Paramount Skydance Q3 revenue rises 5% to $7.025 billion ahead of Warner Bros. Discovery integration

Paramount Skydance closed the third quarter of 2026 with higher revenue, as the company prepared to enter a new phase of its industrial development. For the quarter ended September 30, the entertainment group reported revenue of $7.025 billion, up 5% year-over-year.

Operating income reached $368 million, while Adjusted EBITDA stood at $1 billion, representing a 14.2% margin. Net earnings amounted to $73 million.

Studios and streaming drive growth

Performance was primarily supported by the Studios and Direct-to-Consumer divisions. Studios revenue increased 23% year-over-year to $1.5 billion, mainly driven by stronger licensing activity and content production for third-party distributors. The segment generated Adjusted EBITDA of $129 million, highlighting the strategic value of content libraries and intellectual property in today's entertainment market.

The Direct-to-Consumer streaming division generated revenue of $2.5 billion, up 11% compared with the same period last year, while Paramount+ revenue increased 21%. Growth was supported by an approximately 6% increase in subscribers and a 14% rise in average revenue per user, reflecting improved monetization through price adjustments and advertising. DTC Adjusted EBITDA reached $225 million.

Furthermore, TV Media revenue declined 7% to $3 billion, primarily reflecting weaker advertising performance and continued erosion in pay-TV subscriptions. Nevertheless, the division maintained solid profitability, generating approximately $1 billion in Adjusted EBITDA and a 34% margin, supported by ongoing cost-reduction initiatives.

Warner Bros. Discovery reshapes the group's future

The quarterly results take on particular significance following the completion of Warner Bros. Discovery's acquisition on October 6, just days after the reporting period ended. Consequently, the third-quarter figures do not yet include Warner Bros. Discovery's financial contribution. The transaction brings together some of the most influential brands in global entertainment, including Paramount Pictures, Warner Bros., HBO, HBO Max and Paramount+.

The company is targeting at least $6 billion in annualized synergies within three years through operational integration and cost optimization. Among its initial strategic initiatives is a planned bundle combining HBO Max and Paramount+ in early 2027, ahead of a broader integration of the streaming platforms.

Debt remains a key challenge as the group looks toward 2027

The financial challenge, however, remains substantial. Before the acquisition, Paramount Skydance reported gross debt of $15 billion. Following the completion of the transaction and related financing activities, the combined group's gross debt increased to approximately $87 billion, making the execution of planned synergies and stronger cash generation critical priorities for management.

Near-term performance also faces pressure from the weaker-than-expected results of some Warner Bros. theatrical releases, which could reduce fourth-quarter profit by as much as $200 million. Looking ahead to 2027, the group nevertheless expects pro forma Adjusted EBITDA growth, supported by streaming expansion and its cost-synergy program.

For Paramount Skydance, third-quarter growth therefore represents only the starting point. The real test will be turning the combination of two major entertainment ecosystems into a sustainable business model, capable of competing in the global streaming market while unlocking the full value of both studios' film and television libraries.