Q4 2025 Paramount Skydance Corp Earnings Call

February 25, 2026

Speaker #1: Good afternoon. My name is Nadia, and I'll be the conference operator today. I would like to welcome everyone to the Paramount Q4 2025 earnings conference call.

Operator: Good afternoon. My name is Nadia, and I'll be the conference operator today. I would like to welcome everyone to Paramount's Q4 2025 Earnings Conference Call. At this time, all lines have been muted to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. I would now like to turn the call over to Jaime Morris, Paramount's EVP of Investor Relations. You may now begin your...

Speaker #1: At this time, all lines have been muted to prevent any background noise. After the speakers are marked, there will be a Q&A session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, please press star followed by 2. I would now like to turn the call over to Kevin Pratum at Paramount's EVP of Investor Relations.

Speaker #1: You may now begin your.

Speaker #2: Good afternoon, and thank you for taking the time to join us for the Paramount fourth quarter 2025 earnings call. I'm Kevin Creighton, EVP of Corporate Finance and Investor Relations.

Jaime Morris: Good afternoon, thank you for taking the time to join us for the Paramount Q4 2025 Earnings Call. I'm Jaime Morris, EVP of Corporate Finance and Investor Relations. Joining me today is our Chairman and Chief Executive Officer, David Ellison, our President, Jeff Shell, our Chief Financial Officer, Dennis Cinelli, and our Chief Strategy and Operating Officer, Andy Gordon. As a reminder, we will be making forward-looking statements today that involve risks and uncertainties. Our remarks will also include non-GAAP financial measures, and reconciliations of these measures can be found in our earnings letter or in our trending schedules, which contain supplemental information. These can be found on our investor relations website. I'll now turn it over to David for a few brief remarks before we take analyst questions.

Speaker #2: Joining me today is our Chairman and Chief Executive Officer, David Ellison, our President, Jeff Schell, our Chief Financial Officer, Dennis Giannelli, and our Chief Strategy and Operating Officer, Andy Gordon.

Speaker #2: As a reminder, we will be making forward-looking statements today that involve risks and uncertainties. Our remarks will also include non-GAAP financial measures, and reconciliations of these measures can be found in our earnings letter or in our trending schedules.

Speaker #2: Which contains supplemental information. These can be found on our investor relations website. I'll now turn it over to David for a few brief remarks before we take analyst questions.

Speaker #3: Thanks, Kevin, and good afternoon, everyone. As you saw in our Q4 results and in the most recent shareholder letter, we ended the fiscal year with a strong first full quarter under our leadership team and positive momentum heading into 2026.

David Ellison: Thanks, Jaime. Good afternoon, everyone. As you saw in our Q4 results and in the most recent shareholder letter, we ended the fiscal year with a strong first full quarter under our leadership team and positive momentum heading into 2026, meeting or exceeding guidance for the quarter that we laid out in our Q3 letter. It's been a productive 6-plus months since the launch of the new Paramount, and we are pleased with the progress made in a relatively short time. Our North Star priorities continue to guide everything we do, and we're confident we are on the right trajectory and are excited about the opportunities ahead. Before we get to your questions, I did want to take a moment to acknowledge Andrew Warren's tenure as our interim CFO.

Speaker #3: Meeting or exceeding guidance for the quarter that we laid out in our Q3 letter. It's been a productive six-plus months since the launch of the new Paramount.

Speaker #3: And we are pleased with the progress made in a relatively short time. Our Northstore priorities continue to guide everything we do, and we're confident we are on the right trajectory and are excited about the opportunities ahead.

Speaker #3: Before we get to your questions, I did want to take a moment to acknowledge Andy Warren's tenure as our interim CFO. Andy is widely respected across our organization and the industry.

David Ellison: Andy is widely respected across our organization and the industry. We are truly fortunate to have had his leadership during this important period. We're incredibly grateful for everything he's done to help position the company for success and appreciate his continued partnership as a strategic advisor. I also want to officially welcome Dennis Cinelli. He brings significant financial and operational experience, having held senior roles at GE, Uber, and Scale AI, where he served most recently as CFO. He was also briefly a member of our board of directors before assuming his current role. We're thrilled that he's joined our leadership team and look forward to you getting to know him better going forward. Finally, I'll briefly address our proposal to acquire Warner Bros. Discovery.

Speaker #3: And we are truly fortunate to have had his leadership during this important period. We're incredibly grateful for everything he's done to help position the company for success and appreciate his continued partnership as a strategic advisor.

Speaker #3: I also want to officially welcome Dennis Giannelli. He brings significant financial and operational experience, having held senior roles at GE, Uber, and Scale AI, where he served most recently as CFO.

Speaker #3: He was also briefly a member of our board of directors before assuming his current role. We're thrilled that he's joined our leadership team and look forward to you getting to know him better going forward.

Speaker #3: Finally, I'll briefly address our proposal to acquire Warner Brothers Discovery. On Monday, we submitted a revised bid of $31 per share all cash, and we look forward to continuing to engage with their leadership team and board.

David Ellison: On Monday, we submitted a revised bid of $31 per share, all cash. We look forward to continuing to engage with their leadership team and board. While we appreciate that this is obviously something you all have questions about, we won't be commenting further during today's call. With that, I'll turn it back over to Kevin for your questions.

Speaker #3: While we appreciate that this is obviously something you all have questions about, we won't be commenting further during today's call. With that, I'll turn it back over to Kevin for your questions.

Speaker #4: All right. Thank you, David and Nadia. We'll go ahead and open it up for questions. Thank you.

Jaime Morris: All right. Thank you, David and Nadia. We'll go ahead and open it up for questions. Thank you.

Kevin Creighton: All right. Thank you, David and Nadia. We'll go ahead and open it up for questions. Thank you.

Speaker #1: Great, thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If you would like to remove your question, please press star followed by 2.

Operator: Great. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to remove your question, please press star followed by two. When preparing to ask your question, please ensure to unmute yourself locally. We ask you please limit yourselves to one question. The first question goes to Peter Supino of Wolfe Research. Peter, please go ahead.

Speaker #1: We're preparing to ask your question. Please ensure to unmute yourself locally. We ask you please mute yourselves to one question. The first question goes to Peter Sapino of Wolf Research.

Speaker #1: Peter, please go ahead.

Speaker #5: Hi. Good morning. I wondered if you could comment on your initial experience as the home of UFC on your streaming service, and maybe tie those comments more broadly to your latest thinking on the viability of being something for everyone, every day.

Peter Supino: Hi, good morning. I wonder if you could comment on your initial experience as the home of UFC on your streaming service, and maybe tie those comments more broadly to your latest thinking on the viability of being something for everyone, every day. I think that's your stated strategy in streaming, and obviously it's an extremely tall competitive order, and I just wondered kind of what you've learned in the last 6 months of owning the asset that makes you more or less confident in that objective. Thank you.

Speaker #5: I think that's your stated strategy in streaming. And obviously, it's an extremely tall competitive order. And I just wondered kind of what you've learned in the last six months of owning the asset that makes you more or less confident in that objective.

Speaker #5: Thank you.

Speaker #4: No, absolutely. And really appreciate the question. First, we couldn't be more thrilled about the way the UFC partnership has started. UFC 324 was really a phenomenal start for us.

David Ellison: No, absolutely, really appreciate the question. First, we couldn't be more thrilled about the way the UFC partnership has started. UFC 324 was really a phenomenal start for us. We reached approximately 7 million households across the US and Latin America, was also the platform's largest exclusive live event to date.

