Core Insights - Paramount Global's co-CEO Chris McCarthy emphasized the company's strategic partnership with Taylor Sheridan's 101 Studios, highlighting that they are not seeking to acquire the studio but value the existing relationship [1][2][4] - The partnership with Sheridan has proven successful, with Paramount holding an exclusive agreement with him until 2028 and owning all intellectual property (IP) generated from their collaboration [3] - Paramount has implemented new creative models inspired by Sheridan's work, which have been effective in attracting new talent, such as Jez Butterworth, leading to successful projects like The Agency and MobLand [5] Financial Performance - Paramount reported solid quarterly earnings but is focusing on cash conservation amid a challenging macroeconomic environment, alongside significant cost reductions in preparation for a merger with Skydance [6] - The average production cost of Paramount Pictures' films has been reduced by 35% over the past 24 months, indicating a strategic shift towards more efficient production practices [6] Future Outlook - The company anticipates that its sale to Skydance will be finalized in the first half of the year, pending FCC approval [7]

Financial Data and Key Metrics Changes - Total company revenue grew 2% year over year, excluding the Super Bowl, reaching $7.2 billion [6][22] - Direct to Consumer (D2C) revenue increased by 9% year over year to $2 billion, with subscription revenue growing 16% [23] - Adjusted OIBDA improved to $688 million, reflecting year-over-year improvements in D2C and filmed entertainment [22][24] - Free cash flow was $123 million, including $108 million in restructuring payments [22] Business Line Data and Key Metrics Changes - D2C OIBDA improved by nearly $180 million year over year, with a loss of $109 million [6][23] - Filmed Entertainment revenue was $627 million, up 4% year over year, with OIBDA of $20 million compared to a loss of $3 million in the previous year [24][25] - TV Media advertising revenue, excluding the Super Bowl, was flat year over year, with OIBDA at $922 million [24] Market Data and Key Metrics Changes - Paramount Plus ended the quarter with 79 million global subscribers, an increase of 11 million year over year [7] - Global watch time per user on Paramount Plus increased by 17% year over year, and churn improved by 130 basis points [7] - CBS's network audience grew 3% in the quarter compared to last year, with a 12% increase without the Super Bowl comparison [17] Company Strategy and Development Direction - The company is focusing on driving profitable growth through a differentiated content strategy, emphasizing fewer but bigger original series [7][10] - Paramount is prioritizing key investments while streamlining non-content expenses in response to macroeconomic uncertainties [6][28] - The company plans to achieve domestic profitability for Paramount Plus in 2025, leveraging improvements in churn and ARPU [26][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite macroeconomic uncertainties, noting strong engagement and content-driven growth [6][28] - The company anticipates that supply-demand dynamics in digital advertising will stabilize over time, leading to improved monetization [30][34] - Management highlighted the importance of maintaining strong relationships with affiliates and securing valuable content partnerships [36] Other Important Information - The company is set to premiere several new series and franchise expansions, including new installments of Yellowstone and Dexter [10][11] - Pluto TV achieved its highest consumption ever, with global viewing time up 26% year over year, although monetization has been softer than expected [12] Q&A Session Summary Question: Advertising pressure on Pluto and digital advertising - Management acknowledged the impact of increased supply in digital advertising but expressed confidence that supply-demand dynamics will balance out over time [30][33] Question: Licensing strategy for library content versus original content - Management indicated that content licensing remains a growth area, but the focus will be on using valuable IP to enhance owned and operated assets [39][40] Question: Expectations for linear declines and streaming growth - Management noted that subscriber declines in linear TV are expected to continue, while streaming growth will be driven by subscriber growth, churn improvements, and ARPU [46][48] Question: Importance of Taylor Sheridan and potential acquisitions - Management emphasized the value of the partnership with Taylor Sheridan and the current model as optimal for maximizing value without pursuing acquisitions [52][54] Question: Interest in bundling and joint ventures - Management expressed openness to exploring bundling opportunities and partnerships but emphasized a disciplined approach to ensure value creation [60][62] Question: Current linear trends and guidance for full year OIBDA and free cash flow - Management reiterated that the fundamental drivers of earnings improvement remain in place, despite macroeconomic uncertainties impacting advertising revenue [70][71]

Financial Data and Key Metrics Changes - Total company revenue grew 2% year over year, excluding the Super Bowl, reaching $7.2 billion [5][19] - Direct to Consumer (D2C) revenue increased by 9% year over year to $2 billion, with subscription revenue growing 16% [20] - Adjusted OIBDA improved to $688 million, reflecting year-over-year improvements in D2C and filmed entertainment [19][20] - Free cash flow was $123 million, including $108 million in restructuring payments [19] Business Line Data and Key Metrics Changes - D2C OIBDA improved by nearly $180 million year over year, with a loss of $109 million [5][20] - TV Media advertising revenue, excluding the Super Bowl, was flat year over year, with OIBDA at $922 million [21] - Filmed Entertainment revenue increased by 4% year over year to $627 million, with OIBDA of $20 million compared to a loss of $3 million in the previous year [22] Market Data and Key Metrics Changes - Paramount Plus ended the quarter with 79 million global subscribers, up 11 million year over year, including 1.5 million new subscribers in the quarter [6] - Global watch time per user on Paramount Plus increased by 17% year over year, and churn improved by 130 basis points [6] - Pluto TV's global viewing time increased by 26% year over year, although monetization was softer than expected [11] Company Strategy and Development Direction - The company is prioritizing key investments while streamlining non-content expenses due to macroeconomic uncertainties [5] - A differentiated content strategy focusing on fewer, bigger breakthrough original series is driving growth, with Paramount Plus having 25% of the top 10 SVOD originals [7] - The company plans to achieve