Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Paramount Global (PARA, Financial) reported a 2% year-over-year revenue growth, excluding the Super Bowl, with significant improvements in DTC OIBDA and free cash flow generation.
• Paramount+ achieved a subscriber base of 79 million globally, marking an 11% increase year-over-year, with a notable 16% revenue growth driven by original content.
• Pluto TV experienced its highest consumption ever, with global viewing time up 26% year-over-year, indicating strong user engagement.
• The Filmed Entertainment segment saw success with Sonic the Hedgehog 3, which generated nearly $500 million in box office sales and performed well on streaming platforms.
• CBS continues to deliver strong audience numbers, with significant viewership for sports events like the NCAA championship and The Masters, contributing to its position as the most-watched broadcast network.

Negative Points

• Paramount Global (PARA) faced challenges in digital advertising, particularly with Pluto TV, due to an influx of supply affecting monetization.
• TV Media advertising revenue was flat year-over-year, excluding the Super Bowl, indicating potential stagnation in traditional advertising streams.
• The company anticipates a decline in Q2 subscribers due to content seasonality and the termination of an international hard bundle partnership.
• Despite improvements, D2C OIBDA still reported a loss of $109 million, highlighting ongoing challenges in achieving profitability in the streaming segment.
• The macroeconomic environment remains uncertain, with potential impacts on advertising revenue, necessitating a focus on cost efficiencies and strategic investments.

Q & A Highlights

Q: Can you provide insights on the current digital advertising trends, particularly regarding Pluto TV and the pressure on digital advertising? A: Chris McCarthy, Interim Principal Executive Officer, CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks, explained that while there is pressure due to new entrants in the digital supply space, they expect supply-demand dynamics to balance out over time. Although they haven't seen this yet, they are confident that increased engagement on platforms like Paramount+ and Pluto will eventually lead to improved monetization.

Q: How do you balance licensing your content to third-party streamers versus keeping it exclusive to Paramount+? A: Brian Robbins, CEO of Paramount Pictures, stated that while content licensing is a growth business, they prioritize using their most valuable IP to grow their owned and operated assets. They may license content on a co-exclusive basis or after it premieres on their platforms, ensuring they maximize the value of their content.

Q: What are your thoughts on acquiring more sports rights, given the success of sports in driving viewership? A: Chris McCarthy emphasized that they have a robust sports portfolio and will continue to be open and opportunistic in acquiring sports rights. They aim to ensure an optimal sports portfolio that drives audience and scale, focusing on rights that matter.

Q: Can you discuss the expectations for linear declines and streaming growth, and the drivers behind these trends? A: Naveen Chopra, CFO, explained that the primary driver of linear revenue trends is the decline in pay-TV subscribers, which is expected to continue. On the streaming side, growth is driven by subscriber growth, improvements in churn and ARPU, and scaling revenue, which leads to significant profitability improvements.

Q: Why haven't you acquired 101 Studios to be fully integrated with Taylor Sheridan, given his importance to Paramount? A: Chris McCarthy noted that Taylor Sheridan and 101 Studios are separate entities. Paramount has an exclusive agreement with Sheridan through 2028 and owns all the IP from that partnership. They value the current relationship with 101 Studios and plan to maintain it as it is, as it aligns with their strategic goals.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.