Shares of Paramount Skydance (PSKY) surged approximately 5% in premarket trading on Tuesday as investors reacted to the company’s third-quarter earnings report, released after the market closed on Monday. Despite reporting quarterly revenue that fell short of Wall Street’s expectations, the company maintained an optimistic outlook for the future, raising its cost-savings target and projecting increased streaming profits. Additionally, plans for price hikes for its streaming service, Paramount+, were disclosed.
For the quarter ending in September, Paramount Skydance recorded revenue of $6.7 billion, slightly below analysts’ estimates of $7 billion. This earnings report marked the company’s first since its merger with Skydance was finalized in August. CEO David Ellison expressed confidence in the company’s growth trajectory, forecasting total revenue of $30 billion and adjusted OIBDA of $3.5 billion by 2026, attributed to a “healthy acceleration” in streaming.
The direct-to-consumer segment showed promising growth, with revenues soaring 17% year over year, despite some challenges in the TV Media sector. Paramount+ demonstrated robust performance, with revenue increasing by 24% and total subscribers reaching 79.1 million. Throughout the quarter, the company reported $324 million in operating income and a net loss of approximately $257 million, though such figures are not directly comparable across pre- and post-merger periods.
Ellison noted that the newly consolidated company has implemented significant operational streamlining, including a reduction of 1,000 employees, with plans to cut an additional 1,600 positions to optimize efficiency. In line with these transformations, Paramount also revised its efficiency savings target upwards to $3 billion from a previous goal of $2 billion.
To further bolster profitability and fund future content and technology investments, the company plans to adjust pricing for Paramount+ early next year in the U.S., along with announced price increases for Canadian and Australian markets.
