Paramount Skydance (PSKY) — Q2 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: Setup is mixed-to-cautious — consensus is a manageable bar on revenue (~$6.9B) but the bigger swing factor is DTC Adjusted OIBDA, where management pre-guided Q2 margin pressure from content slate launches; the wildcard is whether advertising momentum can offset that headwind faster than expected.

Heading into Q2 2026, the bar for Paramount Skydance is deliberately set low on profitability: management guided Q2 revenue roughly flat year-over-year and Adjusted OIBDA implying a mid-teens margin at the midpoint, explicitly flagging that DTC margins would face pressure in Q3 and Q4 as the content slate ramps — making Q2 a transitional quarter rather than a showcase. Consensus revenue of ~$6.87B (vs. $6.85B in Q2 2025) and Adjusted OIBDA of ~$876M reflect that cautious posture, and estimate revisions have been essentially flat since the Q1 print, suggesting the Street has largely accepted management's framing. The stock has declined roughly 26% since the Q1 earnings date (from ~$11.13 to ~$8.22 as of August 4), significantly underperforming both the S&P 500 (+5%) and the XLC Communications ETF (-4%), with the selloff accelerating in July as WBD deal financing uncertainty and broader media sector pressure weighed on sentiment. The most important swing factor for the print is the advertising trajectory: management guided for full-company ad revenue to return to growth in the back half of 2026, and Q2 will be the first real test of that inflection — peers Netflix, Google/YouTube (+13% YoY), and Amazon Ads (+26% YoY) all reported robust digital ad environments in Q2, which is a constructive read-through. The wildcard is the WBD deal close timing: with European and South Korean regulatory clearances received in July and the deal targeting a Q3 2026 close, any update on financing terms or close timing could move the stock more than the underlying Q2 operating results.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus sets a low bar on revenue (flat YoY) and a moderate bar on Adjusted OIBDA; Paramount+ ARPU is the bigger swing factor — the January price increase drove a 14% ARPU lift in Q1 and the Street expects continued momentum to ~$8.63 in Q2, while subscriber count is expected to be roughly flat as the company deliberately exits low-ARPU international bundles.

Table 1 — Current Quarter Snapshot (Q2 2026)

Source: Visible Alpha Consensus and Actuals Data. All consensus figures as of latest available (August 3, 2026). Q2 2026 guidance per Q1 2026 earnings call (May 4, 2026). EPS YoY decline reflects higher content investment and merger-related costs vs. prior year.

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs)

Top 2 KPIs: Revenue and Paramount+ ARPU

Pattern: PSKY has beaten on Paramount+ ARPU in 7 of the last 8 quarters, reflecting consistent pricing power; revenue beats are less consistent (5 of 8), with misses concentrated in quarters where TV Media revenue disappointed. Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Full-year guidance was reaffirmed at the Q1 print (May 4, 2026) with no subsequent changes; management tone is execution-focused on the WBD deal close while flagging DTC margin pressure in Q3/Q4 as the content slate launches — a deliberate sandbagging of near-term expectations.

Source: Q1 2026 Earnings Call transcript (May 4, 2026); MoffettNathanson Media, Internet & Communications Conference transcript (May 13, 2026); PSKY 8-K filings (June–July 2026); Visible Alpha Consensus Data.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have been essentially stable since the Q1 print — revenue and OIBDA consensus are within 1% of where they stood on May 9, 2026 — indicating the Street has accepted management's guidance framework with minimal revision activity; DTC OIBDA estimates have drifted slightly higher (+3% for Q2), suggesting modest optimism on streaming profitability despite the flagged content headwinds.

Source: Visible Alpha Consensus and Actuals Data. Baseline as of May 9, 2026 (5 trading days post Q1 2026 earnings). Current consensus as of August 3, 2026. The near-zero revision activity across all KPIs since the Q1 print confirms the Street is anchored to management's guidance framework; the slight upward drift in DTC OIBDA estimates (+2.8% for Q2) is the only notable divergence and represents modest optimism on streaming margin execution.

5. Stock Performance

Key Takeaway: PSKY has declined ~26% since the Q1 earnings date (May 4, 2026), dramatically underperforming the S&P 500 (+5%) and the XLC Communications ETF (-4%); the selloff is driven by multiple compression and deal uncertainty rather than estimate cuts, as consensus has barely moved — suggesting the stock is pricing in execution risk on the WBD deal rather than fundamental deterioration.

PSKY vs. XLC (Communications ETF) vs. S&P 500 (SPY) — Indexed to 100 at May 4, 2026 (Q1 2026 Earnings Date). Source: Stock Price Data.

Sector ETF: XLC (Communication Services Select Sector SPDR ETF) — appropriate for PSKY given its classification as a media/entertainment company within the Communication Services sector.

