PARA Q1 2025: Paramount+ Subs Reach 79M with 1.5M Adds, Revenue +16%
- Strong Subscriber Growth & Content Strategy: Paramount+ ended Q1 2025 with 79 million global subscribers and added 1.5 million new subscribers in the quarter. Furthermore, differentiated content—including high-performing original series like "Landman" and "1923"—drives increased revenue, with Paramount+ revenue up 16% YoY.
- Robust Financial Execution: The company generated $7.2 billion in total revenue and $123 million in free cash flow in Q1 2025, demonstrating operational efficiency and effective cost management, particularly in the DTC segment and broader business operations.
- Diverse Revenue Streams & Strategic Investments: With improvements in DTC profitability (despite some advertising headwinds) and initiatives driving digitally enhanced monetization, the company is well-positioned to benefit from both streaming and traditional media engagements, underpinning a confident outlook for 2025.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | -6% (declined from $7,685 million to $7,192 million) | Total Revenue declined by approximately 6% YoY mainly due to weaker traditional media performance, as the significant drop in the TV Media segment counteracted improvements from the Direct-to-Consumer segment. |
TV Media Segment Revenue | -13% (declined from $5,231 million to $4,538 million) | TV Media revenue fell by 13% YoY, reflecting challenges in legacy advertising and broadcasting; the loss of momentum from special events like the Super Bowl (which had boosted prior-year revenues) contributed to this decline. |
Direct-to-Consumer Revenue | +8.8% (increased from $1,879 million to $2,044 million) | Direct-to-Consumer revenue improved by roughly 8.8% YoY due to robust subscriber growth and enhanced subscription offerings, marking a shift towards digital and streaming services that helped counterbalance losses in traditional segments. |
Operating Income | Recovered from a loss of $417 million to a profit of $550 million | Operating Income rebounded dramatically, moving from a $417 million loss in Q1 2024 to a positive $550 million in Q1 2025, driven by the removal of prior-year one-time charges and restructuring costs along with operational efficiencies. |
Net Earnings from Continuing Operations | Recovered from a loss of $553 million to earnings of $161 million | Net Earnings from continuing operations improved significantly from a net loss of $553 million to earnings of $161 million YoY, primarily due to the absence of large programming charges and lower restructuring and transaction costs, which marked a turnaround in profitability. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Paramount+ Subscriber Growth | Q1 2025 | no prior guidance | Expected to continue but at a slower pace than Q4 2024 | no prior guidance |
Paramount+ ARPU Growth | Q1 2025 | no prior guidance | Expected to accelerate as the company fully laps the 2023 price increase and benefits from Q4 2024 subscriber additions | no prior guidance |
Adjusted OIBDA | Q1 2025 | no prior guidance | Expected to decline year-over-year in Q1 due to the absence of the Super Bowl and the cumulative impact of recent affiliate renewals | no prior guidance |
Free Cash Flow | Q1 2025 | no prior guidance | Expected to be lower year-over-year in Q1 due to approximately $150 million in cash restructuring payments and the absence of the Super Bowl | no prior guidance |
Free Cash Flow | FY 2025 | no prior guidance | Expected to increase year-over-year, even when including the impact of the Super Bowl and political advertising in 2024 | no prior guidance |
Adjusted OIBDA (Adjusted) | FY 2025 | no prior guidance | Expected to show strong growth when adjusted for the contribution of the Super Bowl and political advertising in 2024 | no prior guidance |
Adjusted OIBDA (Reported) | FY 2025 | no prior guidance | On a reported basis, full-year adjusted OIBDA is expected to be down slightly due to the absence of the Super Bowl and political advertising | no prior guidance |
Paramount+ Domestic Profitability | FY 2025 | no prior guidance | Expected to achieve full-year domestic profitability in 2025 | no prior guidance |
Affiliate and Subscription Revenue | FY 2025 | no prior guidance | The combination of traditional and streaming businesses is expected to yield net growth in total company affiliate and subscription revenue | no prior guidance |
