Paramount Skydance Corp. announced first-quarter earnings on May 4, with a reporting style that reflects the company's new strategy of investing in growth opportunities for emerging businesses while maintaining margins for businesses facing headwinds. The company reported impressive adjusted EBITDA growth of 58.6% on a year-over-year basis in the quarter.

Paramount is in the midst of a merger with Warner Bros. Discovery Inc. (WBD), with WBD shareholders voting to approve the merger agreement on April 23. On the company's earnings call, CEO David Ellison said the transaction was on track to close in September. Ellison also reaffirmed the company's full-year outlook of generating $30 billion in revenue and $3.8 billion in adjusted EBITDA.

➤ Paramount Skydance opened 2026 with a commitment to its strategy of cutting costs and maintaining profit margins as it readies itself for a merger with WBD in the fall.

➤ Paramount's direct-to-consumer segment reported subscription growth of around 700,000 in the quarter to 79.6 million.

➤ The studios segment reported a 100% increase in adjusted EBITDA in the quarter, driven by licensing deals.

Paramount's operations are divided into three business segments — TV media, direct-to-consumer (DTC) and studios — with the company's TV media segment generating over 90% of adjusted EBITDA in the first quarter. All three segments reported year-over-year growth in adjusted EBITDA, with the DTC segment reporting the largest growth of $255 million.

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Total company revenue increased 2.2% in the quarter to $7.35 billion as growth in the DTC and studios segments was partially offset by a decline in TV media. Full company advertising revenue fell 2.8% in the quarter to $2.44 billion, while all other revenue streams showed year-over-year improvement. The company's reliance on advertising revenue has declined over the past five years, with advertising accounting for 41.9% of total revenue in the first quarter of 2021 and falling to 33.2% in the first quarter of 2026.

TV media

CBS (US) is the backbone of the TV media segment; however, Paramount also owns a large stable of basic, premium and international TV networks that make up the segment.

The company is pulling back on content costs in the TV media segment, but still invested $1.72 billion in programming expenses in the quarter. A good deal of that goes toward sports media rights for things like the NCAA March Madness basketball tournament and PGA Masters. CBS also touted 13 of the top 20 prime-time series.

Viewership declined across all but one of the Paramount-owned networks that are rated by Comscore Inc., with the combined 24-hour average audience for the 31 channels falling 15.5% in the first quarter of 2026. CBS accounted for over 75% of the combined audience across the portfolio. Thanks in part to viewership declines, advertising revenue at the TV media segment fell 5.6% in the quarter, including a two-percentage-point decline related to the sale of Argentine broadcast network Telefe in October 2025.

Affiliate and subscription revenue in the TV media segment fell 5.8% in the quarter as a result of the continued decline in pay TV subscribers. Paramount generates the lion's share of revenue from affiliate and subscription fees, paid by pay TV operators for carriage of its linear TV channels, and directly from consumers who subscribe to streaming services. Historically, the majority of affiliate and subscription revenue was generated by the linear TV networks, which accounted for 84.2% of the total five years ago in fourth quarter 2020. However, subscription fees from the DTC segment have grown rapidly in recent years, and affiliate fees from the TV media segment have plateaued. As a result, the company generated more affiliate and subscription revenue from the DTC segment in the quarter than from the TV media segment.

Direct-to-consumer (DTC)

Paramount's DTC division posted solid growth in subscribers and revenue in the first quarter while costs were largely held in check, resulting in adjusted EBITDA of $251 million in the quarter. Total first-quarter DTC revenue of $2.40 billion rose by 11.5% versus the prior-year quarter, with advertising and subscription revenue increasing by 9.3% and 12.1%, respectively. The company's reported DTC results now include Paramount+, Pluto TV, BET+ and its linear premium network Paramount+ with Showtime.

Paramount+ revenue grew at a faster clip of 17.1% in the first quarter compared to the DTC division overall, benefiting from price hikes implemented in January in Australia, Canada, Latin America and the US, as well as from a strong sports slate — including NCAA basketball and NFL playoff games — and the launch of UFC programming. The company is in the process of shuttering the stand-alone BET+ streaming service and migrating content to Paramount+ as part of a broader push to consolidate and optimize its offerings.

Paramount+ revenue of $1.97 billion in the first quarter represented 82.3% of total DTC revenue, with total Paramount+ paid subscribers of 79.6 million at the close of the quarter — up around 700,000 on a sequential basis and rising by 1.8 million year over year. Company executives noted that paid subscriber gains in the first quarter came despite exiting international bundle deals that shaved off more than 1 million subscribers. That strategy of exiting less profitable bundle arrangements could continue in the second quarter, with the company expecting flat growth for Paramount+ paid subs as an additional 2 million international bundle subscribers exit the service.

Studios

Paramount Skydance's newly formed studios segment reported a 10.7% increase in revenue in the first quarter, going from $1.16 billion in 2025 to $1.28 billion in 2026. In the letter to shareholders, Paramount attributed the growth to "strong theatrical performance from 'Scream 7' and the consolidation of Skydance licensing revenue into Paramount Television Studios." Total revenue, however, dropped 37.7% compared to $2.06 billion in the fourth quarter of 2025.

The licensing and other segment revenue was the largest source of revenue for the segment at nearly $1.13 billion, up 12.0% from almost $1.01 billion in the first quarter of 2025. Theatrical revenue grew 2.7% from $148.0 million in 2025 to $152.0 million in 2026.

Paramount reaffirmed its commitment to releasing 15 films in theaters in 2026 and to fostering future slates of films with broad global appeal, including both franchises and original films. The company also stated that once the merger with Warner Bros. is completed, it will be releasing "30 films annually across Paramount and Warner Bros., with every film receiving a full theatrical release and a minimum 45-day window, effective immediately."

Paramount Skydance's studios segment released just two films under the Paramount Pictures label in the first quarter of the year. The top release of the quarter was the horror sequel "Scream 7," with its $213.8 million in worldwide box office through April 26. The film has grossed $121.9 million domestically and $91.9 million internationally.

The second film, "Primate," was also a horror film and earned nearly $41.2 million in worldwide box office through April 26. The two films have combined for almost $255.0 million in worldwide box office.

Paramount has four new films on tap for release during the second quarter of the year: the concert documentary "Billie Eilish: Hit Me Hard and Soft – The Tour Live in 3D," another horror film called "Passenger," the comedy "Scary Movie" and the reality comedy "Jackass: Best and Last." Additionally, Paramount plans to rerelease both "Top Gun" and "Top Gun: Maverick" in May to celebrate the first film's 40th anniversary.