Paramount Skydance (PSKY) reported its first quarterly results as a merged company, pushing its shares up 6.6% in after-hours trading yesterday. The media giant posted pro-forma sales of $6.71 billion, flat year-over-year and below the $6.99 billion consensus estimate. The Direct-to-Consumer (DTC) segment grew 17%, while TV Media and Filmed Entertainment declined 12% and 4%, respectively, compared to Q3 FY24.
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Adjusted OIBDA (operating income before depreciation and amortization) rose 10.9% to $952 million from $858 million a year earlier. Paramount Skydance stated that Paramount+ surpassed 79 million global subscribers, up from 77.7 million in Q2.
PSKY Issues Bold Guidance
CEO David Ellison issued an upbeat guidance for the coming quarter and fiscal year, backed by a solid content slate and a growing subscriber base. The company raised its projected merger-related cost savings by $1 billion to a total of $3 billion.
Paramount Skydance expects fourth-quarter revenue between $8.1 billion and $8.3 billion, above the $8.04 billion consensus, and adjusted OIBDA of $500 million to $600 million.
For FY26, Ellison targeted $30 billion in revenue, driven by faster growth in DTC revenue and global profitability. The company plans to increase theatrical releases to at least 15 movies per year starting in 2026 and invest over $1.5 billion in new programming. The DTC business remains the top priority as broadcast operations continue to decline.
PSKY Undergoes Major Restructuring
Paramount announced about 1,600 layoffs tied to asset sales in Argentina and Chile, following recent plans to cut around 1,000 jobs. The company also plans to raise Paramount+ subscription prices in early 2026 to invest in more content and upgrade the platform’s technology.
Starting with Q1 FY26 results, Paramount Skydance will reorganize its financial reporting into three segments: Direct-to-Consumer, TV Media, and Studios. The Studios division will include all production, intellectual property, and most licensing revenue, while TV Media will retain broadcasting and cable operations.
Ellison refrained from making any comments about its attempt to acquire Warner Bros. Discovery (WBD). He simply stated that there are no “must-haves” for us. “We really look at this as buy versus build, and we absolutely have the ability to build to get to where we want to go.”
Is PSKY Stock a Buy, Hold, or Sell?
Ahead of the Q3 print, PSKY stock had a Moderate Sell consensus rating based on two Buys, seven Holds, and six Sell ratings. The average Paramount Skydance price target of $13.58 implies nearly 11% downside potential from current levels. Year-to-date, PSKY stock has surged over 47%.
Please note that these ratings were issued before the Q3 results and may change once analysts update their views.
