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Paramount Global (PARA)·Q2 2025 Earnings Summary

Executive Summary

  • Total revenue grew 1% year over year to $6.849B, with adjusted OIBDA of $824M (-5% YoY) and adjusted diluted EPS of $0.46 (-15% YoY); GAAP diluted EPS was $0.08 .
  • Direct-to-Consumer (DTC) accelerated: revenue +15% YoY to $2.160B; Paramount+ revenue +23% YoY, subscription revenue +22% YoY; Paramount+ ended Q2 with 77.7M subs, ARPU +9% YoY, watch time per sub +11% YoY, churn improved 70 bps to a record low .
  • TV Media softness continued: revenue -6% YoY, advertising -4%, affiliate/subscription -7%; total company affiliate & subscription revenue accelerated to +5% YoY on streaming strength .
  • Filmed Entertainment revenue +2% YoY; theatrical +84% on Mission: Impossible – The Final Reckoning’s biggest global opening in franchise history, though segment adjusted OIBDA was -$84M on lower licensing profit .
  • Skydance transaction expected to close Aug 7, 2025; management refrained from formal guidance given imminent deal closing—a key near-term stock catalyst alongside Paramount+ traction and franchise film performance .

What Went Well and What Went Wrong

What Went Well

  • Paramount+ engagement and retention metrics improved: “For the 3rd consecutive quarter, watch time per subscriber increased… up 11% in Q2; churn improved 70 bps, achieving a record low” .
  • Streaming-first transition: “DTC revenue growth outpaced linear declines… strong subscription growth at Paramount+ drove total company affiliate & subscription revenue growth, which accelerated to 5%” .
  • Franchise execution: Mission: Impossible – The Final Reckoning delivered “the biggest global opening in franchise history,” lifting the library on Paramount+ (60% lift in daily active subscriber households for the franchise library post-release) .

What Went Wrong

  • Linear pressure persisted: TV Media revenue -6% YoY; advertising -4% as viewership declines offset higher CPMs; affiliate/subscription -7% due to linear subscriber trends .
  • DTC ad headwinds: DTC advertising -4% YoY amid increased Connected TV supply and lower CPMs (despite strong subscription momentum) .
  • Filmed Entertainment profitability: segment adjusted OIBDA fell to -$84M (from -$54M), primarily due to lower licensing profits despite theatrical strength .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$7.984 $7.192 $6.849
GAAP Diluted EPS (Continuing Ops)-$0.33 $0.22 $0.08
Adjusted Diluted EPS (Continuing Ops)-$0.11 $0.29 $0.46
Operating Income ($USD Millions)$129 $550 $399
Operating Margin (%)1.6% 7.6% 5.8%
Net Income Attributable to Paramount ($USD Millions)-$224 $152 $57
Net Income Margin (%)-2.8% 2.1% 0.8%
Adjusted OIBDA ($USD Millions)$406 $688 $824
SegmentQ4 2024 Revenue ($MM)Q1 2025 Revenue ($MM)Q2 2025 Revenue ($MM)Q4 2024 Adj OIBDA ($MM)Q1 2025 Adj OIBDA ($MM)Q2 2025 Adj OIBDA ($MM)
TV Media4,979 4,538 4,011 949 922 863
Direct-to-Consumer2,013 2,044 2,160 -286 -109 157
Filmed Entertainment1,081 627 690 -42 20 -84
KPIQ4 2024Q1 2025Q2 2025
Paramount+ Subscribers (Millions)77.5 79.0 77.7
Paramount+ ARPU YoY Change (%)+1% +2% +9%
Watch Time per User YoY (%)+22% +17% +11%
Churn YoY Change (bps)—-130 bps -70 bps
DTC Subscription Revenue YoY (%)+7% +16% +22%
DTC Advertising Revenue YoY (%)+9% -9% -4%
Free Cash Flow ($USD Millions)$56 $123 $114
Net Operating Cash Flow ($USD Millions)$168 $180 $159
Total Company Affiliate & Subscription Revenue YoY (%)—+1% +5%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Full-year 2025 company outlookFY 2025Not providedManagement refrained from outlining FY expectations due to imminent Skydance closing Not provided
Paramount+ domestic profitabilityFY 2025“Remains on track to reach domestic profitability for 2025” (Q1 commentary) Not reiterated formally in Q2 given deal closing; continued confidence in streaming-first positioning Maintained qualitatively
Upfront volume (TV Media)2026 upfront—“Will remain overall volume consistent with last year; streaming ~30% of total volume; sports demand double-digit growth” Informational update
DividendsFY 2025—No guidance; YTD common dividends paid $70M (cash flow disclosure) Not provided