Kevin Creighton: No, absolutely, really appreciate the question. First, we couldn't be more thrilled about the way the UFC partnership has started. UFC 324 was really a phenomenal start for us. We reached approximately 7 million households across the US and Latin America, was also the platform's largest exclusive live event to date.

Speaker #4: We reached approximately 7 million households across the US and Latin America. And it was also the platform's largest exclusive live event to date. We've also seen the advertising demand for UFC be strong.

Dennis Cinelli: We've also seen the advertising demand for UFC be strong. Overall, the partnership has really started ahead of expectations. In addition to that, we've really seen UFC fans engage with the vast others of our content offering. They're watching Landman, they're watching other series. We're really seeing that flywheel work for us. We also are really seeing it work well with Zuffa Boxing. We really believe in the theory of actually owning combat sports, having that entire category as a home on Paramount Plus, is something that's been working really well for us to date. More broadly, we've greenlit our 11 original series since we took over six months ago. We are really seeing strong, basically, growth in our streaming service, you know, up over 17% year to date on Paramount Plus.

Kevin Creighton: We've also seen the advertising demand for UFC be strong. Overall, the partnership has really started ahead of expectations. In addition to that, we've really seen UFC fans engage with the vast others of our content offering. They're watching Landman, they're watching other series. We're really seeing that flywheel work for us. We also are really seeing it work well with Zuffa Boxing. We really believe in the theory of actually owning combat sports, having that entire category as a home on Paramount Plus, is something that's been working really well for us to date. More broadly, we've greenlit our 11 original series since we took over six months ago. We are really seeing strong, basically, growth in our streaming service, you know, up over 17% year to date on Paramount Plus.

Speaker #4: And overall, the partnership has really started ahead of expectations. In addition to that, we've really seen UFC fans engage with a vast array of our other content offerings.

Speaker #4: They're watching Landman. They're watching other series. So we're really seeing that flywheel work for us. And we also are really seeing it work well with Zuffa Boxing.

Speaker #4: And we really believe in the theory of actually owning combat sports, having that entire category as a home on Paramount Plus. It's something that's been working really well for us to date.

Speaker #4: More broadly, we bring it 11 original series since we took over six months ago, and are really seeing strong, basically, growth in our streaming service—up over 17% year-to-date on Paramount Plus.

Speaker #4: So, from that standpoint, we're really seeing that momentum continue, and feel really good about the start to the partnership with UFC and Dana White.

Dennis Cinelli: From that standpoint, we're really seeing that momentum to continue and feel really good about the start of the partnership with UFC and Dana White.

Kevin Creighton: From that standpoint, we're really seeing that momentum to continue and feel really good about the start of the partnership with UFC and Dana White.

Speaker #4: Is there anything we want to add on sort of the last six months in streaming?

Jaime Morris: Is there anything we wanna add on sort of the last six months in streaming?

Speaker #3: Yeah. So first of all, I would just add to the UFC comments that David just made that we're really at the very beginning of this partnership.

Jeff Shell: Yeah. You know, first of all, I would just add to the UFC comments that David just made, that, you know, we're really at the very beginning of this partnership, and we're gonna experiment a lot. The beauty of having this sport exclusively and being the exclusive partners of the UFC, is we can try lots of stuff. Our upcoming fight in 7 March is gonna be, you know, partially on CBS, and we look forward to lots of experimentation as we grow the you know brand. I think the first 6 months on streaming have gone really well. We've seen accelerating growth in Paramount+, doing better and better every quarter.

Speaker #3: And we're going to experiment a lot. The beauty of having this sport exclusively and being the exclusive partners of the UFC as we can try lots of stuff.

Speaker #3: Our upcoming fight in March 7th is going to be partially on CBS. And we look forward to lots of experimentation as we grow as we grow the brand.

Speaker #3: I think the first six months on streaming have gone really well. We've seen accelerating growth in Paramount Plus, doing better and better every quarter.

Speaker #3: The key now is to get ongoing engagement and the content that I'm sure we're going to talk about later that we have coming is pretty exciting for doing that from a kind of financial perspective.

Jeff Shell: The key now is to get ongoing engagement and the content that I'm sure we're gonna talk about later, that we have coming, is pretty exciting for doing that. From a kind of financial perspective, the ad revenue has been much more promising than we expected, is really the key now is driving that engagement and that usage, because we can monetize it at Paramount+. We're feeling pretty good about the momentum we have at streaming so far.

Speaker #3: The ad revenue has been much more promising than we expected. And it's really the key now is driving that engagement and that usage because we can monetize it at Paramount Plus.

Speaker #3: And so we're feeling pretty good about the momentum we have at streaming so far.

Speaker #4: Great. Thank you, Nadia. Next question, please. Thanks, Peter.

Jaime Morris: Great. Nadia, next question, please. Thanks, Peter.

Kevin Creighton: Great. Nadia, next question, please. Thanks, Peter.

Speaker #1: The next question goes to John Hodlick of UBS. John, please go ahead.

Operator: The next question goes to John Hodulik of UBS. John, please go ahead.

John Hodulik: Great. Thanks, guys. Jeff, maybe for you, a follow-up on the comments on D2C. You guys guided to better profitability next year, you know, against some slightly higher subs. What are you seeing in terms of ARPU? There seem to be some moving parts with, you know, exiting the hard bundles, but some price increases, you know, that translates to better revenue growth. On the cost side, just aggregate sort of that commentary on leading to better D2C results. Thanks.

Speaker #6: Great. Thanks, guys. Jeff, maybe for you a follow-up on the comments on D2C. You guys got it to better profitability next year. Again, some slightly higher subs.

Speaker #6: What are you saying in terms of ARPU? There seem to be some moving parts with exiting the hard bundles, but some price increases. That translates to better revenue growth.

Speaker #6: And then on the cost side, there's just aggregates towards sort of that commentary on leading to better D2C results. Thanks.

Speaker #3: Yeah. Thanks, John. I'm going to actually pass over to Dennis for this one.

Jeff Shell: Yeah. Thanks, John. I'm gonna actually pass over to Dennis for this one.

Speaker #5: Yeah. Hi, John. Good to meet you, and I'm excited to be here. So, thanks, everybody. I think, as John did, it’s helpful probably for us to just frame our guidance overall, which a big part of that is DTC.

Dennis Cinelli: Yeah. Hi, John, good to meet you, and I'm excited to be here. Thanks, everybody. I think it's, you know, John, just helpful probably for us to just frame our guidance overall, which a big part of that is DTC. You know, as we put out, you know, overall, we expect revenue this year of $30 billion, up 4% year-over-year. DTC is gonna be the driver of that. We expect DTC to continue to accelerate growth year-over-year. You know, growth will accelerate in 2026 versus 2025. You know, the drivers of that is a couple things. We continue to see subscriber growth, what we're calling underlying, healthy subscriber growth, accelerate in 2026.

Speaker #5: As we put out overall, we expect revenue this year of $30 billion. Up 4% year on year. DTC is going to be the driver of that.

Speaker #5: We expect DTC to continue to accelerate growth year on year. So growth will accelerate in '26 versus '25. The driver of that is a couple of things.

Speaker #5: We continue to see subscriber growth—what we're calling underlying healthy subscriber growth—accelerate in '26. This will result in better ARPU, from a mix shift as well as as we realize the price increases in Q1.

Dennis Cinelli: This will result in better ARPU from a mix shift, as well as we realize the price increases in Q1. As we sort of mentioned, and I'm gonna call this out, we're making this deliberate decision to exit some uneconomic hard bundles. You'll see that in our subscriber growth this year. If you take those underlying exits out, you know, we will continue to see net adds grow year-on-year. Just to give you a call out, those uneconomic hard bundles represented less than 2% of Paramount+ revenue in 2025. Coupled with the subscriber growth, we also expect DTC ad revenue to grow this year.