domestic profitability for Paramount Plus in 2025 and is focused on leveraging its content library and iconic IP [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite macroeconomic challenges, emphasizing strong engagement and content-driven growth [5][26] - The company anticipates that supply-demand dynamics in digital advertising will stabilize over time, leading to improved monetization [11][31] - Management acknowledged potential impacts from macroeconomic uncertainties, particularly in advertising, but remains focused on expense management and strategic investments [26][67] Other Important Information - The company is expanding the Yellowstone franchise with three new series set to premiere in the coming quarters [8] - The success of Sonic the Hedgehog 3 contributed significantly to the Filmed Entertainment segment's performance [22] - The company is on track to close a pending transaction with Skydance in the first half of the year [19] Q&A Session Summary Question: Advertising pressure on Pluto and digital advertising - Management acknowledged the impact of new entrants in the digital supply space but expects supply-demand dynamics to balance out over time [31] Question: FCC's potential impact on affiliate revenue - Management emphasized the mutually beneficial relationship with affiliates and expressed confidence in securing partnerships despite potential regulatory changes [34] Question: Licensing strategy for library content versus original content - Management views content licensing as a growth business but believes in using valuable IP to grow owned assets while still considering selective licensing opportunities [38] Question: Expectations for linear declines and streaming growth - Management indicated that subscriber declines in linear TV are expected to continue, while streaming growth is driven by subscriber growth, churn improvements, and ARPU [46][47] Question: Current relationship with Taylor Sheridan and potential acquisition of 101 Studios - Management expressed satisfaction with the current partnership with Taylor Sheridan and indicated no plans to acquire 101 Studios, preferring to maintain the existing relationship [51][54] Question: Interest in bundling and joint ventures - Management is open to exploring bundling opportunities but emphasizes a disciplined approach to ensure value and audience growth [60] Question: Upside in TV media performance - Management attributed the strong performance to CBS's broadcast slate and sports, which helped offset softness in the digital landscape [65]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements%2E) Presents Paramount Global's unaudited consolidated financial statements for Q1 2025 and 2024, including operations, balance sheets, cash flows, and detailed notes [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations (in millions, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $7,192 | $7,685 | | Operating income (loss) | $550 | $(417) | | Net earnings (loss) attributable to Paramount | $152 | $(554) | | Basic net earnings (loss) per common share attributable to Paramount | $0.23 | $(0.87) | | Diluted net earnings (loss) per common share attributable to Paramount | $0.22 | $(0.87) | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income (in millions) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net earnings (loss) (Paramount and noncontrolling interests) | $161 | $(544) | | Other comprehensive income (loss), net of tax (Paramount and noncontrolling interests) | $84 | $(59) | | Comprehensive income (loss) attributable to Paramount | $235 | $(613) | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (in millions) | Metric | At March 31, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $45,396 | $46,172 | | Total Liabilities | $28,468 | $29,390 | | Total Equity | $16,928 | $16,782 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in millions) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash flow provided by operating activities | $180 | $260 | | Net cash flow used for investing activities | $(69) | $(128) | | Net cash flow used for financing activities | $(139) | $(187) | | Net increase (decrease) in cash and cash equivalents | $12 | $(76) | [Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total Paramount Stockholders' Equity (in millions) | Metric | At March 31, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | Total Paramount stockholders' equity | $16,538 | $16,320 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28Unaudited%29) [Note 1) Basis of Presentation](index=10&type=section&id=1%29%20BASIS%20OF%20PRESENTATION) - Paramount Global is a global media, streaming, and entertainment company with segments including TV Media, Direct-to-Consumer, and Filmed Entertainment[23](index=23&type=chunk)[26](index=26&type=chunk) - Paramount entered into a transaction agreement with Skydance Media, LLC on July 7, 2024, to become subsidiaries of a new holding company, New Paramount, expected to close in the first half of 2025[24](index=24&type=chunk)[30](index=30&type=chunk) - The Skydance Transactions involve an investment of up to **$6.0 billion** into New Paramount by NAI Equity Investors and a cash-stock election for existing Paramount stockholders[25](index=25&type=chunk)[28](index=28&type=chunk) Weighted Average Shares for EPS Calculation (in millions) | (in millions) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Weighted average shares for basic EPS | 672 | 654 | | Dilutive effect of shares issuable under stock-based compensation plans | 6 | — | | Weighted average shares for diluted EPS | 678 | 654 | - New accounting guidance for income tax disclosures is effective for the year ended December 31, 2025, and for disaggregation of income statement expenses for the year ended December 31, 2027[45](index=45&type=chunk)[46](index=46&type=chunk) [Note 2) Programming and Other Inventory](index=14&type=section&id=2%29%20PROGRAMMING%20AND%20OTHER%20INVENTORY) Programming and Other Inventory (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Film Group Monetization | $12,049 | $12,307 | | Individual Monetization | $2,914 | $2,918 | | Home entertainment | $22 | $26 | | **Total programming and other inventory** | **$15,086** | **$15,353** | | Less current portion | $1,054 | $1,429 | | **Total noncurrent programming and other inventory** | **$14,032** | **$13,924** | Amortization of Programming and Production Costs (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Acquired program rights | $1,511 | $1,782 | | Internally-produced television and film programming, and acquired libraries: Individual monetization | $369 | $298 | | Internally-produced television and film programming, and acquired libraries: Film group monetization | $1,299 | $1,060 | - During Q1 2024, Paramount recorded **$1.12 billion** in programming charges