Skydance Corporation

SKYD · NYSE · USD

Can Paramount+ and the rebuilt studios grow fast enough to offset linear television's decline, and can the Warner Bros. Discovery deal close without straining the balance sheet?

Last 4 earnings calls · through Q2 FY2026

Bull case

  • Streaming scale and pricing

    The bull case is that Paramount+ can keep adding subscribers while raising prices, because its content spend is still small next to the larger streamers.

  • Studio output rebuild

    Rebuilding the film and television studios is the second leg, on the view that more releases and better marketing turn a weak slate into a profit driver.

  • Cost synergies and cash

    A third strand is cost: merging the two companies is meant to remove duplication, and management ties those savings to higher profit and to more cash left after spending.

  • Live sports rights

    Owning year-round combat sports and broadcast sports rights is expected to hold viewers through the summer and to support both subscription and advertising revenue.

Bear case

  • Linear television decline

    The bear case is that advertising and carriage revenue from broadcast and cable fall faster than streaming and studios grow, leaving total revenue close to flat.

  • Thin free cash flow

    Another concern is that heavy content spending and deal costs leave little cash after capital needs, and net debt has risen since the merger closed.

  • Warner deal execution

    A third worry is that buying Warner Bros. Discovery adds a second large integration, a courtroom fight and financing costs before any promised scale arrives.

  • Subscale streaming

    Streaming remains far smaller than the largest rivals, so the company must spend on content and technology without the audience needed to spread those costs.

Bull and bear points

Growth & Execution

In short: Streaming and studio revenue grow quickly while total revenue stays nearly flat as linear declines.

Bull · 2

  • Paramount+ grows revenue from both subscribers and price

    Paramount+ revenue grew 16%, roughly two-thirds from higher revenue per user and one-third from subscriber growth, so pricing rather than discounting is producing the increase.

    Q2 FY2026 call

  • Studios move from rebuild to profit growth

    Management described the film studio a year ago as being in a rebuild phase; it now says segment profit is improving, that the second half holds eight more releases, and that the gain should last beyond one quarter.

    Tone shiftQ4 FY2025 → Q2 FY2026
Bear · 2

  • Total revenue growth stays near zero as linear TV shrinks

    Company revenue grew 0.9% in the quarter even with streaming and studios up double digits, because TV Media advertising fell 14%, so the growing segments are still outrun by the decline.

    Q2 FY2026 call

  • Pluto advertising monetization remains a drag

    Pluto was again a drag on streaming revenue in the second quarter, and the fix depends on a platform relaunch and new advertising leadership whose payoff is not yet proven.

    Q2 FY2026 call

Profitability & Financial Strength

In short: Segment profit is rising and margins expanded, while free cash flow is thin and net debt has grown.

Bull · 2

  • Profit rises in all three segments at once

    Operating margin widened to 6.9% and adjusted EBITDA grew 27% to $1.1 billion, with profit up in every segment, which shows cost cuts landing faster than the linear decline.

    Q2 FY2026 call

  • Free cash flow guidance raised on cost discipline

    In November management expected reported free cash flow to be negative in 2026 because of transformation costs; it now guides to at least 10% conversion before those costs and reports positive cash flow for the year.

    Tone shiftQ3 FY2025 → Q2 FY2026
Bear · 2

  • Free cash flow is thin and fell year over year

    Free cash flow over the last twelve months was $440 million, or 1.5% of revenue and below the prior year, and the expanded film slate raises content spending from here.

    Filed financials

  • Net debt rose and deal costs keep accruing

    Net debt is $13.5 billion versus $11.8 billion a year earlier, and a delayed Warner closing adds a quarterly ticking fee of about $650 million plus fees on the bridge financing.

    Q2 FY2026 call

Market Position

In short: CBS and sports aid carriage deals, but the company is subscale and the Warner deal is in litigation.

Bull · 2

  • CBS and streaming credentials are needed by distributors

    Affiliate and subscription fees are the largest revenue line at $3.5 billion in the quarter, and management says renewal talks are going well because distributors want Paramount+ bundled with CBS and the cable channels.

    Q2 FY2026 call

  • UFC and NFL rights lift advertising demand

    UFC events set streaming records and management says advertising demand exceeded expectations, and it intends to keep buying sports rights because they hold viewers across the whole year.

    Q2 FY2026 call
Bear · 2

  • Warner closing slips from September into litigation

    Management said in May it was on track to close by September; it now faces a trial set for March and says it is open to a settlement, while paying ticking fees if closing runs past September 30.

    Tone shiftQ1 FY2026 → Q2 FY2026

  • Cable and broadcast advertising keeps shrinking

    Advertising still brings in $2.0 billion a quarter in TV Media, so accelerating cable declines across the industry mean the linear business funds less of the streaming investment each year.

    Q3 FY2025 call