Speaker #5: As we previously mentioned, as we sort of mentioned—and I'm going to call this out—we're making this deliberate decision to exit some uneconomic hard bundles.

Speaker #5: So you'll see that in our subscriber growth this year. But if you take those underlying exits out, we will continue to see net ads grow year on year.

Speaker #5: And just to give you a callout, those uneconomic hard bundles represented less than 2% of Paramount+ revenue in 2025. So, coupled with the subscriber growth, we also expect DTC ad revenue to grow this year.

Dennis Cinelli: We've been talking a lot about how we're investing in programming to drive better engagement, better ad tech, as well as the team there, that Jeff alluded to. We expect to meaningfully recover DTC ad growth in the year. At the same time, back to your question, how that comes together, we are investing in the business, but we expect DTC profitability to improve year on year, as we both grow revenue and, you know, manage our investments. You know, it's worth, you know, just taking a step back maybe and talking about the rest of the business. DTC will be the growth driver, but as we think about the rest of the portfolio we have, right?

Speaker #5: We've been talking a lot about how we're investing in programming to drive better engagement, better ad tech, as well as the team there at Jeff alluded to.

Speaker #5: And so we expect to meaningfully recover DTC ad growth in the year. At the same time, back to your question, how that comes together, we are investing in the business, but we expect DTC profitability to improve year on year as we both grow revenue and manage our investments.

Speaker #5: It's worth just taking a step back maybe and talking about the rest of the business. So DTC will be the growth driver. But as we think about the rest of the portfolio, we have, right?

Speaker #5: So TV media, we expect to see some declines in revenue. Mostly in line with the industry headwinds around pay TV. Though we expect our advertising revenue to decline to be more moderate as we execute overall and better ad sales.

Dennis Cinelli: You know, TV media, we expect to see some declines in revenue, you know, mostly in line with the industry, you know, headwinds around pay TV, that we expect our advertising revenue to decline, to be more moderate as we execute overall, and better ad sales. We feel really good about the upfronts coming up this year. We are also have tailwinds from political spending in 2026. One thing to call out, we do offset, you know, some of the we do have some impact from our sale of Telefe and Chilevisión.

Speaker #5: We feel really good about the upfronts coming up this year. We also have tailwinds from political spending in 2026. One thing to call out, we do offset some of the—you do have some impact from our sale of Telefe and Chilevision.

Dennis Cinelli: In TV media overall, I just wanna call out, you know, we've been really impressed with the team managing that business in, you know, while revenues will decline, we expect overall profitability in that business to be stable on both a profit dollars and a margin basis. The other thing is the studios, right? Studios, we do expect theatrical revenue to decline. I think we've been very clear overall that we're in a real rebuild phase of that business. As we execute that rebuild, we'll see some of that come through in the 26 slate, but mostly that will come through in future years. Even with theatrical revenue dropping down, we do expect better cost management, as well as benefits from our licensing deals to drive studio profitability up.

Speaker #5: In TV media overall, I just want to call out, we've been really impressed with the team. Managing that business in, while revenues will decline, we expect overall profitability in that business to be stable on both a profit dollars and a margin basis.

Speaker #5: And then the other thing is the studios, right? So studios, we will we do expect theatrical revenue to decline. I think we've been very clear overall that we're in a real rebuild phase of that business as we execute that rebuild.

Speaker #5: We'll see some of that come through in the '26 slate, but mostly that will come through in future years. And so even with theatrical revenue dropping down, we do expect better cost management as well as benefits from our licensing deals to drive studio profitability up.

Speaker #5: So if you put this together, overall, we're reaffirming guidance for the year on both on revenue as well as profit. Adjusted EBIT outlook of 3.8 billion.

Dennis Cinelli: If you put this together, you know, overall, we're reaffirming guidance for the year on both on revenue as well as profit, Adjusted EBIT outlook of $3.8 billion. That excludes our 300 million of stock-based compensation. You know, is improving year-on-year as driven by both the top line and as we realize our synergies. You know, we put out there, we will expect to realize 3 billion-plus of our synergies. This includes both, you know, across our entire business. You know, we expect to sort of, you know, profitability to improve in DTC and our new studio segment, still margins in TV media. I think the last question probably is just like, what does that look like beyond 2026?

Speaker #5: That excludes our $300 million of stock-based compensation. But it is improving year on year, as driven by both the top line and as we realize our synergy.

Speaker #5: So we put out there, we will expect to realize $3 billion plus of our synergies. This includes both across our entire business. And so we expect to sort of profitability to improve in DTC and our new studio segment, stable margins in TV media.

Speaker #5: And I think the last question probably is just, like, what does that look like beyond '26? And I think, without giving specific guidance, we just want to make sure we're here talking about how the team around the table—David on down—we're owner-operators.

Dennis Cinelli: You know, I think without giving specific guidance, we just wanna make sure we're here talking about how, you know, the team around the table, David on down, we're owner-operators. We're investing for long-term value creation, we expect that to show through over the next many years.

Speaker #5: We're investing for long-term value creation, and we expect that to show through over the next many years.

Speaker #4: All right. Great. Thank you, Dennis. Nadia, next question, please.

Jaime Morris: Thank you, Dennis. Nadia, next question, please.

Kevin Creighton: Thank you, Dennis. Nadia, next question, please.

Speaker #1: The next question goes to Stephen in Carhall of Wells Fargo. Stephen, please go ahead.

Operator: The next question goes to Steven Cahall of Wells Fargo. Steven, please go ahead.

Speaker #7: Thank you. First, just wanted to ask if you've had any conversations yet with the NFL? It's a big topic for investors, especially with you and Fox having so many games on Sunday.

Steven Cahall: Thank you. First, just wanted to ask if you've had any conversations yet with the NFL. It's a big topic for investors, especially with you and Fox having so many games on Sunday. As you're thinking about where that could go in the future, I was wondering if there's any potential for the games on Paramount+, which I think are currently geo-fenced, to be available sort of nationwide within that, rather than only being on Sunday Ticket. It seems like you've got some opportunities, maybe as well as some risks with the NFL renewal. Would love to know how you're thinking about that. Just on the outlook for 2026 and maybe 2027, if we think about free cash flow, I think you've said before that you're committed to investment grade with all three rating agencies.

Speaker #7: And as you're thinking about where that could go in the future, I was wondering if there's any potential for the games on Paramount Plus, which I think are currently geofenced, to be available sort of nationwide within that rather than only being on Sunday tickets.

Speaker #7: So it seems like you've got some opportunities, maybe, as well as some risks with the NFL renewal. So we'd love to know how you're thinking about that.

Speaker #7: And then just on the outlook for '26 and maybe '27, if we think about free cash flow, I think you've said before that you're committed to investment grade with all three rating agencies.

Speaker #7: I think that implies that on a total basis, including restructuring, you'd be free cash flow positive by next year. So just wondering if thinking about that one correctly.

Steven Cahall: I think that implies that on a total basis, including restructuring, you'd be free cash flow positive by next year. Just wondering if I'm thinking about that one correctly? Thank you.

Speaker #7: Thank you.

Speaker #8: Thanks, Steve. This is Jeff. I'll take the first and then pass it over to Andy for the second. So we have a great you asked have we talked to the NFL?

