Paramount Skydance (PSKY) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $6.73 billion, down 6% year-over-year, with operating income of $337 million and adjusted OIBDA up 20% to $858 million, reflecting strong streaming and cost efficiency despite restructuring and impairment charges.

• Paramount+ added 3.5 million subscribers, reaching 72 million globally, and achieved its second consecutive quarter of profitability, maintaining its position as the #4 global SVOD service.

• The company is executing $500 million in annual cost reductions and remains on track for domestic streaming profitability in 2025.

• The Skydance transaction advanced, with key regulatory milestones achieved and expected closure in the first half of 2025.

• Significant programming and impairment charges, including a $5.98 billion goodwill impairment for Cable Networks, impacted reported results.

Financial highlights

• Adjusted OIBDA for Q3 2024 was $858 million, up 20% year-over-year, with adjusted diluted EPS of $0.49 and free cash flow of $214 million.

• Paramount+ global subscribers reached 71.9 million at quarter-end, with global ARPU up 11% year-over-year.

• D2C revenue grew 10% to $1.86 billion, with adjusted OIBDA improving to $49 million from prior losses.

• TV Media revenue declined 6% to $4.3 billion, with adjusted OIBDA down 19% to $936 million.

• Filmed Entertainment revenue fell 34% to $590 million, but adjusted OIBDA improved to $3 million.

Outlook and guidance

• Paramount expects to close the Skydance transaction in the first half of 2025, pending regulatory approvals.

• The company remains focused on cost reductions, DTC profitability, and continued subscriber and ARPU growth.

• Management anticipates continued volatility in advertising and linear affiliate markets, with streaming growth partially offsetting declines.

• Full-year free cash flow growth expectations remain unchanged.