due to a shift in content strategy, resulting in content removal, project abandonment, and contract terminations. These charges included **$909 million** for content impairment and **$209 million** for development cost write-offs and contract termination costs[52](index=52&type=chunk) [Note 3) Restructuring and Transaction-Related Items](index=15&type=section&id=3%29%20RESTRUCTURING%20AND%20TRANSACTION-RELATED%20ITEMS) Restructuring and Transaction-Related Items (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Severance | $— | $155 | | Exit costs | $65 | $31 | | Restructuring charges | $65 | $186 | | Transaction-related items | $20 | $— | | **Total Restructuring and transaction-related items** | **$85** | **$186** | - Restructuring charges in Q1 2025 and Q1 2024 were primarily for lease asset impairment (**$65 million** and **$31 million**, respectively) due to real estate footprint reduction. Q1 2024 also included **$155 million** in severance costs from global workforce strategic changes[55](index=55&type=chunk)[56](index=56&type=chunk) - Transaction-related items in Q1 2025 included **$20 million** in legal, advisory, and professional fees related to the Skydance Transactions[58](index=58&type=chunk) [Note 4) Related Parties](index=16&type=section&id=4%29%20RELATED%20PARTIES) - National Amusements, Inc. (NAI) is the controlling stockholder, owning approximately **77.4%** of Class A Common Stock and **9.4%** of combined Class A and B Common Stock as of March 31, 2025[60](index=60&type=chunk) - NAI approved the Skydance Transaction Agreement via written consent on July 7, 2024, and agreed to vote its shares in favor of related matters[61](index=61&type=chunk) Related Party Transactions with Equity Method Investees (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $69 | $58 | | Operating costs | $24 | $18 | [Note 5) Revenues](index=17&type=section&id=5%29%20REVENUES) Revenues by Type (in millions) | Revenue Type | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Advertising | $2,513 | $3,096 | | Affiliate and subscription | $3,397 | $3,357 | | Theatrical | $148 | $153 | | Licensing and other | $1,134 | $1,079 | | **Total Revenues** | **$7,192** | **$7,685** | - Unrecognized revenues from long-term contracts totaled approximately **$6 billion** at March 31, 2025, with **$2 billion** expected in the remainder of 2025, **$2 billion** in 2026, and **$1 billion** in 2027 and thereafter[72](index=72&type=chunk) - Revenues of **$0.2 billion** (2025) and **$0.1 billion** (2024) were recognized from content licensing and theatrical distribution where performance obligations were satisfied in prior periods[75](index=75&type=chunk) [Note 6) Debt](index=18&type=section&id=6%29%20DEBT) Total Debt (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt | $14,507 | $14,501 | | Less current portion | $346 | $— | | **Total long-term debt, net of current portion** | **$14,161** | **$14,501** | - Paramount had a **$3.50 billion** revolving credit facility maturing in January 2027, with no outstanding borrowings as of March 31, 2025[79](index=79&type=chunk) - The Credit Facility's maximum Consolidated Total Leverage Ratio was **5.5x** for Q1 2025 and will decrease to **4.5x** by Q1 2026. Amendments effective upon closing of the Skydance Transactions will increase the cash netting limit to **$3.0 billion**[80](index=80&type=chunk)[81](index=81&type=chunk) [Note 7) Financial Instruments and Fair Value Measurements](index=19&type=section&id=7%29%20FINANCIAL%20INSTRUMENTS%20AND%20FAIR%20VALUE%20MEASUREMENTS) - The fair value of outstanding notes and debentures was **$13.5 billion** at March 31, 2025, compared to a carrying value of **$14.51 billion**[83](index=83&type=chunk) - Paramount uses derivative financial instruments, primarily foreign currency forward contracts, to manage exposure to foreign currency exchange rates, with notional amounts of **$3.23 billion** at March 31, 2025[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) Assets and Liabilities Measured at Fair Value (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets: Foreign currency hedges | $41 | $45 | | Liabilities: Deferred compensation | $315 | $385 | | Liabilities: Foreign currency hedges | $41 | $48 | [Note 8) Variable Interest Entities](index=21&type=section&id=8%29%20VARIABLE%20INTEREST%20ENTITIES) - Paramount consolidates Variable Interest Entities (VIEs) where it has the power to direct significant activities and the obligation to absorb losses or right to receive benefits[93](index=93&type=chunk) Consolidated VIEs Financial Information (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $1,860 | $1,825 | | Total liabilities | $209 | $198 | | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $125 | $137 | | Operating loss | $(47) | $(34) | [Note 9) Stockholders' Equity](index=22&type=section&id=9%29%20STOCKHOLDERS%27%20EQUITY) - All outstanding Mandatory Convertible Preferred Stock was automatically converted into Class B Common Stock on April 1, 2024, resulting in the issuance of **11.5 million** shares of Class B Common Stock[97](index=97&type=chunk) Dividends Declared (in millions, except per share amounts) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Class A and Class B Common Stock: Dividends declared per common share | $0.05 | $0.05 | | Class A and Class B Common Stock: Total common stock dividends | $35 | $35 | | Mandatory Convertible Preferred Stock: Dividends declared per preferred share | n/a | $1.4375 | | Mandatory Convertible Preferred Stock: Total preferred stock dividends | n/a | $14 | Changes in Accumulated Other Comprehensive Loss (in millions) | Component | At December 31, 2024 | Other comprehensive income | At March 31, 2025 | | :--- | :--- | :--- | :--- | | Cumulative Translation Adjustments | $(657) | $73 | $(584) | | Net Actuarial Loss and Prior Service Cost | $(947) | $10 | $(937) | | **Accumulated Other Comprehensive Loss** | **$(1,604)** | **$83** | **$(1,521)** | | Component | At December 31, 2023 | Other comprehensive loss | At March 31, 2024 | | :--- | :--- | :--- | :--- | | Cumulative Translation Adjustments | $(504) | $(68) | $(572) | | Net Actuarial Loss and Prior Service Cost | $(1,052) | $9 | $(1,043) | | **Accumulated Other Comprehensive Loss** | **$(1,556)** | **$(59)** | **$(1,615)** | [Note 10) Income Taxes](index=23&type=section&id=10%29%20INCOME%20TAXES) - For Q1 2025, Paramount recorded a **$100 million** income tax provision with an effective tax rate of **29.9%**, including a **2.0 percentage point** increase from items affecting comparability[104](index=104&type=chunk) - For Q1 2024, Paramount recorded a **$172 million** income tax benefit with an effective tax rate of **27.1%**, including a **5.0 percentage point** increase from items affecting comparability, primarily programming charges[105](index=105&type=chunk) Impact