Paramount Skydance Q1 Guidance Falls Short

Paramount Skydance said in a Feb. 25, 2026 earnings release that its Q1 guidance fell short of analysts’ estimates as declines in traditional TV outpaced streaming gains, widening per-share losses and coinciding with a renewed takeover bid for Warner Bros. Discovery.

Quarter Results and Guidance

The company expects first-quarter revenue between $7.15 billion and $7.35 billion, below recent Street estimates, and full-year 2026 revenue of $30 billion. Management attributed near-term weakness to legacy pay-TV trends while maintaining a full-year target reliant on streaming growth.

Paramount’s TV Media unit generated $4.71 billion in fourth-quarter revenue, down 5% year-over-year due to softer advertising demand and lower affiliate fees. The company anticipates some revenue decline in this unit for 2026, "mostly in line with the industry headwinds around pay TV."

Total revenue for the period ended Dec. 31, 2025, was $8.15 billion. Filmed entertainment revenue rose 16% as Skydance licensing consolidated into the business. The company reported a diluted loss per share of 52 cents, wider than a 31-cent loss a year earlier, reflecting margin pressure amid revenue trends.

Paramount+ ended 2025 with 78.9 million paid subscribers. The company forecasts strong streaming growth in 2026 driven by additional subscribers, price increases, and the planned addition of the Ultimate Fighting Championship (UFC) to its exclusive lineup. Executives cited this consumer momentum as central to meeting the full-year outlook despite the early-year revenue shortfall.

Together, the quarter and guidance highlight immediate earnings pressure from the structural decline in linear television, even as management relies on streaming scale to support revenue for the year.

Warner Bros. Discovery Bid

Paramount submitted a revised $31-per-share offer for Warner Bros. Discovery, describing the bid as an accelerant to its turnaround plans. Warner Bros. Discovery’s board said the revised proposal could reasonably be expected to lead to a superior proposal compared with Netflix’s $27.75-per-share offer, while continuing to recommend the existing Netflix merger agreement.

The competing bid process adds strategic complexity as Netflix’s deal faces regulatory scrutiny from 11 states. Paramount’s management is balancing the immediate revenue drag from TV Media against bets on streaming growth and potential transformational scope if the deal proceeds. Investors will focus on how quickly Paramount can convert subscriber scale and pricing into sustainable margin gains amid the competing bids and guidance.