Advertising Revenue | FY 2025 | no prior guidance | No explicit guidance was provided for total company advertising growth. However, strong engagement and momentum in D2C advertising (18% growth in 2024) were noted | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Free Cash Flow | Q1 2025 | Expected to be lower year-over-year due to ~$150M restructuring payments and absence of the Super Bowl | $123M, calculated as Net Cash from Operating Activities $180MMinus Capital Expenditures $57M, down from ~$209M in Q1 2024 ($260MMinus $51M) | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Subscriber Growth | Q4 2024: Strong additions with 5.6 million new subscribers and improved global watch time. Q3 2024: Added 3.5 million subscribers with a total of 72 million, driven by bundled deals and sports returns. Q2 2024: Noted challenges with a subscriber base of 68.4 million due to bundle exits. | Q1 2025: Reached 79 million global subscribers with an 11% year‐over‐year increase, higher watch time (+17%), and reduced churn. | Consistent growth with improved engagement metrics. |
Content Innovation and High-Profile Releases | Q4 2024: Mention of a strong content slate with big returning hits. Q3 2024: Detailed discussion of breakthrough originals, blockbuster film performances, and anticipated high-profile launches. Q2 2024: General focus on content investments and leveraging key assets. | Q1 2025: Emphasis on fewer, bigger breakthrough original series (e.g., “Landman,” “1923”) and international franchise expansion (e.g., Yellowstone) along with major film successes like “Sonic the Hedgehog 3”. | Ongoing commitment to innovation with a broadened slate and international franchise growth. |
DTC Profitability and Engagement | Q4 2024: Significant progress toward profitability with improved ad revenue and subscriber growth. Q3 2024: Achieved DTC profitability for two consecutive quarters and healthy revenue and ad metrics. Q2 2024: DTC segment profitable, though future quarters expected losses due to content spending. | Q1 2025: Improved DTC operating metrics with OIBDA improvement (loss reduced to $109M) and robust subscriber & engagement growth (improved watch time, reduced churn). | Steady progress with disciplined expense management; engagement remains strong despite residual losses. |
Financial Execution, Free Cash Flow & Operational Efficiency | Q4 2024: Strong adjusted OIBDA growth, reduced net leverage, and record free cash flow with significant restructuring payments. Q3 2024: Executed cost reductions, maintained positive free cash flow, and streamlined operations. Q2 2024: Emphasis on 43% OIBDA growth and positive free cash flow outlook. | Q1 2025: Focus on incremental cost efficiencies, improved OIBDA in DTC by $177M, and generated free cash flow of $123M despite restructuring spending. | Consistent focus on cost discipline and efficiency gains while managing restructuring costs. |
Advertising Revenue and Monetization Challenges | Q4 2024: D2C ad revenue up 18% and strong transition to digital platforms amidst linear pressures. Q3 2024: Robust digital ad growth with expectations to continue double-digit gains; noted challenges with underreported international revenue. Q2 2024: D2C ad revenue grew 16% but overall ad revenue declined 6% due to reduced sports inventory. | Q1 2025: TV media ad revenue flat (excluding Super Bowl) and D2C ad revenue declined 9% year-over-year; softness attributed to increased digital supply. | Persistent digital supply pressures continue to challenge monetization, indicating cautious sentiment despite digital growth. |
Traditional Revenue Decline (Affiliate and Cable Networks) | Q4 2024: Accelerating decline in affiliate revenues, with emphasis on sports bundles and skinny bundle experiments. Q3 2024: Affiliate revenue declined 6.6% YoY largely due to ecosystem trends and absence of Showtime events. Q2 2024: Affiliate revenue fell 5% YoY, impacted by ecosystem shifts and specific content exits. | Q1 2025: Affiliate revenue declined by 8.6% driven by ongoing pay-TV subscriber declines and deal impacts. | Continued decline in traditional channels as the market shifts to streaming; companies remain focused on cost management. |