Jeff Shell: Thanks, Steve. This is Jeff. I'll take the first and then pass it over to Andy for the second. You know, you asked, have we talked to the NFL? We talk to the NFL almost daily. We have a great relationship with the NFL. We were the very first NFL broadcaster back when it started, and it's been, you know, nearly a century of relationship. During that century, this past year was our most watched year ever. You know, everything clicked this last year for us, with the most viewership, the biggest watched game, the biggest watched window, that 4:25 window nationally for CBS. Everything is really going well with the partnership, and we feel very good about them, and I think they feel very good about us.

Speaker #8: We talked to the NFL almost daily. We have a great relationship with the NFL. We were the very first NFL broadcaster. We went back when it started, and it's been nearly a century of relationship.

Speaker #8: And during that century, this past year was our most-watched year ever on everything clicked this last year. For us, with the most viewership, the biggest-watched game, the biggest-watched window that 425 window nationally for CBS.

Speaker #8: So, everything is really going well with the partnership, and we feel very good about them. And I think they feel very good about us.

Speaker #8: So we're not particularly concerned. Obviously, it's been widely publicized that there is a renewal discussion coming up. And we don't talk about individual negotiations, but suffice it to say, we feel pretty confident we're going to be in business with the NFL for a long time, and we have properly accounted for what we expect to be whatever impact of that negotiation in our kind of internal forecasts going forward.

Jeff Shell: We're not particularly concerned. Obviously, there, you know, it's been widely publicized that there is a renewal discussion coming up. We don't talk about individual negotiations, but suffice it to say, we feel pretty confident we're gonna be in business with the NFL for a long time, and we have properly accounted for what we expect to be whatever impact of that negotiation in our kind of internal forecast going forward. Let me just. One thing about the geo-fencing, let's talk about that for a second.

Speaker #8: Let me just say one thing about the geofencing. Let's talk about that for a second. One of the unique things about our relationship with the NFL, and I would actually say it's probably similar to Fox's relationship with the NFL, is the anchor of their flywheel is really their reach.

Jeff Shell: One of the unique things about our relationship with the NFL, and I would actually say it's probably similar to Fox's relationship with the NFL, is the anchor of their flywheel, is really their reach, and the anchor of their reach is really the reach of both CBS and Fox on Sunday afternoons. The way we get the NFL that reach, which has really helped contribute for both of our benefit to the success of the NFL, is by our vast array of both owned and operated stations, of which we have 28 and affiliates. It's important that those games get regionalized and that we aggregate that viewership and maximize the viewership in each market for the best game, both for us and Fox.

Speaker #8: And the anchor of their reach is really the reach of both CBS and Fox on Sunday afternoons. So the way we get the NFL that reach, which really helps contribute for both of our benefit to the success of the NFL, is by our vast array of both owned and operated stations, of which we have 28, and affiliates.

Speaker #8: And so it's important that those games get regionalized, and that we aggregate that viewership and maximize the viewership at each market for the best game, both for us and Fox.

Speaker #8: And that accrues to the benefit of the NFL and to us and really maximizes the reach on any given Sunday. So I don't think we're going to be doing anything with peak Paramount Plus that's any different.

Jeff Shell: That accrues to the benefit of the NFL and to us, and really maximizes the reach on any given Sunday. I don't think we're gonna be doing anything with Peacock, with Paramount+, that's any different. I don't think that, you know, Fox is gonna be doing anything different than we are doing on linear, which is to maximize that reach and that regionalization of that window, which I think works for all of us. Maybe pass it over to Andy for the.

Speaker #8: And I don't think that Fox is going to be doing anything different than we are doing on linear, which is to maximize that reach and that regionalization of that window, which I think works for all of us.

Speaker #8: Maybe pass it over to Andy for that.

Speaker #4: Yeah, sure. Thank you. Hi, Stephen. Thanks for the second question. Let me take the investment grade part first. And obviously, it's interrelated with free cash flow conversion.

Dennis Cinelli: Yeah, sure.

Jeff Shell: Thanks, Andy.

Dennis Cinelli: Hi, Steve, thanks for the second question. Let me take the investment grade part first, obviously, it's interrelated with free cash flow conversion. As we told you in the last quarter, we are absolutely committed to getting to investment grade credit metrics. This is, of course, relative to our standalone position, we expect to hit those in 2027. With regard to free cash flow, I'd just point out that notwithstanding the fact we paid down over $300 million of debt in Q1, in addition, have $800 million of restructuring charges, you take the restructuring charges out, we're actually hitting 5% free cash flow conversion this year, which of course, is not where we want to be.

Speaker #4: But as we told you in the last quarter, we are absolutely committed to getting to investment grade credit metrics. This is, of course, relative to our standalone position, and we expect to hit those in '27.

Speaker #4: With regard to free cash flow, I just point out that notwithstanding the fact we've paid down over $300 million of debt in the first quarter, and in addition, have $800 million of restructuring charges, you take the restructuring charges out, we actually are hitting 5% free cash flow conversion this year, which, of course, is not where we want to be.

Speaker #4: And as we sort of accelerate that into '27 and the out years, we expect to get back to industry norms and hopefully exceed that.

Dennis Cinelli: As we sort of accelerate that into 27 and the out years, we expect to get back to industry norms and hopefully exceed that. That's certainly part of our strategic plan. I would say there's no real change from that and what we talked about in November.

Speaker #4: That's certainly part of our strategic plan. So I would say there's no real change from that in what we talked about in November.

Speaker #8: All right. Great. Thank you. Thanks, Steve. Nadia, next question, please.

Jaime Morris: All right. Great. Thank you. Thanks, Steve. Nadia, next question, please.

Kevin Creighton: All right. Great. Thank you. Thanks, Steve. Nadia, next question, please.

Speaker #1: The next question goes to Robert Fishman of Moffatt Nathanson. Robert, please go ahead.

Operator: The next question goes to Robert Fishman of MoffettNathanson. Robert, please go ahead.

Speaker #9: Thank you. Good afternoon, everyone. When you think about your growth ahead, can you talk about how critical to creating long-term shareholder value to reinvigorate and build upon your core franchises and IP?

Robert Fishman: Thank you. Good afternoon, everyone. When you think about your growth ahead, can you talk about how critical to creating long-term shareholder value to reinvigorate and build upon your core franchises and IP? If you can, comment how Warner Bros. and HBO IP would help accelerate that growth over the next 3 to 5 years, either for a standalone Paramount+ or a combined platform with HBO Max?

Speaker #9: And if you can comment how Warner Bros. and HBO IP would help accelerate that growth over the next three to five years, either for standalone Paramount Plus or a combined platform with HBO Max?

Speaker #9: And then on a related note, just how do we think about overall content spending? Again, either standalone or with Warner Bros. especially factoring in the sports and the long-term strategy to grow that profit and cash flow.

Ric Prentiss: On a related note, just how do we think about overall content spending, again, either standalone or with Warner Bros. Discovery, especially factoring in the sports and the long-term strategy to grow that profit and cash flow? Thank you.

Robert Fishman: On a related note, just how do we think about overall content spending, again, either standalone or with Warner Bros. Discovery, especially factoring in the sports and the long-term strategy to grow that profit and cash flow? Thank you.

Speaker #9: Thank you.

Speaker #4: Yeah. Thanks, Robert, for the question. We won't be answering anything related to Warner as David mentioned in his opening remarks. So just a reminder for everyone else on the line, but we'll go ahead and how do we think about sort of franchise and long-term value as we mentioned in the letter?

Jaime Morris: Yeah. Thanks, Robert, for the question. We won't be answering anything related to Warner, as David mentioned in his opening remarks. Just a reminder for everyone else on the line. We'll go ahead and, you know, how do we think about sort of franchise and long-term value, as we mentioned in the letter?

