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Introduction & Market Context
Paramount Skydance Corp (PSKY) released its Q2 2025 financial presentation on July 31, 2025, revealing a company in transition as it balances streaming growth against traditional TV segment challenges. The stock closed at $15.88, down 2.06% in regular trading, with an additional 0.57% decline in premarket trading to $15.79, reflecting investor concerns despite some positive developments.
The presentation comes as Paramount Skydance continues to navigate the competitive streaming landscape while managing its substantial debt load of $11.77 billion. With the stock trading closer to its 52-week low of $9.95 than its high of $20.86, investors appear cautious about the company's mixed financial performance.
Quarterly Performance Highlights
Paramount Skydance reported total revenue of $6.8 billion for Q2 2025, representing a modest 1% year-over-year growth. The company's adjusted OIBDA (Operating Income Before Depreciation and Amortization) reached $1.51 billion for the quarter, with the TV Media segment contributing the lion's share at $1.78 billion.
As shown in the following comprehensive financial overview:
The company reported operating income of $949 million for Q2 2025, with net earnings from continuing operations of $209 million. Diluted earnings per share for the quarter stood at $0.31, based on 679 million weighted average diluted shares outstanding.
On an adjusted basis, the company's performance showed some improvement:
Adjusted diluted EPS from continuing operations reached $0.75 for Q2 2025, significantly higher than the reported EPS, primarily due to adjustments for impairment charges and other one-time items.
Detailed Financial Analysis
The TV Media segment remains Paramount Skydance's financial backbone, generating $1.78 billion in adjusted OIBDA for Q2 2025. However, the segment faces ongoing challenges from cord-cutting and declining linear TV viewership, despite CBS maintaining its position as the top broadcast network for 17 consecutive years.
The Direct-to-Consumer (DTC) segment, which includes Paramount+, showed notable progress by achieving positive adjusted OIBDA of $48 million in Q2 2025. This milestone represents a significant turnaround for the streaming business, which has been a major investment focus for the company.
The following breakdown illustrates the DTC segment's performance:
Paramount+ reached 77.7 million subscribers globally by the end of Q2 2025, adding approximately 10 million new subscribers year-over-year. The service generated $3.45 billion in revenue for the quarter, with subscription revenue of $3.23 billion forming the bulk of this figure.
Meanwhile, the Filmed Entertainment segment continued to struggle, reporting negative adjusted OIBDA of $64 million for Q2 2025, despite theatrical revenue of $402 million.
Cash Flow and Debt Position
Paramount Skydance's free cash flow situation shows some improvement but remains a concern when viewed alongside its substantial debt obligations:
The company generated $237 million in free cash flow during Q2 2025, after accounting for $102 million in capital expenditures. However, net debt stood at $11.77 billion as of June 30, 2025, highlighting the significant financial leverage the company continues to carry.
The reconciliation of adjusted metrics provides additional insight into the company's financial performance:
The adjustments to OIBDA include $157 million in impairment charges for Q2 2025, reflecting ongoing challenges in certain business segments.
Streaming Progress
The positive adjusted OIBDA of $48 million for the Direct-to-Consumer segment represents a critical milestone in Paramount Skydance's streaming strategy. This improvement comes as the company continues to invest in content for Paramount+, including leveraging popular franchises like South Park.
During the earnings call, Co-CEO Chris McCarthy emphasized the company's focus on quality over quantity, stating, "Our strategy isn't about the volume of originals, rather it's about the volume of original hits." This approach appears to be gaining traction as Paramount+ continues to add subscribers in a competitive streaming market.
The following reconciliation shows how adjusted earnings compare to reported figures:
Adjusted net earnings from continuing operations attributable to Paramount reached $510 million for Q2 2025, significantly higher than reported figures due to various adjustments.
Forward-Looking Statements
While Paramount Skydance faces challenges in its traditional TV business and carries substantial debt, the positive trajectory of its streaming operations provides some optimism. The company's strategic focus on hit content rather than volume suggests a disciplined approach to growth in the competitive streaming landscape.
However, investors remain cautious, as reflected in the stock's performance. The company will need to demonstrate sustained improvement in free cash flow and debt reduction while continuing to grow its streaming business to regain investor confidence.
As Non-Executive Chair Shari Redstone noted during the earnings call, "Content was king," emphasizing the company's continued belief that quality programming will drive success across both traditional and streaming platforms despite the ongoing industry transformation.
Full presentation:
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