Cost Reduction, Operational Streamlining & Restructuring Initiatives | Q4 2024: Emphasis on flat TV Media expenses through cost reductions and discussed full-year restructuring payments. Q3 2024: Announced $500 million in non‐content cost savings including a 15% reduction in the U.S. workforce. Q2 2024: Detailed plans for $500 million savings and workforce optimization, along with upcoming restructuring charges. | Q1 2025: Continued focus on streamlining non‐content expenses, with restructuring payments of $108 million contributing to improved cost efficiency. | Sustained execution of cost-saving measures and organizational streamlining remains a pillar for future profitability. |
Strategic Investments and Revenue Diversification | Q3 2024: Focused on investing in hit films and TV series, steering more content to internal platforms and pursuing strategic deals (e.g., Skydance transaction). Q2 2024: Discussions around strategic partnerships and optimizing the asset mix to boost revenue growth. | Q1 2025: Continued strategic investments highlighted via prioritized key content investments and diversified film slate (e.g., “Sonic 3,” “Gladiator 2”). | A long‑term focus on reinvesting in content and diversifying revenue streams to drive growth, with a clear strategic outlook. |
International Streaming Strategy and Profitability Challenges | Q2 2024: Focus on global footprint with strategic partnerships, including the exit from a non‑profitable hard bundle in South Korea. Q3 2024: Recognized that international profitability trails domestic by 12–18 months due to market maturity differences. | Q1 2025: Emphasis on leveraging international franchises (e.g., Yellowstone expansion) and bundling strategies to drive growth, while continuing to face profitability challenges outside the U.S.. | Continued efforts to expand internationally with franchise-driven growth, though challenges remain in achieving parity with domestic profitability. |
Measurement Disputes and Data Reliability (Nielsen Dispute) | Q3 2024: Actively discussed the ongoing dispute with Nielsen with partners leaning into alternative measurement solutions; reassurance that ad revenue was not materially affected. | Q1 2025: This topic was not mentioned. | Discussion has de‑emphasized in the current period, possibly indicating resolution or lower priority. |
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TV Media & Guidance
Q: What drove strong TV media and free cash flow outlook?
A: Management highlighted that solid performance from CBS and live sports drove TV media revenue beyond expectations, setting an optimistic tone for Q2 despite lighter sports inventory; while full-year free cash flow guidance remains consistent, they noted some uncertainty due to the dynamic macro environment. -
Streaming Growth
Q: How will streaming offset linear declines?
A: Management explained that robust streaming growth, driven by continued subscriber increases, improved ARPU, and lower churn, is expected to more than compensate for linear declines arising from broader pay-TV subscriber losses. -
Digital & Affiliate Advertising
Q: What are the prospects for ads and FCC impact?
A: Management mentioned that although digital advertising faces short-term supply pressures, they anticipate stabilization over time, and stressed their strong, mutually beneficial partnerships with affiliates, which should mitigate potential FCC-related reverse compensation concerns. -
Bundling & Joint Ventures
Q: What is the view on bundling opportunities?
A: Management noted they remain opportunistic about bundling and joint ventures, favoring incremental audience strategies that complement their strong, hit-driven content without compromising the value of their core assets. -
Licensing Strategy
Q: Should content be licensed broadly versus held for exclusivity?
A: The team emphasized that while licensing—especially on secondary markets—is a profitable growth avenue, they prefer to use their most valuable IP to boost their own platform performance, balancing between co-exclusive releases and direct ownership. -
Creative Partnerships
Q: Is acquiring 101 Studios preferable for integration?
A: Management reaffirmed the value of their creative partnerships, explaining that the current relationship with Taylor Sheridan and preferred partner 101 Studios is structured to yield strong content hits, and they see no need to change this successful model.
Research analysts covering Paramount Global.