Speaker #8: Yeah, no, absolutely. So I'll speak to that. And look, as we're the largest shareholder of the Class Bs, we really approach everything through the lens of how do we create long-term, basically, shareholder value.

David Ellison: Yeah, no, absolutely, Robert, I'll speak to that. You know, look, as we're the largest shareholder of the Class Bs, we really approach everything through the lens of how do we create long-term, basically shareholder value. Which really means, you know, we're long-term investors. We're long-term owner-operators, and we really have a long-term horizon in terms of how we're approaching this. If you step back across all of our businesses, we're actually really pleased about the investments that we're making, really going back to our North Star priorities. Also, we talked about streaming. I'll start in the studio segment. You know, as Dennis said, you know, we inherited a slate that, you know, has underperformed. We're gonna see, you know, significant improvement in the profitability of the film slate this year.

Speaker #8: Which really means we're long-term investors. We're long-term owner-operators. And we really have a long-term horizon in terms of how we're approaching this. If you step back across all of our businesses, we're actually really pleased about the investments that we're making really going back to our North Star priorities.

Speaker #8: We've talked about streaming. I'll start in the studio segment. As Dennis said, we inherited a slate that has underperformed. We're going to see significant improvement in the profitability of the film slate this year.

Speaker #8: But I think if you really look at how we are doubling down on our franchises and really reinvigorating them and reinvesting in them, which is something that we did in partnership when we were, obviously, when I ran Skydance, and to date, in the little over six months that we've been here, we've actually—we're going to release 16 movies this year, versus the 8 films that we inherited.

David Ellison: I think if you really look at how we are doubling down on our franchises and really, reinvigorating them and reinvesting in them, which is something that, you know, we did in partnership when we were, you know, obviously, when I ran Skydance. You know, to date, in the little over 6 months that we've been here, you know, we're gonna release 16 movies this year versus the 8 films that we inherited. We're really gonna be at a steady state of over 15 movies per year. We've greenlit 11 movies, basically since we've been here in the first 6 months, including films like A Quiet Place and Sonic, which is really us doubling down on our franchises.

Speaker #8: And we're really going to be at a steady state of over 15 movies per year. We've greenlit 11 movies basically since we've been here in the first six months.

Speaker #8: Including films like A Quiet Place and Sonic, which is really us doubling down on our franchises. Taylor Sheridan, Pete Berger, Hard at Work, and Call of Duty, which we're really excited about.

David Ellison: Taylor Sheridan and Pete Berg are hard at work at Call of Duty, which we're really excited about. You know, we have Scream opening this weekend. When, you know, again, going to Paramount+, in addition to the investments that, you know, we've obviously made in the UFC and sports, you know, we've actually greenlit 11 original series on top of the incredible slate that we're fortunate enough to step into. We're also investing significantly in the improved product experience on both P+ and Pluto. Consumers are gonna continue to get more incredible content they love and an overall better user experience, which we think will really position ourselves well for growth into the future.

Speaker #8: And we have Scream opening this weekend. Again, going to Paramount Plus in addition to the investments that we've obviously made in the UFC and sports, we've actually greenlit 11 original series on top of the incredible slate that we're fortunate enough to step into.

Speaker #8: And we're also investing significantly in the improved product experience on both P+ and Pluto. So consumers are going to continue to get more incredible content that they love and an overall better user experience.

Speaker #8: Which we think will really position ourselves well for growth into the future. And then when you step back and look at our linear really anchored by CBS, we had eight of the top 10 shows on broadcast.

David Ellison: When you step back and look at our linear, really anchored by CBS, you know, we had eight of the top 10 shows on broadcast, the number one show in Tracker, the number one new show in Sheriff Country, the number one news program in 60 Minutes. We really are seeing strong demand for our content across our portfolios, and we're only seeing that accelerate going forward. You know, it's been six months, but we really do feel good about the work the team has really done to date, and you can expect that to accelerate into the future quickly.

Speaker #8: The number one show in tracker the number one new show in sheriff county the number one news program in 60 minutes. And so we really are seeing strong demand for our content across our portfolios.

Speaker #8: And we're only seeing that accelerate going forward. So it's been six months, but we really do feel good about the work the team has really done to date.

Speaker #8: And you can expect that to accelerate into the future quickly. What do we think about the content spend for Paramount overall?

Jaime Morris: How do we think about the content spend for-

David Ellison: Uh.

Jaime Morris: Paramount overall?

Speaker #4: Yeah, so overall content spend—sorry, I want to show you that. So, we talked about, we've obviously increased our content spend, as we announced last quarter, by $1.5 billion.

David Ellison: Yeah. So overall content spend, sorry, I wanna show you that. We talked about, you know, we've obviously increased our content spend as we announced last quarter by $1.5 billion, you know, which is really going towards all the things that I talked about, which is really scaling our film slate, scaling our original series, investing more into sports. We do believe that that will create long-term shareholder value. You know, as because again, like, you know, it's, it is a priority for us to make sure that we can win in the content space, make sure that we are the most technologically capable media company, and really, have the appropriate operational efficiencies across the company.

Speaker #4: Which is really going towards all the things that I talked about. Which is really scaling our film slate, scaling our original series, investing more into sports.

Speaker #4: And we do believe that that will create long-term shareholder value. Because again, it is a priority for us to make sure that we can win in the content space.

Speaker #4: Make sure that we are the most technologically capable media company. And really have the appropriate operational efficiencies across the company. That's what really drives all the decisions here.

David Ellison: That's what really drives all the decisions here, and I think we're off to a really strong start in the first six months.

Speaker #4: And I think we're off to a really strong start in the first six months.

Speaker #8: Thank you, David. Nadia, next question, please.

Jaime Morris: Thank you, David. Nadia, next question, please.

Kevin Creighton: Thank you, David. Nadia, next question, please.

Speaker #1: The next question goes to Rick Prentice of Raymond James. Rick, please go ahead.

Ric Prentiss: The next question goes to Ric Prentiss of Raymond James. Ric, please go ahead.

Operator: The next question goes to Ric Prentiss of Raymond James. Ric, please go ahead.

Speaker #10: Hi. It's good afternoon. Yeah. Question in the letter you talk about leveraging your IP across the ecosystem. Give us some concrete examples of what you hope to achieve going across film, television, streaming, live experiences, publishing, consumer products.

[Analyst] (Raymond James): Nice. Good afternoon. yeah, question in the letter, you talk about leveraging your IP across the ecosystem. Give us some concrete examples of what you hope to achieve going across film, television, streaming, live experiences, publishing, consumer products, and how we might see that? If you were to benchmark yourself against the peer group, how do you think you are doing as far as monetizing that IP?

Ric Prentiss: Nice. Good afternoon. yeah, question in the letter, you talk about leveraging your IP across the ecosystem. Give us some concrete examples of what you hope to achieve going across film, television, streaming, live experiences, publishing, consumer products, and how we might see that? If you were to benchmark yourself against the peer group, how do you think you are doing as far as monetizing that IP?

Speaker #10: And how we might see that. And if you were to benchmark yourself against the peer group, how do you think you are doing as far as monetizing that IP?

Speaker #8: So it's a great question. And I'll point to a couple of things. One, I'll use Teenage Mutant Ninja Turtles as obviously the most recent example.

