PSKY Reports Q3 Earnings, Shares Jump on $1.5B Programming Plan

Core Insights - Paramount Skydance (PSKY) plans to invest $1.5 billion in theatrical and direct-to-consumer platforms to enhance its content pipeline, leading to a 7.5% increase in PSKY shares [1] Financial Performance Overview - PSKY reported combined revenues of $6.7 billion for Q3 2025, flat compared to $6.73 billion in 2024, with a consensus estimate of $6.94 billion [4] - Operating income was $244 million in the successor period, compared to $80 million in the predecessor period, down from $337 million in Q3 2024 [5] - Adjusted OIBDA reached $655 million (15.9% margin) in the successor period, up from $297 million (11.5% margin) in the predecessor period, but down from $858 million (12.7% margin) in 2024 [6] Revenue Breakdown - Advertising revenues totaled $1.94 billion, down 11% year-over-year from $2.17 billion, while affiliate and subscription revenue increased 7% to $3.43 billion [7] - Theatrical revenue increased slightly to $112 million from $108 million, while licensing and other revenue declined 15% to $1.23 billion [8] Segment Performance - The Direct-to-Consumer segment saw pro forma revenue of $2.17 billion, a 17% year-over-year increase, with Paramount+ driving 24% revenue growth and adding 1.4 million subscribers [9][10] - The TV Media segment reported pro forma revenues of $3.80 billion, down 12% from $4.3 billion, with advertising revenue declining 12% to $1.47 billion [12] - The Filmed Entertainment segment reported pro forma revenue of $768 million, down 4% from $799 million, with a combined adjusted OIBDA loss of $49 million [14] Balance Sheet and Cash Flow - As of September 30, 2025, cash and cash equivalents totaled $3.26 billion, with total debt at $13.63 billion and free cash flow of $15 million for Q3 2025 [15] Future Outlook - For Q4 2025, PSKY expects total revenue between $8.10 billion and $8.30 billion, indicating 1%-4% year-over-year growth, and adjusted OIBDA between $500 million and $600 million [16] - For 2026, PSKY projects total revenues of $30 billion, representing approximately 4% year-over-year growth, and adjusted OIBDA of $3.5 billion [17]