Paramount Skydance Corp Q4 FY2025 earnings call

David Ellison mentioned ending the fiscal year with a strong first full quarter under the leadership team, positive momentum heading into 2026, and progress since the launch of the new Paramount. Andy Warren's tenure as interim CFO was acknowledged, and Dennis Cianelli was welcomed. They also discussed the proposal to acquire Warner Brothers Discovery, with a revised bid of $31 per share all cash submitted. On streaming, the UFC partnership started well with UFC 324 reaching ~7 million households, Paramount Plus saw over 17% year-to-date growth, ad revenue was more promising than expected. In the studio segment, they're rebuilding, with plans to increase film releases, greenlit 11 original series. Linear TV anchored by CBS had strong performance. For Pluto, engagement is up but monetization is a headwind, and efforts are underway to improve it.

Expect revenue of $30 billion in 2026, up 4% year-on-year. DTC to accelerate growth with subscriber growth and price increases, exiting uneconomic hard bundles (less than 2% of Paramount Plus revenue in 2025). DTC ad revenue expected to grow. TV media expected to see revenue declines in line with industry, advertising declines to be more moderate. Studios expect theatrical revenue decline in 2026 but overall studio revenue growth driven by licensing and Skydance integration. Expect to realize $3 billion-plus of synergies. Committed to investment grade with all three rating agencies, aiming for free cash flow positive by next year.

Q: Comment on initial experience as home of UFC on streaming and viability of being something for everyone every day.

A: UFC partnership started well with UFC 324 reaching ~7 million households, strong advertising demand, UFC fans engaging with other content. Streaming up over 17% year-to-date.

Q: Follow-up on D2C, ARPU, cost.

A: DTC to accelerate growth with subscriber growth, mix shift, price increases in Q1, exiting uneconomic hard bundles. DTC ad revenue expected to grow, DTC profitability to improve. TV media revenue declines in line with industry, advertising declines moderated. Studios theatrical revenue decline in 2026 but overall studio revenue growth.

Q: Conversations with NFL, NFL game availability on Paramount Plus, free cash flow.

A: Talk to NFL daily, confident in long-term partnership. Geofencing of NFL games on Paramount Plus related to maximizing reach. Committed to investment grade, expect free cash flow positive by next year.

Q: Growth via core franchises, IP, content spending with Warner Brothers.

A: Won't comment on Warner Brothers. Focus on reinvigorating core franchises, greenlit 11 original series, increased content spend.

Q: Leveraging IP across ecosystem, monetizing IP.

A: Example of Teenage Mutant Ninja Turtles with films, series, consumer products. Paramount One initiative to activate IP across ecosystem.

Q: AI positioning, content creation, licensing, AI-generated short clips.

A: AI as tool for artists, not commoditizing content, IP valuable. Investing in AI, engineers, IP protection.

Q: Studio theatrical revenue decline, Pluto headwinds.

A: Studio revenue growth overall driven by licensing and Skydance, theatrical decline in 2026 due to comping last year's big output. Pluto engagement up, monetization headwind, efforts to turn around with new leadership and product improvement.

Q: UFC MAUs, churn, CAC.

A: UFC 324 reached ~7 million households, churn trending right direction, opportunities to improve with content and product investments. Churn affected by seasonality and new content investments.