Observed Signal · Feb 25, 2026 · Earnings Report · Source: State of Streaming · Impact: 4/5 · Sentiment: Positive
Skydance to Acquire Paramount as Streaming Turns Profitable
Paramount Global reported that its direct-to-consumer division (Paramount+ and Pluto TV) generated a $157 million profit in Q2 on $2.2 billion of revenue (up 15%), marking the business's first streaming profit milestone. The result came alongside a net loss of 1.3 million Paramount+ subscribers, which the company attributed to an expiring international bundle, leaving the service just under 78 million global subscribers. The report was delivered as Paramount prepares to be acquired by Skydance Media in an $8.4 billion deal expected to close on August 7, 2026; the planned transition has already prompted leadership departures (co-CEO Chris McCarthy and Chief Content Licensing Officer Dan Cohen). Regulatory concessions tied to the takeover (including a CBS News ombudsman) and new content deals (a five-year streaming agreement for South Park) were also noted.
A major media owner reported its streaming business reached profitability while undergoing an $8.4B acquisition — this affects streaming inventory, consolidation dynamics, leadership and regulatory conditions relevant to advertising and CTV monetization.
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Key Takeaways & Evidence Grounding
- Paramount Global's direct-to-consumer division posted a $157 million profit in Q2.
- Streaming revenue for the division rose 15% to $2.2 billion in the quarter.
- Paramount+ experienced a net loss of 1.3 million subscribers and stands just under 78 million global subscribers.
- Skydance Media is set to acquire Paramount Global for $8.4 billion, with a planned close date of 2026-08-07.
- Co-CEO Chris McCarthy and Chief Content Licensing Officer Dan Cohen are confirmed to depart ahead of the Skydance transition.
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Paramount+ Adds 2M Subscribers; Q2 Revenue $6.9B
Paramount Skydance Corporation reported second-quarter 2026 results showing continued streaming growth after the Skydance merger. Paramount+ added 2 million subscribers to reach 81.6 million worldwide, with average revenue per user up roughly 12% year-over-year; direct-to-consumer revenue rose to $2.5 billion and DTC adjusted EBITDA grew to $366 million (14.8% margin). Company-wide revenue was $6.9 billion (up ~1%), while adjusted EBITDA increased 27% to $1.1 billion. Studios revenue improved and swung to positive adjusted EBITDA; television media revenue declined due to softer advertising and affiliate fees but margins strengthened through cost controls. Management raised a $2.7 billion enterprise efficiency target, guided full-year 2026 revenue to about $30 billion with adjusted EBITDA of $3.8–$3.9 billion, and reported regulatory clearances in 65 jurisdictions for the proposed Warner Bros. Discovery acquisition, expected by end of Q3 2026 subject to remaining conditions.
Paramount Skydance Prioritizes Streaming Growth Amid M&A Talks
Paramount Skydance said it is prioritizing streaming revenue growth following the merger of Paramount Global and Skydance Media. During its earnings call the company reported 10% year-over-year growth in direct-to-consumer (DTC) revenue last quarter and overall Q4 revenue up 2% to $8.15 billion. Management expects full-year revenue of about $30 billion (roughly 4% YOY growth), with DTC as the primary driver. Paramount+ grew 17% YOY and the service has 79 million subscribers, while non-Paramount+ revenue fell 16%, primarily due to Pluto. Executives said they plan price increases, investments in ad tech and programming (including expanded live sports rights such as the UFC) to raise ARPU and DTC ad revenue, and to restructure how ad inventory is sold. The company also disclosed a revised $31-per-share, all-cash bid for Warner Bros. Discovery but declined Q&A on the pursuit.
Paramount Skydance Focuses on Streaming Revenue Growth
Paramount Skydance told investors during its earnings call that direct-to-consumer (DTC) streaming revenue is the primary growth driver as the company pursues a proposed acquisition of Warner Bros. Discovery. The merged company reported $8.15 billion in Q4 revenue (2% year‑over‑year) and said DTC revenue grew 10% YOY in the prior quarter. Management expects total revenue of $30 billion for the year (about 4% YOY growth), with improved ARPU from planned price increases and accelerating subscriber growth. Paramount+ generated 17% YOY revenue growth last quarter and has 79 million subscribers; non‑Paramount+ revenue fell 16%, driven mainly by Pluto. Executives (CEO David Ellison and CFO Dennis Cinelli) said they will invest in ad tech, programming (including live sports/UFC), and ad sales practices to boost DTC ad revenue and moderate declines in linear TV ad sales.
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