David Ellison: It's a great question, and I'll point to a couple things. Like, one, I'll use Teenage Mutant Ninja Turtles as obviously the most recent example of really, you know. We're obviously, we have two films that we're obviously making, you know, obviously in the Turtles landscape. We have series, and we also have consumer products. Huge compliment to obviously Josh, who came to us from Mattel, who in the first month of basically being at Paramount created the most significant consumer products partnership in the history of the company, over 5x would have been done to date. Which I think is kind of, you know, a great example in this quarter of really how we're maximizing our IP across the flywheel that we've created.

Speaker #8: Really, we are—obviously—we have two films that we're obviously making. Obviously, in the Turtles landscape, we have series. And we also have consumer products.

Speaker #8: Huge compliment to obviously Josh who came to us from Mattel. Who in the first month of basically being at Paramount created the most significant consumer products partnership in the history of the company.

Speaker #8: Over 5X would have been done to date. Which I think is kind of a great example in this quarter of really how we're maximizing our IP across the flywheel that we've created.

Speaker #8: And one of the other things, if you take a step back, I think that we're really proud of is really the Paramount One initiative that we've launched, really as a marketing platform.

David Ellison: One of the other things, if we take a step back, I think that we're really, we're really proud of is, you know, really the Paramount One initiative that we've launched really as a marketing platform. The UFC is one of the first things that we obviously ran through that, where we really activated all of our linear channels, our direct-to-consumer platforms, and really the entire ecosystem to deliver billions of impressions, you know, which really helped drive that launch of UFC 324. Which again, came in ahead of our expectations, you know, and really helped us create the largest live event in the history of Paramount+.

Speaker #8: The UFC is one of the first things that we obviously ran through that. Where we really activated all of our linear channels our direct-to-consumer platforms.

Speaker #8: And really the entire ecosystem. To deliver billions of impressions which really helped drive that launch of UFC 324. Which again came in ahead of our expectations.

Speaker #8: And really helped us create the largest live event in the history of Paramount Plus. And you're going to see us activating that Paramount One ecosystem across a lot of our tentpole franchises going forward.

David Ellison: You're gonna see us activating that Paramount One ecosystem across a lot of our tenfold franchises going forward, across our series launches, as we really integrate this business to operate as one company. We're seeing that work incredibly well in the first couple of months. I just have to really give a tremendous amount of credit to the team that have really been, you know, breaking down silos and operating as one business. The results are incredibly promising. We're, you know, still in the beginning, six months in, but we're really excited about the trajectory.

Speaker #8: Across our series launches. As we really integrate this business to operate as one company. And we're seeing that work incredibly well in the first couple of months.

Speaker #8: And I just have to really give a tremendous amount of credit to the team that have really been breaking down silos and operating as one business.

Speaker #8: And the results are incredibly promising. We're still in the beginning six months in, but we're really excited about the trajectory. Great. Thanks. Nadia, we'll go ahead and jump to the next question, please.

Dennis Cinelli: Great, thanks. Nadia, we'll go ahead and jump to the next question, please.

Kevin Creighton: Great, thanks. Nadia, we'll go ahead and jump to the next question, please.

Speaker #1: The next question goes to Cut Gun Morale of Evercore ISI. Cut Gun, please go ahead.

Operator: The next question is to Kutgun Maral of Evercore ISI. Kutgun, please go ahead.

Speaker #10: Great. Thanks for taking the questions. A few on AI if I could. First, Gen AI is clearly progressing quickly and dramatically. Short-form clips don't threaten the core of your studios today.

Kutgun Maral: Great. Thanks for taking the questions. A few on AI, if I could. You know, first, GenAI is clearly progressing quickly and dramatically. Short-form clips don't threaten the core of your studios today, but future length personalized stories could become feasible. How are you positioning the company for that evolution? Do you expect content creation to become commoditized, or do brands and IP become more valuable in this world? At a high level with AI, maybe you could talk about your guiding principles on licensing and any guardrails. Finally, one of your peers recently outlined a path to bring curated AI-generated short clips into its streaming service. Do you see a future where AI-enabled short-form, user-generated or prompted content lives inside Paramount+? Thanks.

Speaker #10: But future-length personalized stories could become feasible. So how are you positioning the company for that evolution? Do you expect content creation to become commoditized?

Speaker #10: Or do brands and IP become more valuable in this world? And at a high level with AI, maybe you could talk about your guiding principles on licensing and any guardrails.

Speaker #10: And finally, one of your peers recently outlined a path to bring curated AI-generated short clips into its streaming service. Do you see a future where AI-enabled short-form user-generated or prompted content lives inside Paramount Plus?

Speaker #10: ? Thanks.

David Ellison: So it's a great question. First, look, I'll kind of step back to where I really say, like, one of our core goals is to become the most technologically capable media company. You know, there's no question that AI is gonna be a significant transformation across our industry and others. I wanna say that, you know, first and foremost, we are really a home for storytellers, and we are a content company first. We really view artificial intelligence as an unbelievable tool for artists that will be a significant unlock on creativity.

Speaker #4: So it's a great question. And first, I'll kind of step back to where I really say it is one of our core goals is to become the most technologically capable media company.

Speaker #4: And there's no question that AI is going to be a significant transformation across our industry and others. But I want to say that first and foremost, we are really a home for storytellers.

Speaker #4: And we are a content company first. And so we really view artificial intelligence as an unbelievable tool for artists that will be a significant unlock on creativity.

David Ellison: With that said, we are also big believers that, you know, when you really go back to 1992, when I believe it was James Cameron in Digital Domain, when they basically did away with opticals and actually started getting into digital composites, was really the beginning of the kind of software-based CPU pipelines that we've all been iterating off of, you know, the last several decades. I think there's no question that we're at one of those inflection points where, you know, model-driven GPU pipelines are gonna get deployed across the business. Again, we really view that as a tool for artists to be able to unlock creativity.

Speaker #4: With that said, we are also big believers that when you really go back to 1992 when I believe it was James Cameron and Digital Domain when they basically did away with opticals.

Speaker #4: And actually started getting into digital composites. Was really the beginning of the kind of software-based CPU pipelines that we've all been iterating off of for the last several decades.

Speaker #4: And I think there's no question that we're at one of those inflection points where model-driven GPU pipelines are going to get deployed across the business.

Speaker #4: But again, we really view that as a tool for artists to be able to unlock creativity. When you look at some of the things we're doing internally in terms of how we're investing, when you look at the engineers that we obviously have at the company currently, you can expect us to kind of 10X the size of the headcount that we are basically investing towards this.

David Ellison: When you look at some of the things we're doing internally in terms of how we're investing, when you look at the engineers that we obviously have at the company currently, you can expect us to kind of 10x the size of the headcount that we are basically investing towards this. Really wanna be in a position where we can be a leader in the industry in terms of how this transformation is shaped. To your question about do I think it'll be commoditized? The answer is no. I don't think there's anything that's gonna replace artists. I don't think there's anything that's gonna replace the creativity of original storytelling.

Speaker #4: And really want to be in a position where we can be a leader in the industry in terms of how this transformation is shaped.

Speaker #4: To your question about do I think it'll be commoditized, the answer is no. I don't think there's anything that's going to replace artists. I don't think there's anything that's going to replace the creativity of original storytelling.

David Ellison: I would actually point towards, you know, when you look at the value of intellectual property, whether it was Sora on their launch or whether it was Skydance, I think you saw us obviously defend our IP against both of those things. The fact that there was so much engagement around the characters and intellectual property, you know, that audiences love, I think speaks to the value of that intellectual property. You know, and we are in a unique position to be able to take advantage of that.

