Paramount Skydance posted a wider net loss of $573 million and grew revenue 2% to $8.15 billion in its fourth quarter even as the David Ellison-led media giant saw improvement in its streaming business offset by continued declines in the linear TV business.
But the company was relatively mum on what everyone wanted to talk about — its pursuit of Warner Bros. Discovery — and only offered a brief boilerplate comment and called the deal an “accelerant” for hitting its goals.
Paramount is banking on its streaming business to deliver the majority of its growth as it continues to manage the decline of its TV business and builds out its pipeline of theatrical releases.
So it was a good thing streaming was a bright spot this period with a narrowed loss of $158 million as Paramount+ grew revenue 17% and hit 79 million total subscribers. The studio business also saw revenue increase 16% during the quarter, but posted a widened net loss of $119 million on lower theatrical revenue. Paramount executives said the studio business is in a “rebuild phase,” with more than 15 films slated for theatrical release in 2026, up from 8 releases in 2025. But it also warned theatrical revenue would be down year over year.
Meanwhile, the TV/media unit posted a 5% revenue decline as cord-cutting continues to weigh on the pay TV business, but saw profits climb 15% as the company continued to prioritize cost-cutting. Paramount is targeting at least $3 billion in savings through 2027 with over $2.5 billion in efficiencies expected through the end of 2026.
Here are the quarter’s results:
Net loss: A loss of $573 million, compared to a loss of $224 million a year ago.
Earnings per share: a loss of 52 cents per diluted share, compared to a loss of 2 cents per share expected by analysts surveyed by Zacks Investment Research.
Revenue: $8.15 billion, compared to $8.17 billion expected by analyst surveyed by Zacks.
Streaming subscribers: Added 1 million subscribers for a total of 78.9 million. The company’s total subscriber count no longer includes free trialers, who totaled 1.2 million as of the end of the third quarter.
Operating loss: A loss of $339 million, compared to a profit of $129 million a year ago. The figure included $546 million in restructuring and transaction-related costs.
“It’s been a productive six-plus months since the launch of the new Paramount, and we are pleased with the progress made in a relatively short time,” CEO David Ellison told analysts on Wednesday. “Our North Star priorities continue to guide everything we do, and we’re confident we are on the right trajectory and are excited about the opportunities ahead.”
The company also reaffirmed guidance of $3.8 billion in adjusted EBITDA and $30 billion in revenue for full year 2026.
Paramount+ a bright spot
The streaming division saw total revenue climb 10% to $2.2 billion and losses narrowing to $158 million from $286 million a year ago. Paramount+ revenue grew 17% to $1.84 billion as the streaming service reached 79 million subscribers, while the remainder of the streaming segment saw a 16% decline in revenue, primarily driven by Pluto TV.
Ellison told analysts on Wednesday that he’s bullish on the future of free ad-supported streaming, which will only grow in importance. He added that the company would eventually expand its headcount of engineering talent by 10 times as part of its plan to transform the Hollywood studio into an entertainment-tech hybrid.
“We are seeing engagement grow [on Pluto],” Ellison noted. “The headwind we’re facing is really monetization, and we’re doing several things to correct that. And while Pluto has always been a leader in the FAST space — it’s a profitable platform — but it was from our perspective under-invested in by the previous owners and managers, both in a content standpoint as well as from a product standpoint.”
Meanwhile, the TV/media unit posted a 5% revenue decline to $4.7 billion, but saw profits climb 15% year over year to $1.1 billion. Ad revenue fell 10% to $1.9 billion due to political spending and the Big Ten championship in the fourth quarter of 2024. Affiliate revenue fell 7% to $1.7 billion due to lower pay TV subscribers, which was offset by a 10% increase in licensing revenue to $1 billion.
When asked about the upcoming NFL media rights renegotiation, Paramount president Jeff Shell said that management feels “pretty confident” that it will be in business with the league for a long time. Shell added that the company has “properly accounted” for the outcome of that negotiation in its internal forecasts going forward.
