Paramount Skydance (PSKY) Q2 2024 earnings summary

Executive summary

• Announced a definitive merger agreement with Skydance Media, expected to close in the first half of 2025, with a $6.0 billion investment and ongoing support for the current strategic plan.

• Strategic plan execution includes $500 million in annualized cost savings, a focus on streaming profitability, and free cash flow growth.

• Q2 2024 revenue was $6.81 billion, down 11% year-over-year, mainly due to lower licensing, linear network, and theatrical revenues, partially offset by streaming growth.

• Adjusted net earnings from continuing operations for Q2 2024 were $361 million, compared to $80 million in Q2 2023.

• Paramount+ global subscribers reached 68.4 million at Q2 2024, up 13% year-over-year but down 2.8 million sequentially due to a planned exit from the TVING partnership in South Korea.

Financial highlights

• Q2 2024 GAAP net loss from continuing operations was $5.41 billion, driven by a $5.98 billion goodwill impairment in Cable Networks.

• Adjusted OIBDA for Q2 2024 was $867 million, up 43% year-over-year, reflecting improved streaming results.

• Paramount+ revenue increased 46% year-over-year; D2C advertising grew 16% in Q2.

• Free cash flow for Q2 2024 was $219 million, compared to $10 million in Q2 2023.

• Paramount+ global ARPU expanded 26% in the quarter.

Outlook and guidance

• Paramount+ is on track to reach domestic profitability in 2025, with full-year D2C segment profitability as the main goal.

• Paramount+ expected to return to net subscriber growth in the second half of 2024, with normalized international growth.

• Additional restructuring charges of $300–$400 million for severance expected in Q3 2024 as part of ongoing transformation.

• Free cash flow and total company OIBDA expected to grow significantly in 2024.

• Licensing revenue expected to return to growth in the second half of 2024, but modest decline for the full year.