Paramount Swings to $73 Million Profit in Q3, Driven by Streaming, Studios Growth

Paramount reported $7 billion in revenue and a profit of 6 cents per share, compared to $7.04 billion in revenue and a profit of 20 cents per share expected by Wall Street analysts. Paramount+, HBO and HBO Max reach reach 203 million aggregate subscribers worldwide. Starting in the fourth quarter, it will stop disclosing subscribers on a quarterly basis. HBO Max and Paramount+ will launch a bundle in early 2027 and will be merged onto the same backend within the first year of the merger’s closing In its first quarter since closing the $110 billion Warner Bros. Discovery merger, Paramount swung to a profit of $73 million, or 6 cents per share, with revenue climbing 5% to $7 billion. The results were driven by growth in its streaming and studios businesses, offset by continued declines in the linear TV business. Paramount+ revenue grew 21% to $2.13 billion, marking its fastest quarterly growth in 2026, as the serviced added 600,000 subscribers for a total of 82.2 million. When combined with HBO and HBO Max, the three streaming platforms reach 203 million aggregate subscribers worldwide. Meanwhile, Pluto TV has as approximately 75 million monthly active users. Overall, the DTC business posted a profit of $225 million and saw revenue grow 11% to $2.5 billion as it recognized higher costs from planned investment in its programming schedule in the quarter, including the UFC and ongoing investment in original programming. Studios revenue grew 23% to $1.5 billion and a profit of $129 million, reflecting a strong quarter for secondary market licensing and content produced for third parties. In the third quarter, the studios business released David Ayer’s “Heart of the Beast” starring Brad Pitt, which grossed over $180 million globally, and “PAW Patrol: The Dino Movie,” which grossed more than $160 million worldwide and drove revenue across multiple lines of business, including consumer products. Paramount Pictures is expected to double its output in 2026 with 15 releases. Titles through the end of 2026 include “The Cat in the Hat,” “Ebenezer” starring Johnny Depp, “Focker-in-Law,” “Dune: Part Three,” “The Angry Birds Movie 3,” and “Mr. Irrelevant” starring David Corenswet and Isabel May. The TV Media posted a $1 billion profit as it benefitted from cost saving initiatives. But revenue fell 7% to $3 billion, driven by an 8% drop in ad revenue and 5% decline in affiliate revenue. The declines were driven by cord-cutting and the absence of Telefe and Chilevision, which were sold in October 2025, offset by higher political ad revenue. The latest quarterly results come as the David Ellison-led media giant is looking to find at least $6 billion in merger-related cost savings as it looks to service nearly $80 billion in net debt. Those savings will come from areas including real estate, marketing, technology, procurement and an unspecified number of layoffs. Skydance has offered some employees voluntary buyouts ahead of the formal layoff announcement and is shifting to a mandatory in-office policy of five days per week. At least 25 people have been impacted by a reorganization in the Skydance Games division. By 2030, Skydance expects mid-single-digit annualized revenuegrowth, mid-20% adjusted EBITDA margins and more than $10 billion in free cash flow by 2030. It also expects to transition the majority of its revenue and profit from the declining linear TV business to the streaming and studios businesses. Additionally, plans to invest more than $30 billion in content annually and lower its leverage ratio — a measure of a company’s debt relative to its earnings — to 3x in 2029. Looking ahead, Paramount remains on track for the high end of its 2026 profitability forecast at $3.9 billion. In the fourth quarter, the company expects continued revenue growth in DTC. It also it expects fourth quarter trends in its TV unit to remain consistent with recent quarters and for improved Paramount film slate results to be offset by the underperformance of the Warner Bros. film slate. “As we integrate the businesses, we are applying the playbook we ran at Paramount: testing earlier, tailoring our marketing and release strategy to the size of each opportunity, enhanced with real-time market data,and strengthening the slate we greenlight,” the company said. “That approach served us well at Paramount where our 2026 slate is expected to generate more than $500 million more in lifetime profit than lastyear’s.” In early 2027, Skydance will launch an HBO Max-Paramount+ bundle and expects to bring the two services on the same backend systems within a year of closing. It is also on track to release over 30 theatrical films and produce more than 180 television and streaming series. Its 2027 film slate includes “Children of Blood and Bone,” “K-Pop: The Debut,” “Sonic the Hedgehog 4,” “A Quiet Place Part III,” “Godzilla x Kong: Supernova,” “Man of Tomorrow” and “A Minecraft Movie Squared,” the “Ocean’s Eleven” prequel starring Bradley Cooper and Margot Robbie” and “The Lord of the Rings: The Hunt for Gollum.” More to come…