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    PSKY
    Earnings call· Mar 2026(Q1 FY26)

    Paramount Skydance Q1 FY26 earnings call PSKY

    May 4, 2026 Source

    Executive summary

    Paramount Skydance Corporation Q1 FY26 — Strong Streaming Growth and WBD Transaction Progress

    Paramount Skydance reported a strong Q1 FY26, showcasing momentum in its core businesses and significant progress on the Warner Bros. Discovery transaction. The company is prioritizing quality content and leveraging technology, including AI, to drive efficiency and enhance the consumer experience. Despite strategic subscriber exits from low-ARPU bundles and a slight ad revenue decline, management expressed confidence in its strategy and the accelerated growth potential from the pending WBD combination.

    Highlights

    5

    • Paramount+ revenue increased 17% year-over-year, driven by ARPU growth and subscriber mix.

    • Added 2 million underlying subscribers to Paramount+ in Q1 FY26, demonstrating healthy organic growth.

    • Studio revenue grew 11% year-over-year, boosted by film performance and third-party TV studio expansion.

    • The UFC partnership exceeded expectations, with over 10 million households watching and 100 million hours viewed on Paramount+.

    • CBS maintained strong primetime performance with 13 of the top 20 series, including all 4 top new series.

    Concerns

    3

    • Exited over 1 million international hard bundle subscribers from Paramount+ due to uneconomic ARPU (less than $1).

    • Overall ad revenue declined 3% year-over-year in Q1 FY26, though showing improvement compared to Q4 FY25.

    • DTC EBITDA margin is expected to be negatively impacted in Q3 and Q4 FY26 due to upcoming content slate launches.

    Guidance & targets

    5
    CategoryTargetConfidence
    Streaming Service Consolidation
    Consolidate 3 streaming services into one unified platform
    high materiality
    High
    Warner Bros. Discovery Transaction Completion
    Transaction closed
    high materiality
    High
    Overall Ad Business Growth
    Return to growth
    medium materiality
    Medium
    DTC EBITDA Margin
    Some margin hit
    medium materiality
    High
    Oracle Fusion ERP System Transformation
    Completion for Paramount stand-alone
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    DTC
    Paramount+ revenue was up 17% year-over-year, driven by a 14% increase in ARPU and healthy underlying subscriber growth.
    		—17%——
    Studio
    Overall studio revenue was up 11% year-over-year, a combination of film delivery (e.g., Scream) and building the third-party TV studio.
    		—11%——
    TV Media (CBS)
    CBS has 13 of the top 20 primetime series, including all 4 of the top new series, an achievement not matched since the early 1990s.
    Primetime Series in Top 20: 13Top New Primetime Series: 4
    		————

    Operational metrics

    17
    Paramount+ Revenue Growth
    17YoY
    Q1 FY26

    Driven by a 14% increase in ARPU and healthy underlying growth in subscribers.

    Paramount+ ARPU Growth
    14YoY
    Q1 FY26

    A mix of price increase in January and continued improvement in the underlying subscriber base and mix.

    Paramount+ Underlying Subscriber Adds
    2
    Q1 FY26

    Added 2 million underlying subscribers, offset by exits of international hard bundles.

    Paramount+ International Hard Bundle Exits
    1
    Q1 FY26

    Strategic exit of uneconomic subscribers with very low average ARPU.

    Studio Revenue Growth
    11YoY
    Q1 FY26

    A combination of delivery on films like Scream and continuing to build the third-party TV studio.

    Overall Ad Revenue Decline
    3YoY
    Q1 FY26

    Improved versus Q4 FY25; the D2C ad business returned to growth.

    D2C Ad Business Growth
    returned to growth
    Q1 FY26

    Part of the overall ad business, which is expected to return to growth in the back half of the year.

    Engineering Code-Assisted Technology Adoption
    80
    Q1 FY26

    80% of the engineering organization is using code-assisted technology, driving meaningful production gains.

    VODs per user
    up 60
    Q1 FY26

    Higher quality engagement metrics on Pluto, as the platform switches to VODs.

    UFC Households Watched
    10M+
    Q1 FY26

    More than 10 million households have watched UFC programming on Paramount+.

    UFC Hours Viewed
    100M+
    Q1 FY26

    Over 100 million hours of UFC content viewed on Paramount+.

    UFC Viewership (CBS Main Fight Cards)
    2.8Mnearly 50% higher than ABC's NBA primetime game
    Q1 FY26

    Main fight cards across UFC 326 and 327 averaged 2.8 million viewers.

    UFC Subscriber Age Differential
    15 years younger
    Q1 FY26

    New UFC subscribers are on average 15 years younger than the average Paramount+ viewer.

    Film Slate Output
    15up from 8 last year
    FY26

    The film studio has nearly doubled its output for the current year.

    Combined Film Slate Output (PSKY+WBD)
    30
    FY26

    The two companies are currently making 30 films to date, with 15 from Paramount and 15 from WBD.

    CBS Primetime Series in Top 20
    13
    Q1 FY26

    CBS has 13 of the top 20 primetime series.

    CBS Top New Primetime Series
    4
    Q1 FY26

    CBS has all 4 of the top new primetime series, an achievement not matched since the early 1990s.