Speaker #4: I would actually point towards when you look at the value of intellectual property, whether it was Sora on their launch or whether it was Seedance and I think you saw us obviously defend against both of the defend our IP against both of those things.

Speaker #4: But the fact that there was so much engagement around the characters and intellectual property that audiences love I think speaks to the value of that intellectual property.

Speaker #4: And we are in a unique position to be able to take advantage of that. There's nothing I'm really in a position that I can fully elaborate on further.

David Ellison: There's nothing I'm really in a position that I can fully elaborate on further. Again, I think when you look at the power of IP enabled by AI, is gonna be something that is, I think a tailwind for us as a company. We're excited to help be key drivers of that innovation.

Speaker #4: But again, I think when you looked at the power of IP enabled by AI is going to be something that is I think a tailwind for us as a company.

Speaker #4: And we're excited to help, kind of, be key drivers of that innovation.

Speaker #8: Great. All right. Thanks for the question, Cut Gun. Nadia, we can go ahead and jump to the next question, please.

Dennis Cinelli: All right. Thanks for the question, Kutgun. Nadia, we can go ahead and jump to the next question, please.

Kevin Creighton: All right. Thanks for the question, Kutgun. Nadia, we can go ahead and jump to the next question, please.

Speaker #1: The next question goes to Michael Morris of Guggenheim. Michael, please go ahead.

Operator: The next question goes to Michael Morris of Guggenheim. Michael, please go ahead.

Speaker #11: Thank you. Good afternoon, guys. I want to ask about the studio first. Dennis, I think you mentioned an expected decline in theatrical revenue in '26.

David Ellison: Thank you. Good afternoon, guys. I wanted to ask about the studio first. Dennis, I think you mentioned an expected decline in theatrical revenue in 2026. I'm hoping you can reconcile that with the significant increase that you're expecting in the number of titles being released. As you think about that decline, does that pertain to the studio business overall, or is it only the theatrical component, and you expect growth in licensing? If I could, just on the Pluto TV headwinds that you cited, the trend there seems to be well below the CTV industry overall. Is this a business that you expect to turn around as a growth driver, or is this maybe not core to the future as you see it? Thank you.

Michael Morris: Thank you. Good afternoon, guys. I wanted to ask about the studio first. Dennis, I think you mentioned an expected decline in theatrical revenue in 2026. I'm hoping you can reconcile that with the significant increase that you're expecting in the number of titles being released. As you think about that decline, does that pertain to the studio business overall, or is it only the theatrical component, and you expect growth in licensing? If I could, just on the Pluto TV headwinds that you cited, the trend there seems to be well below the CTV industry overall. Is this a business that you expect to turn around as a growth driver, or is this maybe not core to the future as you see it? Thank you.

Speaker #11: I'm hoping you can reconcile that with the significant increase that you're expecting in the number of titles being released. And as you think about that decline, does that pertain to the studio business overall?

Speaker #11: Or is it only the theatrical component? And you expect growth in licensing? And then if I could just on the Pluto headwinds that you cited, the trend there seems to be well below the CTV industry overall.

Speaker #11: Is this a business that you expect to turn around as a growth driver? Or is this maybe not core to the future as you see it?

Speaker #11: Thank you.

Speaker #12: Thanks, Michael. Yeah. Let me take the first part and then hand over to David. So, on the studio business overall, we will see growth overall on the studio business on a revenue basis.

Dennis Cinelli: Thanks, Michael. Yeah, let me take the first part, then hand over to David. On the studio business overall, we will see growth overall on the studio business on a revenue basis. That will be driven primarily by the licensing and also combining Skydance into that segment. What I was talking about is theatrical, right? In theatrical, we are increasing the number of films, but we are comping last year, which was a big output in Mission: Impossible. That's what will drive the theatrical decline year-on-year for 2026. Then the second part of your question, as we think about Pluto. I mean, I think what you'll see is in the DTC segment, right, in Q4, we grew 10% year-on-year.

Speaker #12: And that will be driven primarily by the licensing. And also combining Skydance into that segment. What I was talking about is theatrical, right? So in theatrical, we are increasing the number of films but we are comping last year, which was a big output in Mission Impossible.

Speaker #12: So that's what will drive the theatrical decline year on year for 2026. And then the second part of your question, as we think about Pluto, I mean, I think what you'll see is in the DTC segment, right, in Q4, we grew 10% year on year.

Speaker #12: Paramount Plus was up 17%. Non-Paramount Plus was down 16%. And as we call out, that's primarily driven by Pluto. And it's primarily driven by the monetization of Pluto.

Dennis Cinelli: Paramount+ was up 17%. Non-Paramount+ was down 16%. As we call out, that's primarily driven by Pluto, and it's primarily driven by the monetization of Pluto. I think what we should call out is actually Pluto engagement is up. Monthly active users, the engagement of those users is actually up. What we're facing is a monetization headwind, which we are addressing, and we addressed that in our guidance. I think it's worth passing over to David to talk overall about how we think about Pluto, and our FAST strategy.

Speaker #12: I think what we should call out is actually Pluto engagement is up. So monthly active users, the engagement of those users is actually up.

Speaker #12: And so what we're facing is a monetization headwind, which we are addressing. And we address that in our guidance. And I think it's worth passing over to David to talk overall about how we think about Pluto and the fast and our fast strategy.

Speaker #13: Yeah. And I want to expand on what Dennis said on the studio side. So, again, we stepped into last year with a film slate that had underperformed.

David Ellison: Yeah, I want to expand on what Dennis said on the studio side. You know, again, we stepped into last year, a film slate that had underperformed. We have, you know, scaled, you know, from 8 movies to 16 releases this year, and it's gonna be significantly more profitable. When you really think about getting our core franchises back online, you don't really see that start to occur until 2027, just because of what the life cycle is of obviously making a tentpole. You know, it's 2 years to basically from beginning to release at the earliest. You know, I would look at we're making significant improvements in profitability across our film slate this year.

Speaker #13: We have scaled from eight movies to 16 releases this year. And it's going to be significantly more profitable. But when you really think about getting our core franchises back online, you don't really see that start to occur until '27 just because of what the lifecycle is of obviously making a tentpole.

Speaker #13: It's two years to basically from beginning to release. At the earliest. So I would look at we're making significant improvements in profitability across our film slate this year.

Speaker #13: And then in '27, when you start seeing films like A Quiet Place and Sonic, Call of Duty, several of our other franchises that basically will be releasing in '27, '28, and beyond, you will see our box office numbers increase.

David Ellison: Then in 2027, when you start seeing films like A Quiet Place and Sonic, you know, Call of Duty, several of our other franchises that basically will be releasing in 2027, 2028 and beyond, you will see our box office numbers increase, you will see profitability increase. You know, there is a 2-year life cycle, kind of minimum to those big event films. I actually think the team has done an exceptional job, you know, putting us in a good position for this year, for the level of growth that we're gonna have across our theatrical slate, then you will see that accelerate significantly into 2027. As Dennis said, really looking at Pluto, stepping back, I am a big believer in the FAST space.

Speaker #13: You will see profitability increase. But there is a two-year lifecycle, kind of minimum, to those big event films. And I actually think the team has done an exceptional job putting us in a good position for this year, for the level of growth that we're going to have across our theatrical slate.

Speaker #13: And then you will see that accelerate significantly into '27. As Dennis said, really looking at Pluto, stepping back, I am a big believer in the fast space.

Speaker #13: And I think when you really look at globally, fast is something that is only going to grow in importance. And when you look at the signs that are also really encouraging on Pluto, is we are seeing engagement grow.

