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FY2026 Q2
Improving
Paramount Skydance Corporation earnings call
Buzzberg read
Streaming accelerating with best retention, double-digit view growth
Paramount Skydance reported strong Q2 results, raising FY26 adjusted EBITDA and free cash flow guidance. The call focused on confidence in the pending WBD merger, streaming growth driven by sports and live events, and efficiency gains. Management highlighted a robust upfront season and accelerating digital advertising. Raised FY26 adjusted EBITDA guidance to $3.8-$3.9 billion, up from prior; free cash flow conversion raised to at least 10% from 5%.
Buzzberg read Streaming accelerating with best retention, double-digit view growth Paramount Skydance reported strong Q2 results, raising FY26 adjusted EBITDA and free cash flow guidance. The call focused on confidence in the pending WBD merger, streaming growth driven by sports and live events, and efficiency gains. Management highlighted a robust upfront season and accelerating digital advertising. Raised FY26 adjusted EBITDA guidance to $3.8-$3.9 billion, up from prior; free cash flow conversion raised to at least 10% from 5%. Read full analysisCollapse analysis
Paramount Skydance reported strong Q2 results, raising FY26 adjusted EBITDA and free cash flow guidance. The call focused on confidence in the pending WBD merger, streaming growth driven by sports and live events, and efficiency gains. Management highlighted a robust upfront season and accelerating digital advertising. Raised FY26 adjusted EBITDA guidance to $3.8-$3.9 billion, up from prior; free cash flow conversion raised to at least 10% from 5%.
- Paramount+ grew to 81.6 million subscribers, with underlying growth (ex-hard bundles) of 4 million, nearly doubling Q1.
- Streaming revenue grew 16% YoY, driven by price increases and strong content like UFC, Dutton Ranch, and World Cup.
- Strong upfront season with double-digit percentage increase YoY, the best since the CBS-Viacom merger.
Revenue$6.913B-6% QoQ
EPS$0.18-22% QoQ
Gross margin35.73%Reported
Operating margin6.87%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
M&A
Merger with Warner Bros. Discovery on track despite litigation
Technology
Convergence of streaming platforms on track for end of summer
Show 3 more callouts
Guidance
Raising free cash flow conversion to at least 10%
Sports
UFC event drove record peak concurrent streams on Paramount+
AI
AI to drive 50% efficiency gains in programming
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $6.913B | -6% QoQ |
| EPS | $0.18 | -22% QoQ |
| Gross margin | 35.73% | Reported |
| Operating margin | 6.87% | Reported |
| Free cash flow | $0.258B | Reported |
| Capex | $0.061B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Free cash flow | FY2026 | $1B | $1B | Raised |
| Operating margin | FY2026 | $3.8B–$3.9B | $3.85B | Raised |
| Operating margin | FY2026 Q3 | $0.875B–$0.975B | $0.925B | Guided |
| Revenue | FY2026 | $30B | $30B | Maintained |
| Revenue | FY2026 Q3 | $6.95B–$7.15B | $7.05B | Guided |
AI, capex & demand read
Management read
Confident
Management expresses strong confidence in strategy execution, DTC growth, and the pending WBD transaction, citing regulatory approvals and improved financial results.
Management AI read
Management views AI as a tool for storytellers, not a replacement, and expects it to unlock creative and efficiency gains, such as 50% faster programming and new interactive fan experiences, while emphasizing premium on handcrafted content.
all 11 named companies below
Companiesreturns since call
Partners
Partners
David Ellison
UFC content on Paramount+ is driving record engagement, indicating strong performance for TKO's content distribution.
Evidence
“UFC 250, which did, you know, 17 million viewers across the US and LATAM. And as TKO announced on their earnings call, you know, 45 million globally”
Partners
Andy Gordon
Charter is a key distribution partner, actively bundling Paramount+ with its video offerings.
Evidence
“Charter has really cared about the video product. They've done a very good job in sort of packaging both as a bundle relative to our cable channel CBS and our P plus credentials”
Suppliers
Suppliers
David Ellison
Management cites Nielsen data to support the pro-competitive nature of the WBD merger.
Evidence
“According to Nielsen. If you include YouTube, which is the industry standard, it represents 13.4% based on the most recent Nielsen data.”
Competitors
Competitors
David Ellison
Management views Amazon as a larger competitor in streaming, which justifies the need for the WBD merger.
Evidence
“we'd be over 200 million basically gross subscribers at close. I think from a competitive standpoint, it's worth noting that that just puts us right around Disney, still obviously not at the scale of Amazon or Netflix.”
Competitors
David Ellison
Management sees Apple as a key competitor in the streaming/entertainment space.
Evidence
“creating a stronger, well-capitalized, creative-first company with a scale to compete alongside Netflix, Amazon, Apple, and others”
Competitors
David Ellison
The combined company would be at similar scale to Disney in streaming, framing the deal as pro-competitive.
Evidence
“we'd be over 200 million basically gross subscribers at close. I think from a competitive standpoint, it's worth noting that that just puts us right around Disney”
Competitors
David Ellison
Management lists Sony among competitors in the theatrical and studio space.
Evidence
“competing against larger-scale global players like Netflix, Amazon, Apple, as well as other studios such as Sony, Disney, Lionsgate, and A24.”
Competitors
Management highlights YouTube's dominance in TV watch time, framing it as the primary competitor in the market share argument.
David Ellison
Competitors
Paramount's licensing library revenue is growing double digits, driven by licensing deals like 'Swaps' to Netflix which became a top 10 film. — Strong library licensing revenue signals a durable content asset base independent of theatrical performance, potentially boosting long-term profitability.
David EllisonSupply chain
Supply chain
Paramount expects to pay $190 million in incremental financing costs if the WBD deal closes in June rather than September, plus ticking fees of $650 million per quarter for WBD shareholders. — Prolonged regulatory approval creates significant merger costs for PSKY and cash flow uncertainty for WBD shareholders if the deal closes later.
David EllisonExternal signals
Supply-chain alpha · 3returns since call
Paramount's studios business is generating 11% more box office per marketing dollar spent year-over-year, indicating improved marketing efficiency.
Paramount expects to pay $190 million in incremental financing costs if the WBD deal closes in June rather than September, plus ticking fees of $650 million per quarter for WBD shareholders.
Paramount's licensing library revenue is growing double digits, driven by licensing deals like 'Swaps' to Netflix which became a top 10 film.
Methodology & coverage
Management-only analysis. All 11 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.