Mirror Review
November 11, 2025
The industry waited for the first Paramount earnings report since the latest Paramount–Skydance merger, and the reveal delivered a mix of pressure, early progress, and big questions.
Inside the company, this quarter carried a lot of weight since it was the first test of whether the massive restructuring and new leadership direction could steady a business that had spent years fighting industry issues.
CEO David Ellison said in the shareholder letter, “Nearly 100 days have passed since we launched the new Paramount, and we are pleased with the progress to date.” He added that the merger was meant to “honor a company with over a century of storied history while transforming it for the future.”
With the Paramount Q3 earnings now public, the question arises: Is the merger beginning to work, or is the company running in place?
Main details from the Paramount Q3 Report
Revenue Breakdown
- Total revenue steady at $6.7 billion, almost unchanged from last year.
- Direct-to-consumer revenue up 17%
- TV Media down 12%
- Filmed Entertainment is up 30% from the Skydance consolidation
Profitability
- Adjusted OIBDA: $952 million combined
- DTC OIBDA margin up to 18%
- TV Media OIBDA margin at 23%
Subscribers and ARPU
- Paramount+ revenue up 24%
- ARPU up 11%
- Paid subscriber reporting begins from Q4
Direct-to-Consumer Business is Paramount’s New Core
The strongest signal in the 2025 Paramount Q3 report is the health of the direct-to-consumer business.
Ellison emphasized streaming as Paramount’s new core, stating that the company is “increasing our investment in quality, exclusive programming” and expects DTC to be profitable for the full year 2025, with even stronger margin growth coming in 2026.
The DTC segment grew 17% in the quarter, driven by:
- Paramount+
- UFC expansion
- Higher ARPU from tier adjustments
It reflects the leadership’s belief that long-term growth depends on a global streaming foundation and not the traditional cable ecosystem.
TV Media is Paramount’s Biggest Challenge
While streaming shows promise, the Paramount Q3 2025 report reveals where the company continues to struggle.
TV Media fell 12% as:
- Advertising weakened
- Pay-TV subscriber volume decreased
- Content delivery timing hurt licensing revenue
CEO David Ellison acknowledged the structural challenge bluntly in the letter: “The overall linear ecosystem faces persistent headwinds.”
Despite this, CBS delivered strong moments, especially in the NFL, which had its best October in a decade. But these wins were not enough to offset the category’s decline.
The leadership sees CBS as a “flagship asset” but is realistic about the market shift.
The merger cannot reverse industry trends, but it can reallocate resources toward growth segments, exactly what the quarter shows.
Film Revenue Rose Due to Skydance but Reveals Weak Spots
Filmed Entertainment rose 30%, mainly because Skydance is now part of the consolidated financials. Yet the studio still has challenges.
- Many 2025 theatrical titles are expected to miss lifetime profit targets, which Ellison described as a reason for a full recalibration of the pipeline.
- But the studio plans to expand to 15 films per year by 2026, supported by deals with top creators and franchises, including the upcoming Call of Duty film.
This is where Skydance’s track record becomes a strategic advantage, because the company is known for efficient production and global franchises.
Is the Paramount Skydance Merger Working?
Early signals from the Paramount Q3 earnings reveal that the Paramount Skydance merger is “partially” working.
Even after the mass layoffs, the quarter does not declare victory, but it doesn’t show failure either. Here is the breakdown:
Signs of Early Success
- DTC is accelerating and posting solid margins.
- Paramount+ revenue and ARPU are growing consistently.
- Efficiency gains are running ahead of plan at more than 1.4 billion dollars already executed.
- Skydance boosts studio output and licensing revenue.
Ellison said they are “building a foundation for multi-year growth,” pointing to a forecast of 30 billion dollars in revenue for 2026, driven by streaming scale and improved cost alignment.
Signs of Problems
- TV Media’s continued decline remains a heavy drag.
- Film underperformance shows a need for a stronger slate.
- Free cash flow is being held back by transformation expenses.
- International bundle removals will hurt short-term net adds.
The merger appears to be stabilizing the business while powering up the long-term segments. But the transition is still underway, and Q4 earnings and early 2026 will reveal more.
Why Paramount Had No Choice but to Transform
Hollywood has hit this crossroads before.
- Disney reorganized around streaming in 2020.
- Warner Bros. Discovery fought through losses during its 2022 consolidation and faced 2025 Disney layoffs, too.
Paramount’s path mirrors the same pattern: absorb pain early to build stronger long-term economics.
The Skydance merger brought not only capital but leadership with both creative and technical expertise. This is why Ellison stressed that technology will “serve art, never the other way around.”
In a world defined by streaming algorithms and global distribution, that balance is essential.
Predictions: Where Paramount Goes From Here
Based on the Paramount Skydance Earnings and the patterns across the industry, the most likely outcomes are:
- Paramount+ ARPU rises sharply after the 2026 price increase.
- DTC becomes the company’s primary profit engine by 2027.
- TV Media keeps declining, but sports rights soften the impact.
- A larger, franchise-driven theatrical slate improves filmed entertainment margins.
- Free cash flow improves once restructuring costs fade.
This is the same roadmap followed by every legacy media company that successfully adapted to streaming.
Conclusion: What the Paramount Q3 Earnings Tell Us About the Road Ahead
The Paramount Q3 Earnings deliver a cautious but promising start to the post-merger era.
Flat revenue and a shrinking TV segment show that the old business model still weighs down the company.
But streaming growth, rising margins, and early efficiency gains indicate that the Skydance strategy is beginning to be effective.
Moreover, Paramount CEO David Ellison summed up the company’s mindset clearly: “We are building a foundation for growth and long-term transformation.”
The next few quarters will determine whether that foundation becomes a genuine turnaround or simply a temporary boost.
