Paramount Global Q2 Results: DTC Growth Outpaces Expectations Amid Merger Talks

Paramount Global reported Q2 earnings that exceeded expectations, with DTC revenues growing 15% YoY to $2.16 billion. TV Media revenue dropped 6% to $4.01 billion, and Filmed Entertainment revenue rose 2% to $690 million. Despite the strong DTC growth, analyst opinions remain divided, with one analyst reiterating a "Buy" rating and six maintaining a "Hold" rating. The company is set to merge with Skydance Media this week, and the combined entity will trade under the ticker symbol "PSKY."

Paramount Global (NASDAQ: PARAA) reported its second-quarter 2025 earnings, with adjusted earnings per share (EPS) of $0.46, surpassing analysts' expectations of $0.44. This resulted in a significant spike in trading volume by 117% to approximately 64,075 shares [4]. Despite the positive earnings report, Seaport Res Ptn downgraded Paramount Global's shares from a "hold" rating to a "strong sell," indicating potential concerns among analysts regarding the stock's future performance [4].

Key highlights from the Q2 report include:
- Direct-to-Consumer (DTC) Revenues: Increased 15% year over year (YoY) to $2.16 billion. This growth was driven by strong revenue growth and improved profitability in the DTC segment, with Paramount+ ranking second in the United States for Top 10 SVOD Originals year to date [1].
- TV Media Revenues: Declined 6% YoY to $4.01 billion. The decrease was primarily due to ongoing declines in affiliate and advertising revenues, which decreased 7% and 4% respectively [1].
- Filmed Entertainment Revenues: Rose 2% YoY to $690 million. Theatrical revenues increased 84% to $254 million, reflecting the release of Mission: Impossible – The Final Reckoning, which earned more than $590 million at the global box office to date [1, 2].

Analyst opinions remain divided on Paramount Global's performance. One analyst reiterated a "Buy" rating, while six maintained a "Hold" rating. The company is set to merge with Skydance Media this week, and the combined entity will trade under the ticker symbol "PSKY" [3].

The merger with Skydance Media, set to close on August 7, is expected to bring significant changes to Paramount's streaming strategy. The new management may alter streaming investment and potentially boost profits. However, the company has not provided details on how the merger will impact streaming subscriber losses or overall financial performance [3].

In summary, Paramount Global's Q2 results demonstrate a mixed bag of performance. While the company shows strong growth in DTC revenue and a robust subscriber base for Paramount+, the reliance on linear TV and the muted streaming subscriber trend pose challenges. Investors and financial professionals should closely monitor the upcoming Skydance integration and the new management's strategy to gauge the company's future prospects.

References:
[1] https://finance.yahoo.com/news/paramount-global-q2-earnings-beat-164800670.html
[2] https://www.mediaplaynews.com/paramounts-licensing-other-q2-segment-revenue-dropped-19-to-434-million/
[3] https://www.ainvest.com/news/paramount-q2-results-streaming-profits-offset-declining-tv-revenue-subscriber-losses-linger-2508/
[4] https://www.marketbeat.com/instant-alerts/paramount-global-nasdaqparaa-sees-strong-trading-volume-after-earnings-beat-2025-08-01/