Paramount Skydance (PSKY) has reported its third-quarter revenue, which, while falling slightly below Wall Street’s expectations, has prompted a positive outlook for the company’s future. The revenue for the quarter ending in September totaled $6.7 billion, just short of the anticipated $7 billion. This marks PSKY’s first earnings release since its merger with Skydance, finalized in August.
CEO David Ellison expressed optimism about the company’s trajectory, projecting total revenue to reach $30 billion and adjusted operating income before depreciation and amortization (OIBDA) to hit $3.5 billion by 2026. This growth is expected to be propelled by a robust acceleration in streaming services. The company anticipates that Paramount+ will achieve profitability within this year and continue to enhance that profitability by 2026.
Sales from direct-to-consumer platforms saw a notable 17% year-over-year increase, although gains were tempered by some weakness in the TV Media segment. Revenue from Paramount+ surged by 24%, bringing total subscribers to 79.1 million. For the entire quarter, Paramount reported $324 million in operating income, alongside a net loss of approximately $257 million, highlighting the challenges of pre- and post-merger financial comparisons.
David Ellison indicated that the newly merged entity has made significant strides in streamlining operations, including a workforce reduction of 1,000 employees, with plans to cut an additional 1,600 positions. In light of these efforts, the company has increased its efficiency savings target from $2 billion to $3 billion.
In a bid to further enhance profitability and support investments in new content and technology, Paramount Skydance also plans to increase prices for its Paramount+ subscription service early next year in the U.S., following similar moves announced for Canada and Australia. This strategy aligns with the broader goal of boosting financial performance in a competitive streaming landscape.
Shares of PSKY rallied by 6% in after-hours trading shortly after the financial results were released, signaling investor confidence in the company’s upward prospects despite the current financial dip.
