Paramount Skydance (PSKY) revealed its first quarterly results after the merger, and the stock jumped by 6.6% in after-hours trading yesterday. The media company’s estimated revenue reached $6.71 billion, which is flat compared to last year and falls short of the consensus estimate of $6.99 billion. In comparison to Q3 2024, the direct-to-consumer (DTC) segment saw a 17% increase, while TV media and filmed entertainment dropped by 12% and 4%, respectively.
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Adjusted operating income before depreciation and amortization (OIBDA) grew by 10.9% to $952 million, up from $858 million in the same timeframe last year. Paramount Skydance also noted that Paramount+ has now surpassed 79 million global subscribers, an increase from 77.7 million in the previous quarter.
PSKY announces bold guidelines
CEO David Ellison shared a positive outlook for the upcoming quarter and fiscal year, fueled by strong content and an expanding subscriber base. The company raised its projected savings from the merger by $1 billion, totaling $3 billion.
For the fourth quarter, Paramount Skydance anticipates revenue between $8.1 billion and $8.3 billion, which exceeds the consensus of $8.04 billion, alongside an adjusted OIBDA of $500 million to $600 million.
Mr. Ellison set a target of $30 billion in revenue for fiscal year 2026, aiming for rapid growth in DTC revenue and global profitability. Starting in 2026, the company is looking to ramp up theatrical releases to at least 15 films annually and invest over $1.5 billion in new programming. As traditional broadcasting continues to decline, enhancing DTC operations remains a priority.
PSKY carries out large-scale organizational reorganization
Paramount has announced about 1,600 layoffs stemming from asset sales in Argentina and Chile, following earlier plans to cut around 1,000 jobs. In early 2026, the company also intends to raise subscription prices for Paramount+ as it invests in more content and technology upgrades.
Beginning with its first quarter 2026 outcomes, Paramount Skydance will reorganize financial reporting into three segments: Direct-to-Consumer, Television Media, and Studios. The Studio division will encompass all production and intellectual property alongside most licensing revenue, while TV Media will continue handling broadcast and cable operations.
Ellison didn’t comment on the potential acquisition of Warner Bros. Discovery (WBD), simply indicating that there isn’t a ‘must-have’ for them. “We’re seriously looking at this as a buy and build, and we absolutely have the build capabilities to get us where we want to go,” he stated.
Is PSKY stock a buy, hold, or sell?
Before Q3 results were released, the consensus rating for PSKY stock was a “Moderate Sell,” based on 2 Buys, 7 Holds, and 6 Sells. The average price target for Paramount Skydance stands at $13.58, suggesting a potential downside of nearly 11% from current levels. Since the start of the year, PSKY stock has climbed over 47%.
These ratings were given before Q3 earnings and might change as analysts reassess their perspectives.