from Items Affecting Comparability on Income Taxes (in millions) | Item (March 31, 2025) | Benefit from Earnings (Loss) Before Income Taxes | (Provision for) Income Taxes | | :--- | :--- | :--- | | Restructuring charges | $(65) | $16 | | Transaction-related items | $(20) | $— | | Gain from dispositions | $35 | $(2) | | Net discrete tax provision | n/a | $(7) | | Item (March 31, 2024) | Benefit from Earnings (Loss) Before Income Taxes | (Provision for) Income Taxes | | :--- | :--- | :--- | | Programming charges | $(1,118) | $275 | | Restructuring charges | $(186) | $46 | | Loss from investment | $(4) | $1 | | Net discrete tax provision | n/a | $(1) | [Note 11) Pension and Other Postretirement Benefits](index=24&type=section&id=11%29%20PENSION%20AND%20OTHER%20POSTRETIREMENT%20BENEFITS) Components of Net Periodic Cost (in millions) | Component | Pension Benefits (2025) | Pension Benefits (2024) | Postretirement Benefits (2025) | Postretirement Benefits (2024) | | :--- | :--- | :--- | :--- | :--- | | Interest cost | $50 | $49 | $2 | $2 | | Expected return on plan assets | $(32) | $(34) | $— | $— | | Amortization of actuarial loss (gain) | $18 | $20 | $(4) | $(4) | | **Net periodic cost** | **$36** | **$35** | **$(2)** | **$(2)** | [Note 12) Segment Information](index=25&type=section&id=12%29%20SEGMENT%20INFORMATION) - Paramount's reportable segments are TV Media, Direct-to-Consumer, and Filmed Entertainment, with Adjusted OIBDA used as the primary measure of profit and loss[111](index=111&type=chunk)[210](index=210&type=chunk)[212](index=212&type=chunk) Total Revenues by Segment (in millions) | Segment | 2025 Revenues | % of Total | 2024 Revenues | % of Total | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TV Media | $4,538 | 63 % | $5,231 | 68 % | $(693) | (13)% | | Direct-to-Consumer | $2,044 | 28 | $1,879 | 24 | $165 | 9 | | Filmed Entertainment | $627 | 9 | $605 | 8 | $22 | 4 | | Eliminations | $(17) | — | $(30) | — | $13 | 43 | | **Total Revenues** | **$7,192** | **100 %** | **$7,685** | **100 %** | **$(493)** | **(6)%** | Adjusted OIBDA by Segment (in millions) | Segment | 2025 Adjusted OIBDA | 2024 Adjusted OIBDA | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | TV Media | $922 | $1,445 | $(523) | (36)% | | Direct-to-Consumer | $(109) | $(286) | $177 | 62 | | Filmed Entertainment | $20 | $(3) | $23 | n/m | | Corporate/Eliminations | $(101) | $(124) | $23 | 19 | | Stock-based compensation | $(44) | $(45) | $1 | 2 | | **Total Adjusted OIBDA** | **$688** | **$987** | **$(299)** | **(30)%** | [Note 13) Commitments and Contingencies](index=28&type=section&id=13%29%20COMMITMENTS%20AND%20CONTINGENCIES) - Paramount had **$1.97 billion** in outstanding letters of credit and surety bonds at March 31, 2025, including **$1.75 billion** under a standby letter of credit facility[118](index=118&type=chunk) - The company is a defendant in approximately **17,720** pending asbestos claims as of March 31, 2025, down from **18,310** at December 31, 2024. Total costs for settlement and defense of asbestos claims (net of insurance and tax) were **$34 million** in 2024 and **$54 million** in 2023[136](index=136&type=chunk) - Paramount is involved in multiple lawsuits related to the Skydance Transactions, including class action lawsuits alleging breaches of fiduciary duties and requests for inspection of books and records[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - A legal dispute with Sony Pictures Television Inc. regarding distribution rights for 'Wheel of Fortune' and 'Jeopardy!' is ongoing, with Paramount appealing a court ruling that declined a preliminary injunction[132](index=132&type=chunk)[134](index=134&type=chunk) [Note 14) Supplemental Financial Information](index=32&type=section&id=14%29%20SUPPLEMENTAL%20FINANCIAL%20INFORMATION) Supplemental Cash Flow Information (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Cash paid for interest | $264 | $229 | | Cash paid for income taxes | $27 | $27 | | Noncash additions to operating lease assets | $40 | $45 | - Paramount recorded **$35 million** in gains from dispositions in Q1 2025, primarily from the sale of a noncore business[141](index=141&type=chunk) - In Q1 2024, an additional pretax gain of **$12 million** was recorded from the sale of Simon & Schuster due to a working capital adjustment[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Results%20of%20Operations%20and%20Financial%20Condition%2E) Management's analysis of Paramount Global's Q1 2025 financial performance, liquidity, capital resources, and Skydance Transactions [Skydance Transactions](index=33&type=section&id=Skydance%20Transactions) - Paramount entered into a transaction agreement with Skydance Media, LLC on July 7, 2024, to form a new holding company, New Paramount, with the transaction expected to close in the first half of 2025[144](index=144&type=chunk)[147](index=147&type=chunk) - The NAI Equity Investors will invest up to **$6.0 billion** into New Paramount for newly issued Class B Common Stock, with up to **$4.5 billion** funding a cash-stock election for existing Paramount stockholders[145](index=145&type=chunk)[146](index=146&type=chunk) - A termination fee of **$400 million** would be payable to Skydance under certain specified circumstances if the Transaction Agreement is terminated[147](index=147&type=chunk) [Overview](index=34&type=section&id=Overview) Consolidated Financial Highlights (GAAP & Non-GAAP, in millions, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | Revenues (GAAP) | $7,192 | $7,685 | $(493) | (6)% | | Operating income (loss) (GAAP) | $550 | $(417) | $967 | n/m | | Net earnings (loss) from continuing operations attributable to Paramount (GAAP) | $152 | $(563) | $715 | n/m | | Diluted EPS from continuing operations (GAAP) | $0.22 | $(0.88) | $1.10 | n/m | | Adjusted OIBDA (Non-GAAP) | $688 | $987 | $(299) | (30)% | | Adjusted net earnings from continuing operations attributable to Paramount (Non-GAAP) | $195 | $424 | $(229) | (54)% | | Adjusted diluted EPS from continuing operations (Non-GAAP) | $0.29 | $0.62 | $(0.33) | (53)% | - Revenues decreased **6%** to **$7.19 billion**, primarily due to the absence of Super Bowl LVIII broadcast in Q1 2025, partially offset by growth in licensing and streaming affiliate/subscription revenues[151](index=151&type=chunk) - Operating income improved significantly to **$550 million** from a **$417 million** loss in the prior year, driven by the absence of **$1.12 billion** in programming charges from Q1 2024[152](index=152&type=chunk) [Reconciliation of Non-GAAP Measures](index=35&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) - Non-GAAP measures like Adjusted OIBDA and Adjusted Net Earnings exclude items affecting comparability such as restructuring charges, transaction-related items, programming charges, and gains