Paramount Global Q1 Earnings Beat Estimates, Revenues Fall Y/Y

Paramount Global PARA shares closed flat in after-market hours after reporting adjusted earnings of 29 cents per share for the first quarter of 2025, which beat the Zacks Consensus Estimate by 7.41%. The bottom line declined 53.2% from the year-ago quarter’s reported figure 

Revenues of $7.19 billion beat the Zacks Consensus Estimate by 1.5%. The figure declined 6% year over year. The performance was impacted by softness in TV Media revenues.

Consolidated adjusted OIBDA fell 30% from the year-ago quarter’s level to $688 million, which reflected year-over-year improvements in D2C and filmed entertainment.

Selling, general and administrative expenses decreased 7.2% year over year to $1.54 billion.

Paramount Global Price, Consensus and EPS Surprise

Paramount Global price-consensus-eps-surprise-chart | Paramount Global Quote

The Skydance transaction is expected to close in the first half of 2025. Meanwhile, Paramount Global remains focused on leveraging its content assets, investing in sports, major film and TV franchises, and streaming originals to drive DTC growth.

PARA’s Revenue Details

Advertising revenues (34.94% of total revenues) of $2.513 billion fell 18.8% year over year. Affiliate revenues (47.23% of total revenues) of $3.397 billion increased 1.2% year over year. Theatrical revenues (2.06% of total revenues) totaled $148 million in the reported quarter, which declined 3.3% year over year. Licensing and other revenues (15.77% of total revenues) of $1.134 billion increased 5.1% year over year.

PARA’s Segment Details

DTC Details

DTC revenues increased 9% year over year to $2.044 billion. Its subscription revenues rose 16%, driven by subscriber growth.

DTC carried its strong momentum into the first quarter, with solid revenue growth and improved profitability. Paramount+ remained a top-three domestic SVOD platform for Original Series hours watched, marking another record-breaking quarter for viewership and engagement. Paramount+ added 1.5 million subscribers in the reported quarter. MobLand delivered the biggest global series premiere ever on Paramount+, while Yellowjackets set a new record with its most-streamed episode to date. Pluto TV reached its highest total viewing hours globally and domestically and remains the most widely distributed FAST service.

DTC advertising revenues declined 9%, principally reflecting an 8% impact from the comparison against Super Bowl LVIII in the first quarter of 2024.

Global viewing hours across Paramount+ and Pluto TV grew 31% year over year. Paramount+ subscribers reached 79 million, with 1.5 million net additions in the quarter. Paramount+ global ARPU increased 2%, while its domestic watch time per user increased 17% year over year. 

DTC adjusted OIBDA improved $177 million year over year, indicating revenue growth.

TV Media Details

TV Media revenues decreased 13% year over year to $4.5 billion due to ongoing declines in affiliate and advertising revenues. 

The segment’s advertising revenues decreased 21% due to the Super Bowl. Excluding the Super Bowl, TV Media advertising revenues were flat. 

TV Media affiliate and subscription revenues decreased 9%, driven principally by subscriber declines as well as the impact of recent renewals.

The segment’s licensing and other revenues rose 4% in the quarter. 
TV Media adjusted OIBDA decreased 36% to $922 million, primarily reflecting the comparison against the broadcast of the Super Bowl, as well as the decline in affiliate revenues.

CBS remains on track to be the most-watched network in primetime for the 17th straight season, marking the longest winning streak on record. Including sports, CBS claimed 15 of the top 25 programs, led by hits like Tracker and Matlock. The AFC Championship Game drew 57.4 million viewers, setting a new record for the AFC and becoming the biggest conference championship in 15 years. On cable, The Daily Show with Jon Stewart averaged 1.3 million viewers per episode.

Filmed Entertainment Details

Filmed Entertainment revenues increased 4% year over year to $627 million. Theatrical revenues decreased 3% to $148 million. The first quarter of 2025 benefited from the continued success of the fourth quarter of 2024 releases of Sonic the Hedgehog 3 and Gladiator II and the late first-quarter 2025 release of Novocaine, while the first quarter of 2024 benefited from the releases of Bob Marley: One Love, Mean Girls and Miramax’s The Beekeeper. 

Licensing and other revenues increased 6%, driven primarily by higher home entertainment revenues from recent theatrical releases.

The company reported an adjusted OIBDA of $20 million, up from a negative OIBDA of $3 million year over year, driven by the success of Sonic the Hedgehog 3. 

Paramount Pictures delivered another quarter of revenue growth and stronger profitability, driven by the ongoing success of Sonic the Hedgehog 3 and the number one domestic debut of Novocaine. Gladiator II and Sonic the Hedgehog 3 also performed well in home entertainment and streaming, helping drive acquisitions on Paramount+. Both ranked among the top five most-viewed movies in the platform’s history, with Gladiator II becoming the most-viewed film ever on Paramount+.

PARA’s Balance Sheet & Cash Flow Details

As of March 31, 2025, Paramount Global had cash and cash equivalents of $2.67 billion compared with $2.66 billion as of Dec. 31, 2024.

Total debt, as of March 31, 2025, was $14.16 billion compared with $14.6 billion as of Dec. 31, 2024.

The non-GAAP free cash flow was $123 million compared with $56 million reported in the previous quarter.

Estimates for Q2 FY25

The Zacks Consensus Estimate for second-quarter 2025 revenues is pegged at $7.08 billion, indicating a year-over-year decline of 7.82%.

The consensus mark for earnings is pegged at 27 cents per share, down by 22.9% over the past 30 days. The figure indicates a decline of 56.45% from the year-ago quarter’s reported figure. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Zacks Rank & Stocks to Consider

Paramount Global currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Consumer Discretionary sector are Sportradar Group SRAD , Birkenstock Holding PLC BIRK and Fox FOX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Sportradar Group have gained 29.4% year to date. SRAD is set to report first-quarter 2025 results on May 12.

Shares of Birkenstock Holding PLC have lost 7.4% year to date. BIRK is slated to report second-quarter fiscal 2025 results on May 15.

Shares of Fox have returned 2.4% year to date. FOX is set to report third-quarter fiscal 2025 results on May 12.

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This article originally published on Zacks Investment Research (zacks.com).

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