Paramount Skydance Corporation Class B Common Stock Q1 FY2026 earnings call

• Strong start in first full year at P-SCI with progress in various business areas, attracting top creative talent, doubling film slate, greenlighting new series. - Transforming operations by unifying platforms, data, workflows, and embedding advanced tech. - Recent highlights: Scream 7 as highest-grossing in franchise history, Landman most-watched series in Paramount Plus history, CBS's primetime strength. - Making strides in improving products for dynamic, personalized experiences and superior monetization, using AI-powered capabilities. - Making progress towards Warner Brothers Discovery Transactions, satisfied U.S. HSR obligations, advancing international regulatory approvals, secured financing and PIPE equity commitment, WVD shareholders approved the transaction. - Early learnings in business transformation: on track to consolidate streaming services into one unified platform by mid-year, executing on cost saves and efficiencies, learning from integrating BET+, Pluto, and Paramount into one tech stack which will help with WBD integration, modernizing consumer-facing technology for personalized experiences, using code-assisted technology in engineering org, spinning up pods for AI-based workflows in back office, and major milestone in ERP system transformation to Oracle Fusion System for Paramount standalone by early 2027.

Paramount Plus revenue was up 17% in Q1, driven by a 14% increase in ARPU (a mix of price increase in January and underlying subscriber base improvement). Added nearly 2 million subscribers in the quarter on an underlying basis, exited over a million international hard bundles. Studio revenue was up 11% in Q1, with Scream 7 contributing. CBS has 13 of the top 20 primetime series, including all four top news series. Streaming and sports engagement: over 10 million households watched over 100 million hours of USC programming on Paramount+, CBS Sports delivered most-watched final round of Masters in over a decade.

• Paramount Plus revenue growth is second half weighted. Underlying drivers of growth include healthy growth in underlying subscribers as content slate fills in and improvement in ad monetization. - Expect overall ad business in total for the company to return to growth in the back half of the year, driven by D2C accelerating and offsetting declines in TV media. - Plan to balance content expenses for the year, with some margin hit in D2C due to slate launch in Q3 and Q4. - Confident in strategy and trajectory despite significant work ahead, with pending WBD transaction seen as an accelerant towards goals.

Q: Comment on business transformation early learnings as you converge tech stacks between Paramount Plus and Pluto and how AI is transforming the business.

A: Early learnings include ability to execute and move quickly in transformation, on track to consolidate streaming services by mid-year, great learnings on cost saves and efficiencies, integrating BET+, Pluto, and Paramount into one tech stack will help with WBD integration, modernizing consumer-facing tech for personalized experiences, using code-assisted technology in engineering org, spinning up pods for AI-based workflows in back office, major milestone in ERP system transformation. On AI, using AI-powered capabilities across businesses, including agentic data warehouse and Precision Plus, and spinning up pods for AI-based workflows in back office.

Q: Changes in allocating capital or management attention as integrating WBD and thoughts on 30 films.

A: View pending acquisition of WBD as a powerful accelerant, expanding reach and creating world's most compelling stories, firmly committed to 30 theatrical films per year, with 15 films on release calendar this year from Paramount and 15 from WBD, building scaled D2C competitor with over 200 million DTC subscribers across over 100 countries, and presence in over 200 countries with linear businesses. Focus most of call on results and outlook rather than WBD specifics.

Q: Allocating company programming budget towards higher quality content vs volume-based approach and short-form ads.

A: Core thematic is quality is best business plan, increased investment in content this year with doubled film studio output and increased original series greenlit, emphasis on quality in storytelling while scaling. On short-form ads, vertical short-form product to deepen engagement, early high engagement with clips leading people to various content, early innings but seeing positive metrics.

Q: Engagement goals for Paramount Plus in 2026-2027 and view on channel stores.

A: Engagement driven by increased content and tech investments, on track to accomplish convergence by mid-year, hiring against best-in-class goal with resources in engineering and AI talent. View on channel stores is case-by-case, evaluate partnerships for win-wins, focus on high-quality, high-calorie engagement.

Q: Underlying drivers of growth at Paramount+ and impact of content expense benefit.

A: Underlying drivers include healthy growth in underlying subscribers as content slate fills in and improvement in ad monetization. Content expense benefit has some from Skydance transaction that flows through this year, steps down next year, and will be recast and called out if material each quarter.

Q: Programming cost environment and fresh ideas on ad sales.

A: On programming, able to work through Greenlight process competitively, no impact on budgets or creative costs seen. On ad sales, retooling go-to-market, consolidating national sales organizations, bringing in new talent from digital leading platforms, using Precision Plus AI-powered ad product, format innovation pod driving new ad experiences, using AI-driven QA, first upfront completed with positive feedback, expecting ad business to return to growth in back half.

Q: Detail on UFC performance and reason for selling content to competitors.

A: UFC partnership exceeded expectations with over 10 million households watching over 100 million hours, average viewership 15 times pay-per-view, subscribers 15-year younger, spending more time, advertising demand exceeded expectations. On selling content to competitors, no one-size-fits-all approach, evaluate on case-by-case basis, some series may increase in viewership when back on owned platform, important for talent perspective to offer most opportunities to showrunners and be desirable from talent perspective