on dispositions, to provide a clearer view of underlying operational performance[158](index=158&type=chunk)[159](index=159&type=chunk) Reconciliation of Operating Income (Loss) to Adjusted OIBDA (in millions) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Operating income (loss) (GAAP) | $550 | $(417) | | Depreciation and amortization | $88 | $100 | | Programming charges | $— | $1,118 | | Restructuring charges | $65 | $186 | | Transaction-related items | $20 | $— | | Gain on dispositions | $(35) | $— | | **Adjusted OIBDA (Non-GAAP)** | **$688** | **$987** | Reconciliation of Net Earnings (Loss) and Diluted EPS (in millions, except per share amounts) | Metric (March 31, 2025) | Earnings from Continuing Operations Before Income Taxes | Provision for Income Taxes | Net Earnings from Continuing Operations Attributable to Paramount | Diluted EPS from Continuing Operations | | :--- | :--- | :--- | :--- | :--- | | Reported (GAAP) | $334 | $(100) | $152 | $0.22 | | Items affecting comparability | $50 | $(14) | $43 | $0.07 | | **Adjusted (Non-GAAP)** | **$384** | **$(107)** | **$195** | **$0.29** | | Metric (March 31, 2024) | Earnings (Loss) from Continuing Operations Before Income Taxes | Benefit from (Provision for) Income Taxes | Net Earnings (Loss) from Continuing Operations Attributable to Paramount | Diluted EPS from Continuing Operations | | :--- | :--- | :--- | :--- | :--- | | Reported (GAAP) | $(635) | $172 | $(563) | $(0.88) | | Items affecting comparability | $1,308 | $(322) | $987 | $1.50 | | **Adjusted (Non-GAAP)** | **$673** | **$(149)** | **$424** | **$0.62** | [Consolidated Results of Operations](index=38&type=section&id=Consolidated%20Results%20of%20Operations) [Revenues](index=38&type=section&id=Consolidated%20Revenues) Consolidated Revenues by Type (in millions) | Revenue Type | 2025 | % of Total | 2024 | % of Total | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Advertising | $2,513 | 35 % | $3,096 | 40 % | $(583) | (19)% | | Affiliate and subscription | $3,397 | 47 | $3,357 | 44 | $40 | 1 | | Theatrical | $148 | 2 | $153 | 2 | $(5) | (3) | | Licensing and other | $1,134 | 16 | $1,079 | 14 | $55 | 5 | | **Total Revenues** | **$7,192** | **100 %** | **$7,685** | **100 %** | **$(493)** | **(6)%** | - Advertising revenues decreased **19%** due to the absence of the Super Bowl broadcast in Q1 2025. Affiliate and subscription revenues grew **1%**, driven by a **6%** increase in streaming subscription fees, partially offset by a **5%** decline in linear affiliate fees[176](index=176&type=chunk)[178](index=178&type=chunk) [Operating Expenses](index=39&type=section&id=Consolidated%20Operating%20Expenses) Consolidated Operating Expenses by Type (in millions) | Operating Expenses by Type | 2025 | % of Operating Expenses | 2024 | % of Operating Expenses | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Content costs | $3,861 | 78 % | $3,980 | 79 % | $(119) | (3)% | | Distribution and other | $1,100 | 22 | $1,056 | 21 | $44 | 4 | | **Total Operating Expenses** | **$4,961** | **100 %** | **$5,036** | **100 %** | **$(75)** | **(1)%** | - Content costs decreased **3%**, primarily due to the absence of Super Bowl-related costs in Q1 2025, partially offset by higher costs for streaming content and recent theatrical releases. Distribution and other operating expenses increased **4%** due to higher revenue-sharing costs for streaming services[185](index=185&type=chunk)[187](index=187&type=chunk) [Programming Charges](index=39&type=section&id=Consolidated%20Programming%20Charges) - During Q1 2024, Paramount recorded **$1.12 billion** in programming charges due to a major shift in content strategy, including **$909 million** for content impairment and **$209 million** for development cost write-offs and contract termination costs[188](index=188&type=chunk) [Selling, General and Administrative Expenses](index=40&type=section&id=Consolidated%20SG%26A%20Expenses) - Selling, General and Administrative (SG&A) expenses decreased **7%** to **$1.54 billion**, principally reflecting lower compensation costs following the global workforce restructuring in 2024 and reduced marketing costs[190](index=190&type=chunk) [Depreciation and Amortization](index=40&type=section&id=Consolidated%20Depreciation%20and%20Amortization) - Depreciation and amortization expense decreased **12%** to **$88 million**, primarily due to technology assets becoming fully depreciated and intangible assets becoming fully amortized[191](index=191&type=chunk) [Restructuring and Transaction-Related Items](index=40&type=section&id=Consolidated%20Restructuring%20and%20Transaction-Related%20Items) Restructuring and Transaction-Related Items (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Severance | $— | $155 | | Exit costs | $65 | $31 | | Restructuring charges | $65 | $186 | | Transaction-related items | $20 | $— | | **Total Restructuring and transaction-related items** | **$85** | **$186** | - Q1 2025 charges included **$65 million** for lease asset impairment and **$20 million** for transaction-related legal and advisory fees. Q1 2024 included **$155 million** in severance and **$31 million** for lease asset impairment[194](index=194&type=chunk)[195](index=195&type=chunk) [Gain on Dispositions](index=41&type=section&id=Consolidated%20Gain%20on%20Dispositions) - Paramount recorded **$35 million** in gains from dispositions in Q1 2025, primarily associated with the sale of a noncore business[197](index=197&type=chunk) [Interest Expense/Income](index=41&type=section&id=Consolidated%20Interest%20Expense%2FIncome) Interest Expense/Income (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | Interest expense | $217 | $221 | $(4) | (2)% | | Interest income | $38 | $45 | $(7) | (16)% | Outstanding Debt Balances and Weighted Average Interest Rates (in millions) | Category | At March 31, 2025 | Weighted Average Interest Rate (2025) | At March 31, 2024 | Weighted Average Interest Rate (2024) | | :--- | :--- | :--- | :--- | :--- | | Total notes and debentures | $14,507 | 5.17 % | $14,607 | 5.17 % | [Loss from Investment](index=41&type=section&id=Consolidated%20Loss%20from%20Investment) - A loss of **$4 million** was recorded in Q1 2024 associated with the sale of an investment[200](index=200&type=chunk) [Other Items, Net](index=41&type=section&id=Consolidated%20Other%20Items%2C%20Net) Components of Other Items, Net (in millions) | Component | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Pension and postretirement benefit costs | $(34) | $(34) | | Foreign exchange loss | $(3) | $(4) | | **Other items, net** | **$(37)** | **$(38)** | [Provision for/Benefit from Income Taxes](index=41&type=section&id=Consolidated%20Provision%20for%2FBenefit%20from%20Income%20Taxes) - For Q1 2025, a **$100 million** income tax provision was recorded, with an effective tax rate of **29.9%** (adjusted effective rate of **27.9%**)[202](index=202&type=chunk) - For Q1 2024, a **$172 million** income tax benefit was recorded, with an effective tax rate of **27.1%** (adjusted effective rate of **22.1%**), primarily due to a **$275 million** tax benefit on programming charges[204](index=204&type=chunk) [Equity in Loss of Investee Companies, Net of Tax](index=42&type=section&id=Consolidated%20Equity%20in%20Loss%20of%20Investee%20Companies%2C%20Net%20of%20Tax) Equity in Loss of Investee Companies, Net of Tax (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | Equity in loss of investee companies | $(74) | $(91) | $17 | 19 % | | Tax benefit | $1 | $1 | $— | — | | **Equity in loss of investee companies, net of tax** | **$(73)** | **$(90)** | **$17** | **19 %** | [Net Earnings (Loss) from Continuing Operations Attributable to Paramount and Diluted EPS from Continuing Operations](index=42&type=section&id=Consolidated%20Net%20Earnings%20%28Loss%29%20from%20Continuing%20Operations%20Attributable%20to%20Paramount%20and%20Diluted%20EPS%20from%20Continuing%20Operations) Net Earnings (Loss) from Continuing Operations Attributable to Paramount and Diluted EPS (in millions, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | Net earnings (loss) from continuing operations attributable to Paramount | $152 | $(563) | $715 | n/m | | Diluted EPS from continuing operations | $0.22 | $(0.88) | $1.10 | n/m | - Net earnings from continuing operations attributable to Paramount improved to **$152 million** (EPS **$0.22**) in Q1 2025 from a net loss of **$563 million** (EPS **$(0.88)**) in Q1 2024, primarily due to the absence of **$1.12 billion** in programming charges from the prior year[207](index=207&type=chunk) [Net Earnings from Discontinued Operations](index=42&type=section&id=Consolidated%20Net%20Earnings%20from%20Discontinued%20Operations) - In Q1 2024, an additional pretax gain of **$12 million** was recorded from the sale of Simon & Schuster due to a working capital adjustment[208](index=208&type=chunk) [Segment Results of Operations](index=43&type=section&id=Segment%20Results%20of%20Operations) - Paramount's reportable segments are TV Media, Direct-to-Consumer, and Filmed Entertainment, with Adjusted OIBDA used as the primary measure of profit and loss[210](index=210&type=chunk)[212](index=212&type=chunk) Revenues by Segment (in millions) | Segment | 2025 Revenues | % of Total | 2024 Revenues | % of Total | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TV Media | $4,538 | 63 % | $5,231 | 68 % | $(693) | (13)% | | Direct-to-Consumer | $2,044 | 28 | $1,879 | 24 | $165 | 9 | | Filmed Entertainment | $627 | 9 | $605 | 8 | $22 | 4 | | Eliminations | $(17) | — | $(30) | — | $13 | 43 | | **Total Revenues** | **$7,192** | **100 %** | **$7,685** | **100 %** | **$(493)** | **(6)%** | Adjusted OIBDA by Segment (in millions) | Segment | 2025 Adjusted OIBDA | 2024 Adjusted OIBDA | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | TV Media | $922 | $1,445 | $(523) | (36)% | | Direct-to-Consumer | $(109) | $(286) | $177 | 62 | | Filmed Entertainment | $20 | $(3) | $23 | n/m | | Corporate/Eliminations | $(101) | $(124) | $23 | 19 | | Stock-based compensation | $(44) | $(45) | $1 | 2 | | **Total Adjusted OIBDA** | **$688** | **$987** | **$(299)** | **(30)%** | [TV Media Segment](index=44&type=section&id=TV%20Media%20Segment) - TV Media revenues decreased **13%** to **$4.54 billion**, primarily due to a **10%** impact from the absence of the Super Bowl broadcast in Q1 2024[216](index=216&type=chunk) - Advertising revenues decreased **21%**, largely due to the Super Bowl comparison. Affiliate and subscription revenues decreased **9%** due to linear subscriber declines and contractual pricing impacts[217](index=217&type=chunk)[221](index=221&type=chunk) - TV Media Adjusted OIBDA decreased **36%** to **$922 million**, reflecting lower revenues from the Super Bowl comparison and affiliate declines[226](index=226&type=chunk) [Direct-to-Consumer Segment](index=47&type=section&id=Direct-to-Consumer%20Segment) - Direct-to-Consumer revenues increased **9%** to **$2.04 billion**, driven by growth at Paramount+[230](index=230&type=chunk) - Paramount+ subscribers grew by **7.8 million** (**11%**) year-over-year to **79.0 million** at March 31, 2025, and increased by **1.5 million** (**2%**) quarter-over-quarter from December 31, 2024[232](index=232&type=chunk)[233](index=233&type=chunk) - Subscription revenues increased **16%** due to subscriber growth and pricing increases. Advertising revenues decreased **9%**, mainly due to the Super Bowl comparison[231](index=231&type=chunk)[232](index=232&type=chunk) - Direct-to-Consumer Adjusted OIBDA improved by **$177 million** to a loss of **$109 million**, reflecting higher revenues[238](index=238&type=chunk) [Filmed Entertainment Segment](index=48&type=section&id=Filmed%20Entertainment%20Segment) - Filmed Entertainment revenues increased **4%** to **$627 million**, primarily driven by higher licensing revenues[241](index=241&type=chunk) - Theatrical revenues decreased **3%**, with Q1 2025 benefiting from 'Sonic the Hedgehog 3' and 'Gladiator II' (Q4 2024 releases) and 'Novocaine' (late Q1 2025 release)[242](index=242&type=chunk)[244](index=244&type=chunk) - Licensing and other revenues increased **6%**, driven by strong home entertainment performance of recent theatrical releases like 'Gladiator II' and 'Sonic the Hedgehog 3'[245](index=245&type=chunk) - Filmed Entertainment Adjusted OIBDA improved by **$23 million** to **$20 million**, driven by the success of 'Sonic the Hedgehog 3'[249](index=249&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) - Paramount's primary funding sources are cash flows from operations, cash and cash equivalents (**$2.67 billion** at March 31, 2025), and debt refinancing[252](index=252&type=chunk) - The Skydance Transactions include an investment of up to **$6.0 billion** into New Paramount, with up to **$4.5 billion** for a cash-stock election and a minimum of **$1.5 billion** cash remaining at New Paramount[255](index=255&type=chunk) Cash Flow Summary (in millions) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | | :--- | :--- | :--- | | Net cash flow provided by operating activities | $180 | $260 | $(80) | | Net cash flow used for investing activities | $(69) | $(128) | $59 | | Net cash flow used for financing activities | $(139) | $(187) | $48 | | Effect of exchange rate changes on cash and cash equivalents | $40 | $(21) | $61 | | **Net increase (decrease) in cash and cash equivalents** | **$12** | **$(76)** | **$88** | - Operating activities provided **$180 million** in cash, including **$111 million** for pension plans and **$108 million** for restructuring/transaction costs. Investing activities used **$69 million**, including **$73 million** for investments and **$57 million** for capital expenditures, partially offset by **$61 million** from dispositions[258](index=258&type=chunk)[260](index=260&type=chunk) - Financing activities used **$139 million**, including **$36 million** for common stock dividends and **$77 million** in payments to noncontrolling interests[262](index=262&type=chunk) Debt Structure (in millions) | Debt Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Senior debt | $12,874 | $12,868 | | Junior debt | $1,633 | $1,633 | | **Total debt** | **$14,507** | **$14,501** | | Less current portion | $346 | $— | | **Total long-term debt, net of current portion** | **$14,161** | **$14,501** | - Paramount has a **$3.50 billion** revolving credit facility, with no outstanding borrowings and **$3.50 billion** available as of March 31, 2025. Amendments to the credit facility related to the Skydance Transactions will become operative upon closing[271](index=271&type=chunk)[275](index=275&type=chunk) [Legal Matters](index=54&type=section&id=Legal%20Matters) - Multiple lawsuits have been filed related to the Skydance Transactions, including class action lawsuits alleging breaches of fiduciary duties to Class B stockholders and demands for inspection of books and records[282](index=282&type=chunk)[283](index=283&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk) - A lawsuit by LiveVideo.AI Corp. alleges unfair competition and tortious interference, claiming defendants did not fairly consider its offer to purchase Paramount[284](index=284&type=chunk)[286](index=286&type=chunk) - The NYCERS Action alleges breaches of fiduciary duties by certain directors for failing to consider an alternative offer superior to the Skydance Transactions and challenges the no-shop provision[288](index=288&type=chunk) - Paramount is involved in a dispute with Sony Pictures Television Inc. over distribution rights for 'Wheel of Fortune' and 'Jeopardy!', with ongoing legal proceedings and an appeal filed by Paramount[291](index=291&type=chunk) - Paramount is a defendant in approximately **17,720** pending asbestos claims as of March 31, 2025, related to products manufactured by a predecessor, Westinghouse. Total settlement and defense costs (net of insurance and tax) were **$34 million** in 2024[292](index=292&type=chunk)[293](index=293&type=chunk) [Related Parties](index=57&type=section&id=Related%20Parties) - This section refers to Note 4 of the consolidated financial statements for details on related party transactions, including National Amusements, Inc. as the controlling stockholder[298](index=298&type=chunk) [Accounting Pronouncements Not Yet Adopted](index=57&type=section&id=Accounting%20Pronouncements%20Not%20Yet%20Adopted) - This section refers to Note 1 of the consolidated financial statements for details on accounting pronouncements not yet adopted, including new guidance on income tax disclosures (effective 2025) and disaggregation of income statement expenses (effective 2027)[299](index=299&type=chunk) [Cautionary Note Concerning Forward-Looking Statements](index=57&type=section&id=Cautionary%20Note%20Concerning%20Forward-Looking%20Statements) - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and factors that could cause actual results to differ materially from expectations[300](index=300&type=chunk) - Key risks include those related to the streaming business, advertising revenue impacts, competitive industries, consumer behavior, new investments, content distribution, reputation damage, asset impairment, and liabilities from discontinued operations[300](index=300&type=chunk) - Specific risks related to the Skydance Transactions include challenges in realizing synergies, dilution to EPS, negative impact on stock price, uncertainty of stock consideration, regulatory approval risks, transaction costs, and potential lawsuits[302](index=302&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk%2E) No significant changes to market risk disclosures since the Annual Report on Form 10-K for the year ended December 31, 2024 - No significant changes to market risk have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[304](index=304&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures%2E) Confirms Paramount Global's disclosure controls were effective as of March 31, 2025, and no material changes to internal financial reporting controls - Paramount's disclosure controls and procedures were effective as of March 31, 2025[305](index=305&type=chunk) - No material change in internal control over financial reporting occurred during the last fiscal quarter[306](index=306&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings%2E) Incorporates legal matters from Note 13, detailing litigation related to Skydance Transactions, distribution agreements, and asbestos claims - Information on legal proceedings is incorporated by reference from Note 13 to the consolidated financial statements[308](index=308&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors%2E) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[309](index=309&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2E) Paramount Global did not repurchase shares in Q1 2025, with $2.36 billion remaining authorization under its share repurchase program - Paramount did not purchase any shares under its share repurchase program during Q1 2025[310](index=310&type=chunk) - The company had a remaining authorization of **$2.36 billion** under its share repurchase program at March 31, 2025[310](index=310&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits%2E) Lists exhibits filed with Form 10-Q, including Rule 13a-14(a)/15d-14(a) and Section 1350 certifications, and the Interactive Data File - Exhibits include Rule 13a-14(a)/15d-14(a) and Section 1350 certifications from the principal executive and financial officers[312](index=312&type=chunk) - The Interactive Data File (XBRL) is also included as an exhibit[312](index=312&type=chunk) SIGNATURES [SIGNATURES](index=62&type=section&id=SIGNATURES) Contains signatures of Paramount Global's CFO and Chief Accounting Officer, certifying the report on May 8, 2025 - The report is signed by Naveen Chopra, Executive Vice President, Chief Financial Officer, and Katherine Gill-Charest, Executive Vice President, Controller and Chief Accounting Officer, on May 8, 2025[316](index=316&type=chunk)

EARNINGS PRESS RELEASE | May 8, 2025 PARAMOUNT REPORTS Q1 2025 EARNINGS RESULTS Powerful Slate of Hit TV Series, Films & Sports Fueled Strong Content Performance Streaming Continues Strong Momentum Focused Execution Delivered Results Across the Business Skydance Transactions Expected to Close in First Half of 2025 STATEMENT FROM GEORGE CHEEKS, CHRIS MCCARTHY & BRIAN ROBBINS, CO-CEOS We are very pleased with our performance in the quarter driven by a powerful content slate and focused execution. Paramount+ a ...

