Paramount Skydance (NASDAQ:PSKY) reported third-quarter 2025 results showing continued strength in its direct-to-consumer (DTC) business but ongoing weakness in traditional television operations, leading to results below Wall Street expectations.
Revenue came in at $6.71 billion, slightly below the consensus estimate of $6.99 billion, and flat compared to the combined company’s predecessor revenue a year earlier.
Adjusted earnings per share were $0.12, missing forecasts of $0.49.
Operating income totaled $324 million, while the company recorded a net loss of $257 million, largely due to merger-related integration and restructuring costs.
The company’s DTC segment, driven primarily by Paramount+, grew 17% year-over-year to $2.17 billion in revenue, supported by a 24% increase in Paramount+ sales.
The streaming platform reached about 79.1 million subscribers, with both subscriber and average revenue per user (ARPU) up roughly 10% to 11% from the prior year.
In comparison, the TV Media segment saw a 12% year-over-year revenue decline, driven by an advertising drop of 12%, a 7% decline in affiliate fees amid continued pay-TV subscriber losses, and lower licensing revenue.
The company attributed some of the advertising weakness to reduced political spending and a tough comparison with prior-year results that benefited from one-time revenue recognition.
Filmed Entertainment revenue rose 30% year-over-year, largely reflecting the consolidation of Skydance’s content operations following the merger.
Looking ahead, Paramount Skydance guided Q4 revenue between $8.1 billion and $8.3 billion, representing 1% to 4% growth from a year earlier, led by gains in DTC.
Adjusted operating income before depreciation and amortization (OIBDA) is expected to range from $500 million to $600 million. The company also expects to record about $500 million in restructuring charges.
For the full year, management reiterated that the DTC segment is expected to be profitable in 2025, with profitability improving further in 2026. The company projects 2026 revenue of approximately $30 billion and adjusted OIBDA of $3.5 billion.
Paramount’s strong DTC growth and upbeat forecast saw its shares surge almost 8% pre-market on Tuesday.