Paramount Global: Mixed Earnings Report

Paramount Global released its Q2 2025 earnings report on Thursday, highlighting robust growth in its streaming business despite ongoing challenges in its traditional TV media segment.

The report underscores Paramount’s strategic shift toward a streaming-first model as it prepares for its $8 billion merger with Skydance Media, expected to close in early August 2025. 

Highlights for Q2 2025 

• Revenue: Total revenue increased 1% year-over-year to $6.85 billion, up from $6.81 billion in Q2 2024, driven by streaming gains but tempered by declines in traditional TV. This fell slightly short of analyst expectations, which were not specified in the sources but implied by market reactions.
• Earnings Per Share (EPS): Paramount reported a profit of $57 million, or $0.08 per share, a significant improvement from a $5.41 billion loss in Q2 2024, which included a substantial impairment charge on its cable networks. Adjusted EPS was not detailed but contributed to a positive market perception.
• Operating Income: Adjusted operating income before depreciation and amortization (OIBDA) for the direct-to-consumer (DTC) segment surged to $157 million, up $131 million from Q2 2024, reflecting strong streaming revenue growth and cost management.
• Net Operating Cash Flow: Generated $159 million, with free cash flow at $114 million, indicating effective cash management despite investments in streaming.

Streaming Segment Performance

• Revenue Growth: The DTC segment, encompassing Paramount+, Pluto TV, and niche services like BET+, saw revenue rise 15% to $2.16 billion, up from $1.88 billion in Q2 2024. Paramount+ revenue specifically surged 23%, driven by:
• Subscriber Trends: Paramount+ lost 1.3 million subscribers, ending the quarter with 77.7 million global subscribers, down from 79 million in Q1 2025. The decline was attributed to seasonal churn and weaker content releases compared to Q3 2024’s NFL-driven growth. However, global average revenue per user (ARPU) increased 9%, reflecting price hikes implemented in August 2024 and a shift toward premium tiers.
• Profitability Progress: The DTC segment’s $157 million adjusted OIBDA marked a significant improvement, reducing streaming losses. For the first half of 2025, streaming losses were substantially lower than the $1.18 billion loss in the first nine months of 2024. 

Paramount reiterated its goal of achieving domestic Paramount+ profitability in 2025, with co-CEOs George Cheeks, Chris McCarthy, and Brian Robbins stating, “Streaming revenue growth outpacing linear declines, driven by exceptional performance at Paramount Plus.”

Traditional TV Media Challenges

• Revenue Decline: The TV Media segment, including CBS, MTV, Nickelodeon, and Comedy Central, saw revenue drop 6% to $4.01 billion from $4.27 billion in Q2 2024. Key factors included:Advertising Headwinds: Linear advertising revenue continued to decline, though specific figures for Q2 2025 were not provided. This follows a 15% ad revenue drop in Q4 2024, driven by global market softness and reduced political advertising.
• Cord-Cutting Trends: Ongoing churn in cable and satellite subscriptions reduced distribution fees from pay-TV providers, reflecting broader industry shifts toward streaming.
• Profitability Impact: Linear profits fell, continuing a trend seen in Q3 2024 (down 19%), as cord-cutting and lower carriage fees pressured margins. Paramount’s $6 billion write-down on its cable business in 2024 underscores the segment’s declining value.

While, Paramount’s per-share earnings and revenue missed expectations, signaling challenges for incoming CEO David Ellison. However, Paramount+ showed revenue growth despite ongoing subscriber declines, offering a potential positive. 

Co-CEO Chris McCarthy, speaking for the leadership trio, emphasized the company’s streaming future. Shari Redstone, controlling shareholder of National Amusements, Paramount’s parent, voiced confidence in Skydance’s technology and resources to strengthen Paramount’s legacy and market position.