• May 4–13, 2026: Stock fell from $11.13 to $10.47 (-6%) in the two weeks post-Q1 earnings despite the beat, as investors focused on the flagged DTC margin pressure in H2 and WBD deal financing complexity.
• May 13, 2026: CFO Dennis Cinelli presented at MoffettNathanson Conference, reaffirming guidance and providing detail on WBD deal financing ($10B permanent capital placed, bridge syndicated to ~18 banks). Stock stabilized briefly.
• May 13, 2026: PSKY filed an 8-K recasting late 2025 segment data for new reporting structure, providing transparency on the post-merger segment framework.
• June 17–July 22, 2026: Series of regulatory clearances for WBD deal (EU, South Korea, additional jurisdictions) filed via 8-K. Despite positive deal news, stock continued to decline from ~$10 to ~$8.78, suggesting market skepticism on deal economics or financing terms.
• July 20–23, 2026: New board elected via written consent (8-K filed July 23); stock hit ~$8.49, near multi-month lows. Broad media sector weakness (XLC -4% over the period) amplified PSKY-specific pressure.
• July 31, 2026: PSKY and WBD filed merger-related pro forma financials (8-K), providing the first combined entity financial picture. Stock closed at $7.96, down ~28% from the Q1 earnings date.

6. Peer Commentaries — Read-Through for Q2 2026

Key Takeaway: Peer Q2 2026 earnings calls (Netflix, Disney, Google/YouTube, Amazon, Fox/Roku) collectively paint a constructive backdrop for PSKY's Q2 print: digital advertising is robust, streaming ARPU pricing power is holding, and live sports is proving to be a powerful subscriber acquisition and retention tool — all directly relevant to PSKY's key debates. The one cautionary note is that linear TV continues to structurally decline, which remains a headwind for TV Media revenue.

Netflix (NFLX) — Q2 2026 Earnings Call (July 16, 2026)

Read-Through Relevance: High — directly validates PSKY's ARPU pricing strategy and advertising trajectory.

• Pricing power intact: Netflix reported "healthy acquisition and retention trends" and stated that "recent price adjustments are going well," with results "consistent with prior price changes" in markets including the US, Mexico, and Spain. This is a strong read-through for PSKY's January 2026 Paramount+ price increase, which management said was "performing at expectations" at the Q1 print and the MoffettNathanson Conference. If Netflix's price increases are holding without material churn, PSKY's ARPU trajectory to ~$8.63 in Q2 is credible.
• Advertising demand strong: Netflix noted "strong advertiser demand" and that the gap between ad-tier ARPU and standard ARPU "is narrowing," representing "near-term under-realized revenue growth." Netflix is expanding its ad tech stack and adding measurement tools. This is a positive read-through for PSKY's DTC advertising business, which returned to growth in Q1 and is expected to accelerate in H2 2026.
• Live sports as subscriber acquisition engine: Netflix stated that "six out of top ten new member sign-up days over the past five years have come from live events." This directly validates PSKY's UFC investment thesis — management cited UFC as driving meaningfully younger subscribers who engage with broader platform content. If live sports is driving disproportionate sign-ups at Netflix, the same dynamic should be visible in PSKY's Q2 subscriber data.
• Short-form video incremental: Netflix described video podcast viewing as "definitely incremental" and "out-indexing on mobile," particularly in daytime viewing. PSKY launched short-form vertical video clips on Paramount+ in April as a beta test — Netflix's early positive data on this format is a constructive read-through for PSKY's engagement strategy.
• Content spend discipline: Netflix is "forecasting content expense up about 10% this year" while growing revenue faster, maintaining the discipline of growing content spend slower than revenue. PSKY's increased content investment (15 films in 2026 vs. 8 in 2025) is the primary driver of the flagged DTC margin pressure in H2 — Netflix's framework suggests this is a manageable trade-off if content drives engagement.

Walt Disney (DIS) — Q2 FY2026 Earnings Call (May 6, 2026)

Read-Through Relevance: High — closest structural peer on streaming profitability inflection and content-as-flywheel strategy.

