Paramount Skydance (PSKY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $6.81 billion, down 11% year-over-year, mainly due to lower licensing, linear network, and theatrical revenues, partially offset by streaming growth.

• Adjusted OIBDA rose 43% to $867 million, driven by improved streaming results and cost efficiencies.

• Paramount+ revenue surged 46% year-over-year; D2C segment posted its first profitable quarter since launch.

• Paramount+ global subscribers reached 68.4 million at Q2 2024, up 13% year-over-year but down 2.8 million sequentially due to a planned exit from South Korea.

• Announced a definitive merger agreement with Skydance Media, expected to close in the first half of 2025.

Financial highlights

• Q2 2024 GAAP net loss from continuing operations was $5.41 billion, driven by a $5.98 billion goodwill impairment charge for Cable Networks.

• Adjusted net earnings from continuing operations for Q2 2024 were $361 million; adjusted diluted EPS was $0.54.

• Free cash flow for Q2 2024 improved to $219 million from $10 million in Q2 2023.

• Paramount+ subscription revenue rose 50% year-over-year; total D2C subscription revenue grew 12%.

• D2C advertising grew 16% year-over-year; total company advertising declined 6% due to lower sports inventory.

Outlook and guidance

• Paramount+ is expected to return to net subscriber growth in the second half of 2024 and reach domestic profitability in 2025.

• D2C advertising growth in Q3 anticipated to be similar to Q2; TV Media affiliate revenue growth to decelerate modestly.

• Licensing revenue expected to return to growth in the second half of 2024, but modest decline for the full year.

• Additional restructuring charges of $300–$400 million for severance expected in Q3 2024.

• Skydance merger expected to close in H1 2025, subject to regulatory approvals.