Paramount Skydance (PSKY) Q1 2026 earnings summary

Executive summary

• Achieved strong Q1 2026 results, with significant progress in business transformation, content output, and a new reporting structure following the Skydance Transactions completed August 7, 2025.

• Revenues for Q1 2026 rose 2% year-over-year to $7.35 billion, driven by Paramount+ growth and higher licensing revenues, partially offset by linear network declines.

• Unified platforms and workflows, leveraging advanced technology and AI to drive efficiency and enhance experiences.

• Major content successes include Scream VII (highest-grossing in franchise), Landman (most-watched Paramount+ series), and CBS leading primetime ratings.

• Paramount+ and sports engagement robust, with over 10 million households watching UFC on Paramount+ and CBS Sports delivering record Masters viewership.

Financial highlights

• Q1 2026 GAAP revenue was $7,347 million, up from $6,849 million in Q1 2025; Adjusted EBITDA surged 59% to $1.16 billion, benefiting from cost reductions and Skydance integration.

• Paramount+ revenue up 17% year-over-year, driven by a 14% increase in ARPU and underlying subscriber growth.

• Q1 2026 GAAP net earnings attributable to Parent were $168 million, up 11% year-over-year; diluted EPS was $0.15 (GAAP) and $0.23 (Adjusted).

• Free cash flow for Q1 2026 was $353 million, compared to $123 million in Q1 2025.

• Content costs decreased 2% to $3.78 billion, reflecting programming asset reductions and cost initiatives.

Outlook and guidance

• Expect continued healthy subscriber growth and improved ad monetization, with revenue growth weighted to the second half as content slate fills in.

• D2C EBITDA margins expected to be impacted in Q3 and Q4 due to timing of content launches.

• The WBD Merger is expected to close by Q3 2026, subject to regulatory approvals.

• Management anticipates continued cost savings and integration benefits from recent transactions.

• Risks include macroeconomic uncertainty, advertising market volatility, and integration challenges.