While the outcome of Paramount Skydance’s bid for Warner Bros. Discovery hangs in the balance, Paramount is laser-focused on driving streaming growth.
Paramount Skydance reported 10% year-over-year revenue growth in the previous quarter coming from direct-to-consumer, which is marketingese for subscription revenue. Overall revenue grew 2% YOY in Q4 to $8.15 billion. This year, the company expects its total revenue to hit $30 billion, representing 4% YOY growth overall, with DTC as the main driving force.
“It’s been a productive six-plus months since the launch of the new Paramount, and we are pleased with the progress made in a relatively short period of time,” David Ellison, chairman and CEO of Paramount Skydance, told investors during the company’s earnings call on Wednesday.
The phrasing “new Paramount” refers to the official merger between Paramount Global and Skydance Media that closed last summer. Since the merger, however, Paramount’s stock has seen significant volatility. It dipped slightly post-earnings call.
Ellison also briefly acknowledged Paramount’s pursuit to acquire Warner Bros. Discovery, but refused to take any questions from investors regarding the matter.
“On Monday, we submitted a revised bid of $31 per share, all cash, and we look forward to continuing to engage with their leadership team and board,” Ellison told shareholders.
Show me the money
Paramount dedicated the rest of its earnings call touting its streaming TV growth – including subscriptions and advertising.
“We continue to see healthy subscriber growth accelerate in 2026, and this will result in better ARPU [average revenue per user] as we realize price increases in Q1,” said Dennis Cinelli, the company’s new CFO.
ARPU has long been a key factor in Wall Street’s valuation of streaming media companies, and it typically rises sustainably when media companies have a healthy mix of subscription and advertising revenue. Or when streamers raise prices, as Paramount plans to do.
“Coupled with subscriber growth, we also expect DTC ad revenue to grow this year [as] we’re investing in better ad tech and programming to drive better engagement,” Ellison said.
In Paramount’s case, the first step to improving ad revenue growth is changing how it structures and sells inventory.
Course-correcting
Paramount+ is the company’s golden child in the intensifying streaming wars.
Paramount+ in particular saw 17% YOY revenue growth last quarter, while “non-Paramount+ was down 16%, primarily driven by Pluto,” Cinelli said, despite the fact that Pluto’s engagement rose, according to the company. Paramount+ subscribers total 79 million.
The linear TV biz remains in decline, but Paramount said it will do a better job selling what’s left. “We expect to see some declines in [TV ad] revenue in line with industry headwinds around pay TV,” Cinelli said. “But we expect our advertising revenue declines to be more moderate as we execute overall better ad sales.”
Paramount also expressed intentions to invest significantly in improving the product and user experience across Paramount+ and Pluto to drive more subscriptions. Part of this improvement involves an expanded programming slate, including more live sports events.
For one, Paramount+ is officially the exclusive home for the UFC’s full slate of events and Fight Nights as of last month, with select events to be simulcast on CBS.
“We expect DTC profitability to improve YOY as we both grow revenue and manage our investments,” Cinelli said. And “we feel really good about the upfront coming up this year,” he added.
And with that, let the upfront planning season begin.
