Multinational media and entertainment corporation Paramount (NASDAQ: PSKY) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 1.1% year on year to $6.91 billion. The company expects next quarter’s revenue to be around $7.05 billion, close to analysts’ estimates. Its non-GAAP profit of $0.18 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

Paramount’s second quarter results were shaped by continued growth in its streaming and studio segments, alongside disciplined cost control initiatives. Management attributed improved profitability to a stronger slate of theatrical releases, double-digit subscriber and engagement growth for Paramount+, and a successful focus on operational efficiencies. CEO David Ellison pointed to the nearly doubled theatrical slate and expanded sports content portfolio as key contributors, stating, “We nearly doubled our theatrical slate, deepened our roster with top-tier creative talent, and expanded our sports portfolio.” Adjusted EBITDA gains reflected these strategic investments, even as linear TV revenues continued to decline.

Looking ahead, management’s guidance is anchored by accelerating direct-to-consumer momentum and ongoing investments in technology and content. CFO Dennis Cinelli emphasized that streaming and studios will remain growth engines, with DTC revenue expected to accelerate and advertising trends forecast to improve as Pluto and other platforms relaunch. The company’s roadmap for the remainder of the year focuses on converging its streaming tech stack, content expansion, and further integration of cost-saving measures. Ellison said, "We continue to make significant investments in theatrical and premium series to drive future engagement, subscriber growth and long-term value."

Key Insights from Management’s Remarks

Paramount’s leadership credited robust streaming subscriber growth, expanded premium content, and enterprise-wide efficiency initiatives as the main drivers behind improved margins and profitability in the quarter.

• Streaming subscriber momentum: Paramount+ added 2 million subscribers, reaching 81.6 million globally, and achieved its best retention quarter to date, driven by popular series like Dutton Ranch and major sports events including UFC and the World Cup. Management highlighted the mix of content and technology improvements as central to engagement and margin expansion.
• Studios profit progression: The Studios division posted a profitable quarter, up from a loss last year, with a 16% revenue increase. Management credited a larger and more diverse film pipeline and success from titles like Scary Movie, as well as data-driven marketing that improved box office returns per dollar spent.
• TV Media margin resilience: Despite continued revenue declines in linear TV, profit in the TV Media segment grew 14%. Efforts to slow affiliate revenue decline, including strong affiliate partnerships and innovative bundling with streaming credentials, contributed to improved segment margins.
• Cost transformation and synergies: Enterprise-wide efficiency efforts are on track to deliver $2.7 billion in annualized savings, with a target of over $3 billion in cost synergies from the Skydance-Paramount merger. Technology integration and centralized shared services were highlighted as key contributors to ongoing margin gains.
• Advertising transition to digital: While TV advertising remained pressured, digital ad revenue—especially on Paramount+—grew at a double-digit rate. Management cited a strong upfront season and investments in digital ad technology as critical to offsetting traditional media declines and supporting overall revenue stability.

Drivers of Future Performance

Paramount’s guidance is underpinned by sustained growth in streaming and studios, continued cost efficiencies, and a shift toward digital advertising.

• Streaming and content investments: Management expects DTC revenue growth to accelerate, supported by ongoing investments in content and technology, including the convergence of Paramount+, Pluto, and BET+ platforms. Upcoming content releases and enhanced personalization are seen as drivers of engagement and retention.
• Cost discipline and synergy realization: The company anticipates further profit improvement from its multi-year efficiency program, including additional technology integration and procurement savings. Migration to a unified tech stack and Oracle Fusion ERP are expected to deliver incremental cost reductions throughout the year.
• Advertising and platform relaunch: Paramount is banking on a return to growth in digital ad revenues as the Pluto relaunch gains traction and as more advertising inventory is unified across properties. Risks flagged by management include the pace of linear TV decline and competitive content spending.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) the rollout and early user data from the convergence of Paramount+, Pluto, and BET+ platforms, (2) the pace of digital ad revenue recovery as the relaunch of Pluto and other advertising innovations unfold, and (3) the progress of the Warner Bros. Discovery transaction, especially regulatory and financial milestones. We will also monitor the impact of upcoming major content releases on engagement and subscriber trends.

Paramount currently trades at $8.47, in line with $8.39 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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