Filmed entertainment in a ‘rebuild phase’
As for the filmed entertainment division, revenue grew 16% to $1.26 billion due to the consolidation of Skydance licensing and other revenue, but posted a widened loss of $119 million due to a decline in theatrical revenue year over year. Films released in the prior-year period included “Gladiator II,” “Sonic the Hedgehog 3,” and “Smile 2.”
“We inherited a slate that has underperformed,” Ellison said. “We’re going to see significant improvement in the profitability of the film slate this year.”
Paramount’s new leadership has greenlit 11 movies in its first six months and plans to hit a steady slate of at least 15 movies per year.
“We’ve been very clear overall that we’re in a real rebuild phase of that business. As we execute that rebuild, we’ll see some of that come through in 2026, but mostly that will come through in future years,” Chief Financial Officer Dennis Cinelli added. “Even with the actual revenue dropping down, we do expect better cost management as well as benefits from our licensing deals to drive studio profitability up.”
Paramount avoids WBD sale talk
The latest quarterly results come as Paramount continues to engage with Warner Bros. Discovery’s board after it determined that Ellison’s $31 per share offer could “reasonably be expected” to lead to a “superior proposal.”
The tenth bid includes a daily ticking fee equal to 25 cents per quarter beginning after Sept. 30, 2026. Paramount will pay a $7 billion termination fee to WBD in the event the transaction does not close due to regulatory matters. It will also cover a $2.8 billion termination fee that WBD would be required to pay to Netflix and agreed to eliminate $1.5 billion in potential financing costs associated with WBD’s debt exchange offer.
Additionally, the proposal includes an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by Paramount’s lending banks and a “material adverse affect” definition that excludes the performance of WBD’s Global Linear Networks business.
“We approach investment decisions at Paramount, including our effort to acquire WBD, through the lens of our North Star priorities and financial goals,” Ellison wrote in the company’s quarterly shareholder letter. “While we are confident in our standalone strategy and growth trajectory for Paramount, we view WBD as an accelerant to achieving these goals more quickly, in a way that is economically compelling for Paramount shareholders.”
WBD’s board has not determined whether the revised Paramount bid is superior to its $83 billion deal with Netflix. In the event that it does, Netflix will have four business days to match Paramount’s offer and negotiate with WBD to propose any revisions to its current deal. The Netflix deal remains in effect and the board is not withdrawing or modifying its recommendation.
Shareholders are set to vote on the Netflix deal on March 20 at 8 a.m. ET. Netflix has said it expects a deal to close within 12 to 18 months, while Paramount has argued a potential deal with Warner Bros. would close within a year.
Paramount remains on track for $30 billion in revenue in 2026
Looking ahead, Paramount remains on track for adjusted EBITDA of $3.8 billion and revenue growth of 4% to $30 billion in fiscal 2026, which will primarily be driven by subscription and advertising growth in its streaming business. While the company expects subscribers to grow year over year, it noted that Paramount+ subscribers will only be modestly higher after it exited 4 to 5 million hard bundle subscribers with unattractive economics that accounted for 2% of the service’s revenue in 2025.
It also expects growth in its studio business from its licensing and other segment, including a full-year impact from Skydance revenue, as well as higher licensing across its other studios. Those results will be offset by lower theatrical revenue as it adjusts its film slate and an unfavorable comparison due to lower average box office revenue per film across more releases in 2026.
Meanwhile, Paramount warned that the TV/media division would face continued headwinds to affiliate revenue as a result of declines in its pay TV business and a moderate decline in ad revenue due to the combined impact of political spending in 2026 and the sale of Telefe and Chilevision.
As a result, total revenue growth will be weighted to the second half of the year, while profitability will be evenly weighted. It also expects streaming profitability to grow in 2026 relative to 2025 and said it would reach profitability in its studio segment and have “stable margins” in its TV/media business. Paramount plans to spend in excess of $1.5 billion on content in 2026.
For the first quarter of 2026, Paramount expects between $7.15 billion and $7.35 billion in revenue, or a 1% decline to 2% growth, with strong streaming revenue growth and continued improvement in profitability. Paramount+ subscriber additions will be flat due to the exit of over 1 million subscribers from international hard bundles at the end of 2025. It also expects to incur transaction costs of several hundred million in the first quarter.
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