulatory process. Ellison and other senior executives were scheduled to speak to Wall Street analysts on a conference call shortly after the release of the numbers.
Investors cheered the earnings results, sending shares up 3% in after-hours trading, ending weeks of sluggishness as the stock pulled well back from its high north of $20. They finished the regular trading day at $15.25, up 1%.
“Nearly 100 days have passed since we launched the new Paramount, and we are pleased with the progress to date,” Ellison wrote in the letter. “Our goal in bringing together Paramount and Skydance was to honor a company with over a century of storied history and profound cultural impact, while transforming it for the future through investments in exceptional storytelling, innovative technology, and strategic growth opportunities that will shape the next era of entertainment. Today, we are confident we are on the right path – taking the necessary steps to build a stronger, more enduring company for the future.”
The letter reflected Ellison’s vision of blending technology and entertainment, down to the terminology it deployed. It laid out “four enterprise-wide workstreams focused on unlocking Paramount’s full potential.” They are: “making technology a core competency”; “enhancing industrial efficiency and scalability across our operations’; “unifying the organization under clear, cohesive leadership”; and “optimizing our workforce for the future.”
There will be no shortage of topics to discuss on the call. At the same time it is trimming its workforce, the company has also maintained a steady pace of dealmaking. It has flashed significant cash, making statements about the resources of Ellison, his father, Oracle co-founder Larry Ellison, and private equity backer RedBird Capital. Major buys have included $7.7 billion for UFC rights and a reported $150 million to acquire Bari Weiss’s The Free Press. The latter deal also involved Weiss, a former newspaper op-ed columnist with no broadcast TV experience, taking on the role of editor in chief of CBS News.
Paramount also made headlines on the talent front, luring the Duffer Brothers from Netflix but then allowing Yellowstone creator Taylor Sheridan to decamp for a deal with NBCUniversal.
Bigger than any of those agreements, however, is Ellison’s main prize: Warner Bros. Discovery. Paramount has made three offers to acquire the company, which is expected to command in the range of $60 billion, though WBD is also fielding interest in its studios-and-streaming division. It could also proceed with a plan to formally split into two separate companies.
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