Paramount Global Delivers Mixed Q1 Results: Streaming Gains Offset Traditional Media Struggles

Paramount Global (NASDAQ: PARA) reported its first-quarter 2025 financial results, revealing a nuanced performance marked by streaming momentum but persistent headwinds in its traditional TV Media segment. The company’s Non-GAAP EPS of $0.29 beat estimates by $0.03, while revenue of $7.19 billion topped expectations by $80 million, reflecting strategic wins and lingering challenges in a rapidly evolving entertainment landscape.

The Earnings Beat: A Closer Look

Despite the top-line and bottom-line beats, Paramount’s results underscored a stark divide between its streaming ambitions and declining legacy media businesses. The $7.19 billion revenue represented a 6.8% year-over-year decline, driven by a 7.5% drop in TV Media affiliate revenue and a 4% slide in advertising income compared to the prior-year quarter. The Super Bowl’s 2024 advertising tailwind, which inflated Q1 2024 results, created a tough comparison for Q1 2025.

The Non-GAAP EPS beat was fueled by cost discipline and streaming growth, though the company reported a net loss of $10.0 million under GAAP due to one-time tax adjustments and operational pressures. This contrast highlights the importance of excluding non-recurring items when evaluating Paramount’s financial health.

Streaming: The Growth Engine

Paramount+ remains the company’s crown jewel. While subscriber growth slowed after a 5.6 million addition surge in Q4 2024, the service’s Average Revenue Per User (ARPU) rose due to 2023 price hikes, boosting revenue. Q1 saw the return of hit series like Yellowjackets (Season 3) and 1923 (Season 2), the latter being Paramount+’s most-watched original premiere to date. New series like MobLand and Happy Face also debuted, signaling strong content momentum.

Analysts estimate Paramount+ added ~2 million net subscribers in Q1, bringing its global total to ~70 million. This growth, however, faces competition from Netflix, Disney+, and HBO Max, making content quality and pricing strategies critical to maintaining traction.

TV Media: A Declining Legacy

The TV Media segment, which includes CBS and Paramount Pictures, continues to struggle. Affiliate revenue fell 6.7% year-over-year in Q4 2024, with the decline accelerating in Q1 due to distributor contract renewals and the broader shift away from traditional pay TV. Advertising revenue also contracted, as the absence of Super Bowl ad revenue—a $200 million boost in Q1 2024—left a measurable gap.

Adjusted OIBDA (Operating Income Before Depreciation and Amortization) for TV Media dropped 15% year-over-year, underscoring the segment’s vulnerability to secular declines.

Balance Sheet Strength and Strategic Moves

Paramount’s real estate division, Paramount Group (NYSE: PGRE), provided a financial lifeline. The sale of a 45% stake in its 900 Third Avenue office building in January 2025 generated $94 million in net proceeds, bolstering liquidity. Meanwhile, the company’s $450 million revolving credit facility was amended to reduce debt covenants, offering flexibility amid uncertain markets.

Despite these moves, Paramount’s stock has underperformed peers like Fox Corporation (FOXA) by 20% year-to-date, reflecting investor skepticism about its ability to balance streaming growth with legacy media declines.

Outlook and Risks

Paramount reaffirmed its 2025 Core FFO guidance of $0.51–$0.57 per share, though it projected a full-year net loss of $0.36–$0.30 per share under GAAP. Management emphasized content investments—including a $4 billion 2025 production budget—as key to maintaining streaming competitiveness.

Risks remain, however. The $54 billion global streaming market faces saturation, and Paramount’s reliance on hit-driven content creates revenue volatility. Additionally, the $2.6 billion investment from Berkshire Hathaway in 2022 adds pressure to deliver returns.

Conclusion: A Hold with Long-Term Potential

Paramount Global’s Q1 results reflect a company in transition. While Paramount+’s ARPU growth and content-driven subscriber retention offer hope, the TV Media segment’s decline and broader market skepticism (embodied in its Zacks Rank #3 Hold rating) suggest caution.

Investors should weigh the positives:
- Streaming momentum: 70 million subscribers and premium content like 1923 and Yellowjackets
- Balance sheet strength: $4.1 billion in equity and strategic real estate sales
- Cost discipline: 21% reduction in Core FFO year-over-year, but narrowing losses

Against the negatives:
- TV Media drag: 15% OIBDA decline and shrinking advertising budgets
- Valuation: P/E ratio slightly above sector averages despite earnings headwinds

For now, Paramount’s mixed results warrant a Hold rating, with upside potential tied to streaming subscriber acceleration and a rebound in TV Media. Until those trends solidify, investors should proceed with patience—and a close eye on Q2’s content slate.