• Streaming profitability milestone: Disney reported "double-digit SVOD entertainment margins in Q2 2026" and noted that streaming revenue is now "more than double" linear revenue at Disney Entertainment. This is a significant read-through for PSKY's DTC profitability trajectory — if Disney has achieved double-digit streaming margins, PSKY's path to sustained DTC profitability (achieved full-year in 2025) is credible, though PSKY's content investment ramp in H2 will temporarily compress margins.
• Subscription revenue driven by rate and volume: Disney reported "sequential acceleration in revenue growth from 11% in Q1 2026 to 13% in Q2" with subscription revenue growth "driven by both rate and volume" and "double-digit advertising revenue growth." This is a direct positive read-through for PSKY's DTC revenue consensus of $2.498B (+10.3% YoY) — the industry is demonstrating that both pricing and subscriber growth can coexist.
• Churn reduction as the biggest value driver: Disney called reducing churn on Disney+ "the single most significant opportunity" to drive value. PSKY's integrated platform convergence (BET+, Pluto TV, Paramount+ on one tech stack, targeted for summer 2026) is directly aimed at the same goal — better recommendation and discovery to reduce churn.
• Short-form and vertical video: Disney introduced vertical video on Disney+ and the ESPN app, noting "early performance has been really promising." PSKY launched the same format on Paramount+ in April — Disney's positive early data validates the strategic direction.
• Theatrical-to-streaming flywheel: Disney highlighted Zootopia 2 ($1.9B global box office) with the franchise surpassing 1 billion hours streamed on Disney+, validating the theatrical-to-streaming flywheel. PSKY's strategy of 15 theatrical films in 2026 (vs. 8 in 2025) and the combined 30-film slate post-WBD close is built on the same thesis.

Google / YouTube (GOOGL) — Q2 2026 Earnings Call (July 22, 2026)

Read-Through Relevance: Medium-High — validates digital advertising environment and CTV ad demand heading into PSKY's Q2 print.

• YouTube ads +13% YoY: YouTube advertising revenues grew 13% to $11.1B in Q2 2026, "driven by direct response advertising as well as brand with strength in the living room." Total Google advertising revenues were up 14% with "growth across all major verticals." This is a strong positive read-through for PSKY's advertising business — if the largest digital ad platform is seeing broad-based strength, PSKY's DTC ad business (which returned to growth in Q1) should benefit from the same tailwind.
• World Cup ad boost: Google cited "strong ad growth related to the World Cup, particularly in YouTube ads." The FIFA World Cup 2026 was the "most viewed World Cup in YouTube history" with 1.7 billion unique viewers. This is a potential read-through for PSKY's CBS and Paramount+ sports advertising — major live sports events drove premium ad demand across platforms in Q2.
• CTV momentum: YouTube highlighted "continued momentum across both brand and direct response" in the living room (CTV). Connected TV ad spend as a proportion of total TV ad spend has grown from 25% to 41% in recent years (per Fox/Roku commentary). PSKY's Pluto TV (ad-supported) and Paramount+ ad tier are direct beneficiaries of this structural shift.
• AI-powered ad tools driving efficiency: Google's AI-powered ad campaigns (Imax/Pmax) are delivering "15% more conversions or value at a similar ROAS." PSKY's Precision+ AI ad tool is positioned to capture similar efficiency gains — Google's data validates that AI-powered ad targeting is delivering measurable ROI for advertisers, which should support demand for PSKY's premium ad inventory.

Amazon (AMZN) — Q2 2026 Earnings Call (July 30, 2026)

Read-Through Relevance: Medium — validates live sports advertising demand and multi-sport advertiser strategies.

• Amazon Ads +26% YoY: Amazon Ads generated $19.8B in revenue, up 26% YoY, with "continued growth in engagement in Prime Video ads and live sports." NBA inventory on Prime Video "sold out," and advertisers activating across multiple sports saw "2.3x higher unduplicated reach." This is a direct positive read-through for PSKY's UFC advertising — management cited UFC as a "meaningful contributor to Q1 advertising results," and Amazon's data confirms that live sports on streaming platforms commands premium, sold-out ad inventory.
• Multi-sport advertiser strategies: Amazon noted that "brands activating across multiple sports" are driving "12% higher spend and 17% more orders." PSKY's portfolio of UFC, NFL (via CBS), UEFA Champions League, and (post-WBD) NASCAR and TNT Sports positions it as a multi-sport platform — Amazon's data suggests advertisers are willing to pay a premium for this breadth.
• Live sports viewership shift from broadcast: Amazon's NBA on Prime Video peaked at "6.5 million US viewers for game seven of the Eastern Conference semifinals, outperforming game seven on broadcast a year ago." This confirms the ongoing shift of live sports viewership from linear to streaming, which is both a headwind for PSKY's TV Media segment and a tailwind for Paramount+.

Fox Corporation (FOX) — Acquisition of Roku Conference Call (June 15, 2026)

Read-Through Relevance: Medium — validates CTV advertising structural growth and the strategic value of live sports + streaming platform combinations.