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
Streaming-first transition & profitability2024 DTC profitability improved ~$1.2B; Paramount+ #2 domestic SVOD originals hours; subs +10M in FY24 DTC revenue +15% YoY; adjusted OIBDA $157M (+$131M YoY); Paramount+ engagement and churn continue to improve Positive momentum
Linear TV headwindsQ4: TV Media revenue -4% YoY; affiliate/subscription -7% TV Media revenue -6% YoY; ad -4%; affiliate/subscription -7% Ongoing pressure
Sports as anchor for ad demandQ1: strong sports audiences (AFC Championship record; streaming up ~60%) Upfront near completion with strong sports demand; golf coverage +13% YoY; Final Four most watched in 8 years Supportive
Content franchises cross-platform flywheelQ1: Sonic 3 drove streaming/home entertainment; Gladiator II top-viewed on Paramount+ Mission: Impossible record opening; 60% lift in franchise library viewing on Paramount+ post-release Strengthening
Corporate/transactionQ4/Q1: Skydance transactions expected to close in H1 2025 Anticipated closing Aug 7, 2025; no Q&A; limited guidance Imminent closing

Management Commentary

  • “Our strategy isn’t about the volume of originals, rather it’s about the volume of original hits” — Chris McCarthy, Co-CEO .
  • “Strong subscription growth at Paramount+ drove total company affiliate & subscription revenue growth, which accelerated to 5%” — Chris McCarthy .
  • “Paramount+ finished the quarter with 77.7 million subscribers… ARPU growth accelerated to +9% YoY… revenue increased nearly $330 million vs Q2 2024” — Andy Warren, Interim CFO .
  • “This will be our last earnings call… we will not be taking questions” — IR/Management (due to Skydance closing) .
  • Shari Redstone: “We are already a top four global SVOD service and we will be profitable in the U.S. faster than many of our peers” .

Q&A Highlights

  • No Q&A held due to the impending Skydance transaction closing; the call delivered prepared remarks only .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for Q2 2025 EPS and revenue was unavailable via our SPGI feed for PARA at this time; as a result, we cannot characterize this quarter as a beat or miss versus SPGI consensus and recommend updating mapping before post-mortem. Values retrieved from S&P Global were unavailable due to missing CIQ mapping.*
  • Given operational outcomes (DTC acceleration, Paramount+ engagement/churn improvement, affiliate/subscription +5% YoY), we anticipate sell-side models may adjust streaming profitability trajectories upward, while maintaining caution on linear declines and DTC advertising softness .

Key Takeaways for Investors

  • Streaming-led mix shift is working: Paramount+ subscription momentum and improving churn/engagement underpin DTC profitability expansion; this is the principal narrative driver near term .
  • Linear drag persists but is manageable: TV Media declines continue; however, combined affiliate/subscription revenue growth (+5% YoY) demonstrates streaming increasingly offsets linear pressures .
  • Franchises are monetizing across windows: Mission: Impossible’s record opening and ensuing Paramount+ library lift exemplify the cross-platform flywheel; expect similar benefits from upcoming slate (Dexter: Resurrection, NCIS Tony & Ziva, Sheridan titles) .
  • Cash generation improving: Q2 free cash flow of $114M (vs $10M LY) despite restructuring payments indicates progress on cost actions and operating execution .
  • Corporate catalyst: Skydance closing (Aug 7) and new leadership/board could reset strategic priorities; near-term guidance is limited until post-close .
  • Advertising mix evolution: Upfront commentary signals stable overall volume, with streaming ~30% and strong sports demand; expect ad dollars to shift further to streaming inventory .
  • Risk factors: DTC ad pricing pressure (lower CPMs/increased CTV supply), linear subscriber declines, and integration uncertainty post-transaction remain key watch items .

Additional Relevant Press Releases (Q2 2025)

  • South Park licensing extension: Paramount+ becomes U.S. home for the South Park library and new episodes, supporting acquisition and engagement drivers for streaming .
  • Distribution: Mediacom renewal includes Paramount+ Premium availability to qualifying customers, expanding reach and bundling opportunities .
  • Transaction timing: Paramount and Skydance announced anticipated closing date and election deadlines (Aug 7) .

Bolded notable surprises:

  • Mission: Impossible – The Final Reckoning achieved the franchise’s biggest global opening, driving a 60% lift in Paramount+ franchise library viewing. Strong cross-platform monetization.
  • Paramount+ churn at a record low with improved watch time per subscriber, underpinning subscription ARPU growth.