Skydance Corporation

In Q2, revenue and adjusted EBITDA were at or above the high end of prior guidance ranges. Adjusted EBITDA was $1.1 billion, up 27% year over year, while Studios adjusted EBITDA was $36 million versus a loss last year and Paramount+ revenue rose 16% year over year. Paramount+ ended the quarter with 81.6 million global subscribers, up 2 million in the quarter, and the company ended the quarter with $1.6 billion in cash and $3.2 billion of undrawn revolver capacity. For FY26, management raised adjusted EBITDA guidance to $3.8 billion-$3.9 billion and free cash flow conversion to at least 10% before transformation costs, while keeping $30 billion of revenue outlook in place. Q3 guidance calls for revenue of $6.95 billion-$7.15 billion, adjusted EBITDA of $875 million-$975 million, and Paramount+ subscribers to be relatively flat quarter over quarter.

David Ellison framed the quarter as evidence that the company’s three priorities are working: investing in storytelling, scaling direct-to-consumer globally, and driving efficiency. He emphasized momentum in Paramount+ content, live sports, and technology convergence, saying the service is growing revenue, improving profitability, and delivering better retention and engagement. His tone was confident and expansive, with repeated references to a stronger competitive position, a healthier studio pipeline, and optimism about both the business and the proposed WBD combination.

Dennis Cinelli focused on the financial execution and the path to higher conversion. He highlighted that revenue growth was led by DTC at 9% and Studios at 16%, with profitability up across all three segments, and said the company is now tracking to $2.7 billion of synergies realized through this year. He noted $1.6 billion in cash, $3.2 billion of revolver capacity, bridge fees of $8 million to $9 million per month plus a June 2027 commitment fee if the deal remains open, and an estimated $190 million of incremental financing if closing slips to June. He also said the company expects Q3 revenue growth to accelerate, with DTC and Studios driving the improvement and TV Media declines moderating.

Analysts pressed on transaction timing and possible burn costs, and management said financing is committed and liquidity is sufficient even if closing is delayed. On streaming, management said Paramount+ revenue grew 16%, there is room to expand both subscribers and ARPU, and DTC revenue should accelerate in the back half as ad and subscription trends improve. On convergence, management said the Pluto web experience is live and the full O&O rollout remains on track by end of summer, with early signs to watch including personalization, engagement, ad monetization and merchandising lift.