    Industry KPIs

    3
    MetricValueDetails
    Content title performance—
    Ai product feature adoption80%
    M a integration cost synergies—

    Product announcements

    3
    ProductTypeDetails
    Paramount+ (unified platform)update
    Pluto (significant update)update
    Oracle Fusion ERP systemmilestone

    Deals & partnerships

    1
    Warner Bros. Discovery (WBD)Acquisition of WBD to create a leading global media and entertainment company, powered by storytelling and accelerated by technology.secured $10 billion in permanent financing and syndicated the remaining $49 billion of bridge to a group of leading banks and institutional lenders

    Satisfied U.S. HSR obligations, advancing through European and international regulatory approvals (several secured). Announced broad syndication of PIPE equity commitments to strategic investors. WBD shareholders approved the transaction on April 23.

    Risks & headwinds

    3
    DTC EBITDA margin pressureQ3 and Q4 FY26

    margin hit

    Mitigation: Management is balancing content timing, and overall expenses for the year are expected to be on track with expectations.

    International hard bundle subscriber exitsQ1 FY26

    over 1 million subscribers exited

    Mitigation: This was a strategic exit of uneconomic subscribers, as their average ARPU was less than $1.

    Overall ad revenue declineQ1 FY26

    declined 3%

    Mitigation: The company is retooling its go-to-market strategy, consolidating sales organizations, making platform investments, and using AI-powered ad products. The D2C ad business returned to growth, and the overall ad business is expected to return to growth in H2 FY26.

    What to watch in Q2 FY26

    5

    Streaming service convergence

    by mid-year
    CurrentOn track to consolidate 3 services
    TargetUnified platform rolled out

    Why it matters

    This is foundational for tech stack integration and consumer experience improvements, crucial for the WBD transaction.

    we're on track, as we discussed previously🔁, to really consolidate our 3 streaming services into one unified platform by really the middle of this year.

    Q&A highlights

    5

    What are the early learnings from converging tech stacks, and how is AI transforming the business beyond ad tech?

    Management highlighted being on track to consolidate three streaming services by mid-year, which is crucial for WBD integration. They noted successful execution on cost savings and efficiencies. AI is being used in back-office functions (finance, HR) and 80% of engineering uses code-assisted technology, cutting approval times by more than half.

    “we're on track, as we discussed previously, to really consolidate our 3 streaming services into one unified platform by really the middle of this year. Those learnings are going to be crucial as we get into basically the transaction with WBD.”

    asked by Sean Diffley · answered by David Ellison

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Vision & WBD Transaction Progress

    Management views the pending acquisition of Warner Bros. Discovery as a powerful accelerant to its strategy, expanding reach and enhancing storytelling capabilities. The transaction is on track for completion by September 2026, with U.S. HSR obligations satisfied and international regulatory approvals advancing, several already secured. The combined entity is expected to create a leading global media and entertainment company, powered by storytelling and technology, with over 200 million DTC subscribers and a presence in over 200 countries.

    02

    Content & Creative Momentum

    The company emphasizes a 'quality as the best business plan' philosophy across its film, television, and streaming businesses. Recent highlights include *Scream 7* becoming the highest-grossing film in its franchise's 30-year history, *Landman* becoming the most-watched series in Paramount+ history, and CBS achieving 13 of the top 20 primetime series. The film slate has nearly doubled to 15 films for FY26, and the combined PSKY-WBD entity is already producing 30 films annually, leveraging beloved franchises like Harry Potter, Top Gun, and Yellowstone.

    03

    Technology & AI Integration

    Paramount is actively transforming its operations by unifying platforms, data, and workflows, and embedding advanced technology. Key initiatives include consolidating three streaming services into one unified platform by mid-2026, modernizing consumer-facing technology for dynamic and personalized experiences, and a significant update to Pluto this summer. AI is being leveraged across various functions, including ad tech with the Precision+ platform, and in back-office operations (finance, HR) to drive efficiency and accelerate workflows, with 80% of engineering using code-assisted technology.

    04

    DTC Performance & Subscriber Dynamics

    Paramount+ revenue grew 17% year-over-year in Q1 FY26, driven by a 14% increase in ARPU from price adjustments and an improved subscriber mix. The platform added 2 million underlying subscribers during the quarter, while strategically exiting over 1 million international hard bundle subscribers with an average ARPU of less than $1, which were deemed uneconomic. Engagement remains strong, with the UFC partnership significantly contributing to viewership and attracting younger subscribers who then engage with other content on the platform.

    05

    Advertising Business Transformation

    The company is retooling its advertising business, consolidating national sales organizations under unified leadership and bringing in new talent from leading digital platforms. Significant platform investments are being made in ad tech, including the AI-powered Precision+ product, which is generating positive early market feedback. While overall ad revenue declined 3% in Q1 FY26, the D2C ad business returned to growth, and the company expects the total ad business to return to growth in the second half of 2026.

    06

    UFC Partnership Success

    The 7-year UFC partnership has exceeded early expectations, with over 10 million households watching and more than 100 million hours of UFC content viewed on Paramount+. New UFC subscribers are, on average, 15 years younger than the average Paramount+ viewer and show high engagement with other platform content. Main fight cards on CBS averaged 2.8 million viewers, outperforming comparable NBA games, and advertising demand for UFC content exceeded expectations, contributing meaningfully to Q1 ad revenue.

    AI-generated summary of the company’s earnings call. Not investment advice.