Core Viewpoint - Paramount Global anticipates the merger with Skydance Media to close in the first half of 2025, pending regulatory approvals from the FCC [1][2][3] Financial Performance - Q1 revenue decreased by 6% to $7.2 billion, but increased by 2% when excluding the impact of Super Bowl LVIII from the previous year [4] - The company reported a net profit of $152 million, a significant recovery from a loss of $554 million in the same quarter last year [5] - Adjusted EPS was 29 cents per share [5] - Streaming revenue rose by 9% to over $2 billion, with Paramount+ contributing to a 16% increase in subscription revenue [6] Subscriber Growth - Paramount+ added 1.5 million net new subscribers, reaching a total of 79 million by the end of March [7] - The growth was driven by series, post-theatrical releases, CBS primetime, and sports programming [7] Advertising and Media Performance - Ad sales fell by 9%, with 8% attributed to Super Bowl comparisons [6] - CBS is expected to be the most-watched network in primetime for the 17th consecutive season, despite a 21% decline in ad revenue [8] Division Performance - TV Media operating profit decreased by 36% to $922 million on revenue of $4.54 billion [9] - Filmed entertainment revenue increased by 4%, with theatrical revenue easing by 3% [9] - The success of Sonic the Hedgehog 3 contributed to a profit swing in the division, moving from a $3 million loss to a $20 million profit [10]

Core Viewpoint - Paramount Global announced its financial results for the first quarter ended March 31, 2025, indicating ongoing developments in its media and entertainment operations [1]. Company Overview - Paramount Global (NASDAQ: PARA, PARAA) is a leading global media, streaming, and entertainment company that creates premium content and experiences for audiences worldwide [3]. - The company's portfolio includes well-known brands such as CBS, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+, and Pluto TV [3]. - Paramount holds one of the industry's most extensive libraries of TV and film titles, providing innovative streaming services and digital video products, along with capabilities in production, distribution, and advertising solutions [3]. Conference Call Details - A conference call regarding the financial results will be held at 4:30 p.m. (ET) on May 8, 2025, with a live audio webcast available on Paramount's Investors homepage [1]. - The call can be accessed by dialing 833-470-1428 (domestic) or 404-975-4839 (international) using access code 425761 [2]. - An audio replay of the call will be available starting at 7:30 p.m. (ET) on the same day [2].

Core Viewpoint - The announcement by Trump to impose a 100% tariff on films produced abroad and entering the U.S. is aimed at protecting the domestic film industry, citing national security concerns and the need to combat excessive foreign influence in media [2][3]. Group 1: Impact on Hollywood - Following the tariff announcement, stock prices of major Hollywood studios dropped significantly, with Paramount down 2.2%, Disney 2.4%, Netflix 3.3%, and Warner Bros. 4.2% [3]. - The U.S. film industry has been gradually moving production overseas due to high labor costs, particularly in California, where Hollywood is located [5][8]. - The 2023 strike in Hollywood highlighted the industry's reliance on labor, with discussions around job losses due to the rise of artificial intelligence [5][24]. Group 2: Global Film Production Trends - As of October 2024, 120 countries and regions have implemented film production incentive policies to attract projects, benefiting from increased investment and job creation [11]. - Countries like Spain and Iceland have reported high returns on investment for film incentives, with Spain achieving a return index of 9 from 2019 to 2022 [12]. - Since 2022, U.S. film production has decreased by 26%, while global film production has surged, with a 34% year-on-year growth in the first quarter of 2025 [13]. Group 3: Economic Implications - The cost savings from relocating film projects can range from 20% to 40%, prompting many major productions to move overseas [22][23]. - Upcoming Hollywood films, such as "Mission: Impossible 8" and "Avatar 3," are being produced in countries like the UK and New Zealand, respectively [23]. - The shift in production has resulted in a significant decline in job opportunities for U.S. film industry workers, with a 25% reduction in employment over the past three years [24]. Group 4: Political Context - Trump's policies appear to be more about political maneuvering against Hollywood, which has historically opposed him, rather than genuine concern for the industry [25][28]. - The imposition of tariffs may provoke retaliatory measures from other countries, potentially harming the U.S. film industry's global standing [31][35]. - The announcement of the tariff was quickly followed by a statement from the White House indicating that the policy was not finalized, reflecting the uncertainty surrounding Trump's trade strategies [37].

Core Viewpoint - Paramount Global (PARA) is expected to report a decline in both revenues and earnings for the first quarter of 2025 compared to the previous year, with significant factors influencing these results [1][4][6]. Financial Performance Expectations - The Zacks Consensus Estimate for PARA's first-quarter 2025 revenues is $7.1 billion, reflecting a 7.56% decrease from the same quarter last year [1]. - The consensus estimate for earnings is 30 cents per share, which represents a 51.61% decrease year-over-year and has been revised downward by 21.05% in the last 30 days [1]. Subscriber Growth and Content Strategy - PARA added 5.6 million new subscribers on Paramount+ in the fourth quarter of 2024, and subscriber growth is expected to continue, albeit at a slower pace due to content release timing [5]. - The company is anticipated to maintain content momentum on Paramount+, with the return of popular shows and the launch of new series [4]. Advertising and Affiliate Revenue Trends - In the TV Media segment, affiliate revenues are projected to decline by 6.7% year-over-year, with an increased rate of decline expected in the first quarter due to recent renewals and changes in the pay TV ecosystem [6][7]. - Advertising revenues also saw a decline of 4% year-over-year in the previous quarter, with similar trends likely to persist [6]. Adjusted OIBDA and Business Trends - Adjusted OIBDA is expected to decline in the first quarter, influenced by the aforementioned business trends and the comparison to the Super Bowl, which had a positive impact in 2024 [7]. - The cumulative impact of recent renewals with major distributors is another significant factor affecting performance [7]. Earnings Expectations and Model Insights - PARA currently has an Earnings ESP of -24.85% and a Zacks Rank of 3 (Hold), indicating lower odds of an earnings beat [8].

Core Viewpoint - The announcement by President Trump to impose tariffs of up to 100% on films produced overseas has sparked widespread criticism and concern regarding its potential impact on the U.S. film industry and its global competitiveness [1] Industry Impact - The proposed tariffs are expected to significantly increase production costs for major U.S. film companies, which could undermine their competitiveness in the global market [1] - Major Hollywood companies such as Netflix, Disney, Warner Bros, and Paramount experienced stock price declines of over 2% following the announcement, indicating immediate market reaction and concern [1] Expert Opinions - Industry experts argue that while the policy is framed as a measure to "protect American films," it may actually threaten the collaborative foundation that the U.S. film industry relies on for survival, potentially leading to job losses [1] - Multiple industry associations in the U.S. are jointly urging Congress to carefully assess the economic and legal implications of the proposed tariffs [1]