Paramount Global unveiled its first-quarter financial results Thursday as controlling shareholder National Amusements, led by Shari Redstone, looks to close the sale of the Hollywood studio to David Ellison’s Skydance.
During the latest quarter to March 31, the company hit 79 million Paramount+ streaming subscribers worldwide, up 11 percent year-on-year and from 77.5 million Paramount+ customers at the end of its fourth quarter of 2024. The company added 1.5 million Paramount+ subscribers during the past three months, against 5.6 million brought on board during the fourth quarter of 2024.
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And the studio posted a streaming loss of $109 million for the first quarter, an improvement over a $286 million loss in the fourth quarter of 2024. Direct-to-consumer revenue rose 9 percent to $2.04 billion, as advertising revenue fell 9 percent to $473 million, while subscription revenue rose 16 percent to $1.57 billion, driven by growth from Pluto TV and Paramount+.
During a post-market analyst call, co-CEO Chris McCarthy in prepared remarks said the studio had its eyes on cutting operating costs as recessionary pressures threaten overall consumer spending. “We have not seen a meaningful impact due to the dynamic macro-environment. That said, looking forward, given the uncertainty, we are prioritizing key investments, while taking incremental steps to streamline non-content expenses.”
CFO Naveen Chopra added “growing macro-economic uncertainty, particularly in advertising, has the potential to impact our results later this year. To mitigate that impact, co-CEO Brian Robbins told analysts Paramount Pictures had reduced average production costs for tentpole movies by 35 percent over the last two years to “drive profitability.”
Paramount Global swung to a first quarter profit of $152 million, compared to a year-earlier net loss at $554 million. The studio’s overall fourth-quarter revenue fell to $7.19 billion, against a year-earlier $7.68 billion. That beat a Zacks consensus estimate for Paramount’s first quarter revenues to come in at $7.1 billion.
Company execs reiterated the studio “remains on track” to reach domestic profitability with Paramount+ for full-year 2025, as the streaming platform has hit TV series like Landman, Yellowjackets and Yellowstone. But much as the studio prizes its exclusive and sprawling overall deal with Taylor Sheridan, set to run to 2028, don’t expect Paramount Global to acquire 101 Studios, the production banner behind the Yellowstone creator.
“As it relates to 101 (Studios), they’re absolutely a preferred partner. We love working with them, and David (Glasser) and what he and his team have built. So much so that we have invested in them. But we do like the relationship we have. We think the incentives are based on where they should be,” co-CEO McCarthy told analysts as the studio continues to treat Sheridan and 101 Studios as separate entities.
McCarthy added Paramount was keen to allow Sheridan as a prolific TV hitmaker to maintain his creative control. “He’s a unique creative and we built a model that was uniquely around him, as opposed to forcing him through our structure,” he argued.
Elsewhere, overall TV media revenue fell 13 percent to $4.53 billion, as advertising revenue fell 21 percent to $2.03 billion, compared to the first quarter of 2024 when CBS broadcast Super Bowl LVIII. Excluding the Super Bowl broadcast, the company said TV media advertising was flat.
And filmed entertainment revenue rose 4 percent to $627 million, as lower theatrical revenue was offset by higher licensing revenue for recent theatrical releases in the home entertainment space. Paramount Pictures during the first quarter was supported by Q4 2024 holdovers like Sonic the Hedgehog 3 and Gladiator II, while Novocaine debuted during the most recent quarter.
Paramount has Tom Cruise’s Mission Impossible – The Final Reckoning set to hit theaters with a global release during its current second quarter. The studio has been teasing the eighth Mission Impossible film from Skydance as the “final” entry in the franchise, not least to boost audience interest.
The Skydance Media transaction is expected to be completed in the first half of 2025.
