Key Takeaways
- Paramount Skydance (PSKY) reported a Q4 adjusted loss of $0.12 per share, significantly worse than the anticipated $0.01 loss
- Quarterly revenue reached $8.15 billion, marking a 2.1% year-over-year increase and meeting analyst projections
- First-quarter 2026 revenue outlook of $7.15–$7.35 billion fell short of the $7.36 billion analyst consensus
- Paramount+ finished the year with 78.9 million paying subscribers; UFC programming anticipated to boost subscriber numbers
- The company increased its Warner Bros. Discovery acquisition bid to $31 per share, surpassing Netflix’s $27.75 proposal
On February 26, Paramount Skydance unveiled its fourth-quarter financial results, revealing an adjusted loss of $0.12 per share. This figure fell considerably short of Wall Street’s expectation for a $0.01 per share loss.
Quarterly revenue totaled $8.15 billion, representing a 2.1% uptick compared to the prior year and aligning closely with the analyst forecast of $8.14 billion.
The filmed entertainment division emerged as a standout performer, recording a 16% revenue increase. However, this growth stemmed primarily from incorporating Skydance licensing revenues rather than from genuine box office momentum.
Paramount Skydance Corporation Class B Common Stock, PSKY
Conversely, the TV Media division presented challenges. This segment experienced a 5% revenue decline to $4.71 billion, pressured by softer advertising markets and reduced affiliate income.
The ongoing trend of cord-cutting continues to impact traditional television operations. Paramount openly acknowledged expectations for TV Media revenue to contract throughout the year, citing pressures “mostly in line with industry pay TV headwinds.”
Forward Outlook Falls Below Expectations
Looking ahead to Q1 2026, Paramount provided revenue guidance ranging from $7.15 billion to $7.35 billion. This projection trails the Street’s $7.36 billion estimate. During the comparable period in 2025, the company generated $7.19 billion in revenue.
For the entire 2026 fiscal year, management anticipates approximately $30 billion in revenue, representing roughly 4% growth versus 2025.
However, there’s a complication. The company cautioned that Paramount+ faces potential subscriber losses stemming from its decision to exit a “hard bundle” distribution agreement, which could result in losing between 4 and 5 million subscribers.
The Streaming Business and Paramount+ Performance
Paramount+ concluded 2025 with a subscriber base of 78.9 million paid members. Management believes that securing exclusive UFC content will serve as a catalyst for subscriber expansion throughout 2026.
The streaming division’s trajectory is clearly where Paramount hopes to direct investor attention. Industry analyst Paolo Pescatore from PP Foresight framed it succinctly: “It’s about whether streaming momentum can outrun the structural unwind in linear.”
Escalating the Warner Bros. Discovery Pursuit
Perhaps the most significant development occurred outside the quarterly financials. This week, Paramount elevated its acquisition proposal for Warner Bros. Discovery to $31 per share, up from its previous $30 offer.
This strategic move directly challenges Netflix’s competing proposal of $27.75 per share targeting WBD’s streaming operations and studio properties.
Warner Bros. Discovery’s board is currently evaluating whether Paramount’s enhanced full-company proposal represents a more attractive transaction. At stake is an extensive film and television library featuring valuable franchises including Harry Potter and Game of Thrones.
In an investor communication, CEO David Ellison characterized the WBD acquisition as an “accelerant” for Paramount’s strategic objectives, though he refrained from providing additional commentary on ongoing negotiations.
He also emphasized to shareholders that Paramount Skydance maintains “confidence in our standalone strategy and growth trajectory.”
According to TipRanks, PSKY currently carries a Strong Sell consensus rating, comprising zero Buy recommendations, one Hold rating, and four Sell ratings. The consensus price target of $12.25 suggests potential upside of approximately 20.6% from present trading levels.
Over the trailing twelve months, PSKY stock has declined 9.5%.
