Paramount beat Wall Street expectations for its first quarter of 2025 on Thursday after reporting higher-than-expected revenue, swinging to a total profit of $152 million and narrowing its streaming losses 62% year over year to $109 million.
The media giant’s total revenue for the quarter fell 6% to $7.2 billion, weighed down by a 13% decline in its TV/Media business to $4.5 billion, which included a 10% impact from the comparison against CBS’ broadcast of Super Bowl LVIII in the first quarter of 2024. The company also reported a 19% decline in total advertising revenue to $2.5 billion due to the Super Bowl. Excluding the impact of the Super Bowl, total revenue grew 2% year over year and advertising revenue was flat.
The decline in TV/media was offset by a 9% revenue increase in Paramount’s direct-to-consumer business to $2.04 billion, primarily driven by subscriber growth, and a 4% revenue increase in its filmed entertainment business to $627 million, driven by higher advertising and licensing revenues.
Paramount co-CEO Chris McCarthy told analysts on the company’s earnings call that it has not seen a meaningful impact from President Trump’s tariff policy, citing a “dynamic macro environment.” However, he added the company is “prioritizing key investments while taking incremental steps to streamline non-content expenses” given the uncertainty.
Chief financial officer Naveen Chopra added that it’s premature to quantify what the impact will be on earnings and cash flow until there’s more clarity.
Here are the key quarterly results:
Net income: A profit of $152 million, compared to a loss of 554 million a year ago.
Earnings Per Share: 22 cents per share. On an adjusted basis, the company posted a 29 cents per share, compared to 27 cents per share expected by analysts surveyed by Zacks Investment Research.
Revenue: $7.192 billion, down 6% year over year, compared to $7.08 billion expected by Zacks.
Operating income: A profit of $550 million, compared to a loss of $417 million a year ago. On an adjusted basis, operating income fell 30% to $688 million.
Streaming subscribers: Added 1.5 million subscribers during the quarter for a total of 79 million.
Paramount Streaming a bright spot
Subscription revenue grew 16% to $1.57 billion, driven by subscriber growth at Paramount+. The streaming service grew revenue 16% to $1.69 billion, driven by year over year subscriber growth and improvements in churn. Ad revenue for the streaming division fell 9% to $473 million, reflecting an 8% impact from the comparison against the Super Bowl.
Executives touted a 17% year over year increase in Paramount+’s global watch time and a 26% year over year increase in Pluto TV consumption.
“Monetization has been softer than expected due to the influx of supply,” McCarthy said. “We anticipate supply demand dynamics will stabilize over time and the continued increases in engagement on Paramount+ and Pluto will lead to monetization over time.”
He added that Paramount would continue to take an “opportunistic look” at bundling and strategic partnerships.
Chopra said the company continues to expect revenue growth at Paramount+, driven by an acceleration average revenue per user, and total affiliate and subscription revenue growth from the ongoing transition to streaming. However, subscribers will decline in the second quarter due to seasonality and the termination of an international hard bundle partnership. Paramount+ remains on track to reach domestic profitability in 2025.
TV/Media Disappoints
The TV/media segment saw profits fall 36% to $922 million, primarily reflecting the Super Bowl comparison and a decline in affiliate revenue.
Affiliate and subscription revenue fell 9% to $1.83 billion, driven primarily by subscriber declines and the impact of recent renewals. Advertising revenue fell 21% to $2.04 billion due to the Super Bowl. Excluding the Super Bowl, ad revenue growth was flat. Licensing and other revenue grew 4% to $674 million.
Linear advertising in the second quarter of 2025 will reflect a lower volume of sports compared to the previous quarter. For digital advertising, Paramount expects trends in the second quarter to look similar to the first quarter.
“We feel really good about the conversations and discussions that we’ve been having. I will note that scatter in this quarter is up double digits, which has always been a really interesting early indicator for us for the upfront. So we’re feeling really good,” McCarthy said. “Macro is certainly on people’s mind, but everyone is giving us great feedback. We continue to hear good things, particularly around the unique set of assets and the volume of hits and the really strong sports portfolio. So we’re pretty good.”
Sonic the Hedgehog 3 Lifts Filmed Entertainment to Profit
Filmed entertainment swung to a profit of $20 million, compared to a loss of $3 million a year ago, driven primarily by the continued success of “Sonic the Hedgehog 3.”
Ad revenue jumped 200% to $3 million and licensing and other revenue climb 6% to $476 million, primarily driven by higher home entertainment revenue from recent theatrical releases.
Theatrical revenue fell 3% to $148 million, though the quarter benefitted from the continued success of “Sonic the Hedgehog 3” and “Gladiator II” and the late release of “Novocaine.” Releases in the prior year period included “Bob Marley: One Love,” “Mean Girls” and Miramax’s “The Beekeeper.”
Co-CEO Brian Robbins said production costs on Paramount Pictures’ films have successfully been reduced by 35% over the last 24 months. Chopra expects a strong revenue contribution from “Mission Impossible: Final Reckoning,” but said marketing spend for the film will result in an operating loss for the segment.
Skydance deal on track to close in first half of 2025
The latest quarterly results come as Paramount’s pending $8 billion merger with Skydance Media remains stuck in limbo as it awaits FCC approval due to a required transfer of broadcast licenses. The deal, which is expected to close in the first half of 2025, recently triggered its first 90-day extension.
If the deal is not closed by July 6, the deadline will be automatically pushed another 90 days to Oct. 4. After that, if the deal is still not closed, or if a regulator blocks the merger or one of the parties involved breaches the terms of the agreement, then Skydance and Paramount will have the option of terminating the deal. Exercising that option would leave Paramount on the hook to pay Skydance a $400 million breakup fee.
In addition to its regulatory review, the FCC has launched a “news distortion” investigation into an Oct. 7 “60 Minutes” interview with former Vice President Kamala Harris. That interview is also the subject of a $20 billion lawsuit from President Donald Trump, who CBS is currently in mediation talks with about a potential settlement.
FCC chairman Brendan Carr has said the settlement talks have nothing to do with its regulatory review, but emphasized that “all options remain on the table” and its investigation remains ongoing. He did not rule out the possibility for broadcast license revocations as a result of public interest standard violations.
Carr also said he hasn’t personally reviewed public comments on the “60 Minutes” interview materials that were turned over to the FCC as part of its investigation. The final deadline for the public comment period ended on March 24.
Paramount shares are down 8% in the past year, but are up 10% year to date and 5.5% in the past six months.