David Ellison: I think when you really look at globally, FAST is something that is only going to grow in importance. When you look at the signs that are also really encouraging on Pluto, is we are seeing engagement grow. The, the headwind we're facing is really monetization, and we're doing several things to correct that. While, you know, Pluto has always been a leader in the FAST space, it's a profitable platform, it was, from our perspective, underinvested in, by the previous owners and managers, both in a content standpoint as well as from a product standpoint. You know, we've also brought in, you know, obviously, new leadership to help us on the advertising side.

Speaker #13: The headwind we're facing is really monetization. And we're doing several things to correct that. And while Pluto has always been a leader in the fast space, it's a profitable platform.

Speaker #13: It was, from our perspective, underinvested in by the previous owners and managers. Both in a content standpoint as well as from a product standpoint.

Speaker #13: And we've also brought in, obviously, new leadership to help us on the advertising side. We have new leadership on the DTC side that are really working really well hand in hand to make sure that we improve the product and improve the monetization.

David Ellison: We have new leadership on the D2C side that are really working really well hand in hand to make sure that we, you know, improve the product and improve the monetization. You know, really, our overall streaming convergence that we talked about on our last earnings call, where, you know, we had really three separate stacks that were running on, you know, multiple clouds, all independent of one another, we, you know, that convergence obviously will be done in the coming quarters. You will see continued product improvement to both Pluto and P Plus. With that, we'll see the monetization curve correct, and we'll really start seeing, you know, better monetization, better growth, and more in line with peers, with expectations to be above.

Speaker #13: Really our overall streaming convergence that we talked about in our last earnings call where we had really three separate stacks that were running on multiple clouds all independent of one another.

Speaker #13: That convergence obviously will be done in the coming quarters. And you will see continued product improvement to both Pluto and P+. And with that, we'll see the monetization curve correct and we'll really start seeing better monetization, better growth, and more in line with peers with expectations to be above.

Dennis Cinelli: Thank you, David. All right, Nadia, we'll go ahead and turn it back over to you, please.

Speaker #8: Thank you, David. All right. Nadia, we'll go ahead and turn it back over to you, please.

Kevin Creighton: Thank you, David. All right, Nadia, we'll go ahead and turn it back over to you, please.

Speaker #1: Great. Thank you. The final question goes to Brian Craft of Deutsche Bank. Please go ahead.

Operator: Great. Thank you. The final question goes to Bryan Kraft of Deutsche Bank. Please go ahead.

Speaker #11: Hi. Good afternoon. Thanks for taking the question. First on UFC, I know you had cited $7 million MAUs. I was curious as to whether you can give us some color on the number of unique viewers that you had.

Bryan Kraft: Hi, good afternoon. Thanks for taking the question. First on UFC, I know you had cited 7 million MAUs. I was curious as to whether you can give us some color on the number of unique viewers that you had, just given that you have 79 million subs, trying to understand what the percentage of those subscribers overall is that are engaging with UFC at some level. Secondly, I was wondering if you could talk about what you've been seeing since you completed the acquisition, both in churn and CAC. How are those trending? How much opportunity do you see for improvement in both of those key metrics over the next one or two years? How critical is it to improve either or both of those to the long-term economic success of the streaming business? Thank you.

Speaker #11: Just given that you have 79 million subs, I'm trying to understand what percentage of those subscribers overall is engaging with UFC at some level.

Speaker #11: And then secondly, I was wondering if you could talk about what you've been seeing since you completed the acquisition, both in churn and CAC, how are those trending, how much opportunity do you see for improvement in both of those key metrics over the next one or two years, and how critical is it to improve either or both of those to the long-term economic success of the streaming business?

Speaker #11: Thank you.

Speaker #13: Yeah, no, absolutely. So look, I want to reiterate: we're incredibly happy with the way our partnership with the UFC has started. When it goes to the 7 million households across the US and Latin America, that was above our expectation.

David Ellison: Yeah, no, absolutely. Look, I want to reiterate, we're incredibly happy with the way our partnership with the UFC has started. you know, when it goes to the 7 million households across US and Latin America, you know, that was above our expectation. Again, it is the largest exclusive sporting event that we've had, obviously, in Paramount+ history. We are seeing that momentum continue. In terms of basically, you know, churn, we are seeing that trend the right direction. I still think there's areas for us to be able to continue to improve, which is why you're seeing us invest the way that we are, both in content as well as in the product.

Speaker #13: And again, it is the largest exclusive sporting event that we've had. Obviously, in Paramount Plus history. So and we are seeing that momentum continue.

Speaker #13: In terms of basically churn, we are seeing that trend the right direction. But I still think there's areas for us to be able to continue to improve.

Speaker #13: Which is why you're seeing us invest the way that we are both in content as well as in the product. We know at 79 million global subscribers, there's a lot of opportunity for growth ahead of us.

David Ellison: ount Skydance Corporation. We are a global media and entertainment company formed by a merger.** We know at 79 million global subscribers, there's a lot of opportunity for growth ahead of us. When you look at the investments that we're making, again, in the first 6 months, greenlighting 11 original series, as well as the work that Dane Glasgow and his team are really doing to significantly improve the product, I think you'll see us improve in all of those metrics going forward. Obviously, we believe those investments will significantly yield long-term shareholder value. We're pleased about the work to date, but you're only going to see that improve going forward into the future. I mean, Jeff, anything you want to add to that?

Speaker #13: And when you look at the investments that we're making—again, in the first six months, greenlighting 11 original series, as well as the work that Dane Glasgow and his team are really doing to significantly improve the product—I think you'll see us improve in all of those metrics going forward.

Speaker #13: And obviously, we believe those investments will significantly yield long-term shareholder value. So we're pleased about the work to date. But you're only going to see that improve going forward in the future.

Speaker #13: I mean, do you have anything you want to add to that?

Speaker #8: No. I just think what I would say is there's a seasonality aspect to the business too. So churn is something that we traditionally saw at Paramount Plus really spike up in the summer after the masters and kind of come back down with the NFL.

Jeff Shell: ...No, I just think, I, what I would say is there's a seasonality aspect to the business, too. Churn is something that we traditionally saw at Paramount+ really spike up in the, in the summer after the Masters and kinda come back down with the NFL. Two of the things we've talked about today, that David's talked about, both the UFC and its year-round programming, combined with the increased movie slate, which then pays dividends as it goes to Paramount+ year round, I think that's gonna have a significant impact to churn in addition to the other factors that David just talked about.

Speaker #8: So two of the things we've talked about today that David's talked about, both the UFC and its year-round programming combined with the increased movie slate which then pays dividends as it goes to Paramount Plus, year-round, I think that's going to have a significant impact on churn in addition to the other factors that David just talked about.

Speaker #13: And Brian, just jumping in, this is Dennis. One thing to correct, the stat is 7 million households. That engage in UFC 324.

Dennis Cinelli: Bryan, just jumping in, this is Dennis. One thing to correct, the stat is 7 million households that engage in UFC 324.

Speaker #8: Great. Thank you, team. And thank you all for joining the call today. We appreciate it. Feel free to reach out if you have any questions.

[Company Representative] (Paramount Skydance): Great. Thank you, team, and thank you all for joining the call today. We appreciate it. Feel free to reach out if you have any questions.

Kevin Creighton: Great. Thank you, team, and thank you all for joining the call today. We appreciate it. Feel free to reach out if you have any questions.

Operator: Thank you. This now concludes today's call. Thank you all for joining, and you may now disconnect your lines.

Q4 2025 Paramount Skydance Corp Earnings Call

Request a DemoDemo

PSKY

Paramount Skydance

Earnings