• CTV ad spend share surging: Fox/Roku noted that connected TV ad spend as a proportion of total TV ad spend has grown "from 25 to 41%" in recent years and "that trend just continues." This structural shift directly benefits PSKY's Pluto TV (FAST) and Paramount+ ad tier, which are positioned to capture CTV ad dollars migrating from linear.
• Tubi approaching $1.5B revenue at +25% growth: Fox's Tubi is on track for "revenue approaching $1.5B in fiscal 2026" with "top line growth of approximately 25%." Tubi is the closest direct competitor to PSKY's Pluto TV in the FAST space. Tubi's strong growth validates the FAST advertising model but also highlights the competitive pressure on Pluto TV, which has faced monetization challenges despite growing VOD engagement.
• Consumer preference for aggregation: Fox/Roku highlighted a "clear consumer preference for aggregation" and "rebundling of services," with consumers subscribing to "an estimated four services on average." This validates PSKY's platform convergence strategy (BET+, Pluto TV, Paramount+ on one stack) and the WBD deal rationale of creating a larger, more complete streaming bundle.
• Live news and sports as premium ad inventory: Fox emphasized that live news and sports "command premium advertising rates" and "drive appointment viewing." CBS's NFL franchise and PSKY's UFC partnership are positioned in the same premium live content category — Fox's strategic conviction here validates PSKY's content investment priorities.

7. Material News & Developments

Key Takeaway: The most important development since the Q1 print is the rapid progression of WBD regulatory clearances — with EU, South Korean, and other key jurisdictions cleared in June–July 2026, the deal is on track for Q3 2026 close, which will be the dominant topic on the Q2 earnings call.

• July 31, 2026 — WBD/PSKY Pro Forma Financials Filed (8-K): PSKY and WBD filed merger-related financial statements and unaudited pro forma financial information with the SEC, providing the first public look at the combined entity's financials. This is a critical data point for investors modeling the post-close capital structure and synergy potential. Implication: Expect management to reference these pro forma figures on the Q2 call to frame the combined company's financial profile.
• July 23, 2026 — New Board Elected (8-K): Paramount Skydance shareholders elected a new board of directors via written consent, including David Ellison, Andrew Brandon-Gordon, Barbara Byrne, Andrew Campion, Gerald Cardinale, Safra Catz, Justin Hamill, Sherry Lansing, Paul Marinelli, and John Thornton. PricewaterhouseCoopers LLP ratified as auditor for FY2026. Implication: Board composition reflects the Skydance-led governance structure; no surprises.
• July 22, 2026 — WBD Merger Clears European and South Korean Regulatory Hurdles (8-K): Key regulatory clearances received, bringing the deal materially closer to close. Implication: With major jurisdictions cleared, the Q3 2026 close target appears achievable; remaining approvals are likely smaller markets.
• June 30, 2026 — Additional Regulatory Approvals Received (8-K): Further international regulatory clearances for the WBD merger. Implication: Steady drumbeat of approvals reduces deal close risk.
• June 17–22, 2026 — Multiple Antitrust Approvals Secured (8-Ks): PSKY filed multiple 8-Ks reporting antitrust clearances across key jurisdictions. Implication: Regulatory risk is substantially de-risked; deal financing and integration planning are now the primary execution risks.
• June 15, 2026 — Fox Announces Acquisition of Roku: Fox agreed to acquire Roku, creating a combined CTV platform with 100M+ households and a scaled ad platform. Implication: Competitive pressure on PSKY's Pluto TV (FAST) and Paramount+ ad tier intensifies; the Fox-Roku combination will be a formidable competitor in CTV advertising. However, it also validates the strategic logic of PSKY's WBD deal — scale matters in streaming.
• May 13, 2026 — Segment Data Recast (8-K) and MoffettNathanson Conference: PSKY recasted late 2025 segment data for the new reporting structure (Studios, DTC, TV Media). CFO Dennis Cinelli presented at MoffettNathanson, reaffirming full-year guidance, providing WBD deal financing detail ($10B permanent capital, bridge to ~18 banks), and highlighting Paramount+ ARPU +14% in Q1 and subscriber growth +17% YoY. Implication: Management tone was confident and execution-focused; no negative surprises.
• No analyst rating changes found for PSKY in the period (May 4 – August 3, 2026).

8. Insider Transaction Activity

Key Takeaway: All insider transactions since the Q1 print are RSU vesting events (M-code conversions) and tax withholding (F-code disposals) — there are no open-market buys or discretionary sales (P/S codes). The absence of any open-market buying by insiders at the current depressed price level (~$8, down 26% from Q1 earnings) is notable but not alarming given the WBD deal blackout period dynamics.

Source: SEC Form 4 filings via Insider Transaction Data. All transactions are RSU vesting events (M-code) or tax withholding disposals (F-code) — none are open-market buys (P-code) or discretionary sales (S-code). The absence of open-market buying at current depressed price levels (~$8, down ~26% from Q1 earnings) is notable; however, insiders are likely subject to trading blackout restrictions ahead of the Q2 earnings release and potentially during the WBD deal close process. No 10b5-1 plan initiations were filed in the period. The overall insider picture is neutral — no alarming discretionary selling, but also no conviction buying signal.

— End of Report —