Paramount Global’s Q1 2025 Earnings: A Streaming Turnaround in the Making?

Paramount Global delivered a strong first quarter of 2025, defying industry headwinds with robust financial results and strategic progress. The media giant reported EPS of $0.29, beating estimates by 7.4%, while revenue rose to $7.19 billion, exceeding forecasts. The star of the quarter was Paramount+, which now boasts 79 million global subscribers, a 11% year-over-year jump, fueled by hit series like Landman and Mobland. This performance has investors and analysts alike asking: Is Paramount finally turning the corner in its streaming battle?

The Streaming Breakthrough

Paramount’s direct-to-consumer (D2C) segment, led by Paramount+ and Pluto TV, is the clearest indicator of its strategic shift. D2C revenue grew 9% year-over-year to $2.0 billion, with Paramount+ subscription revenue rising 16% thanks to higher average revenue per user (ARPU) and improved churn rates. The company narrowed its D2C operating loss to $109 million, a $177 million improvement from a year earlier. Management reiterated its goal of achieving domestic profitability for Paramount+ by 2025, a milestone that could mark a turning point for the company’s financial health.

Investors have already priced in optimism: Paramount’s stock rose 0.95% on the earnings news, closing at $11.57, and remains near its 52-week high of $13.40. Analysts at InvestingPro labeled the stock undervalued, citing a Financial Health Score of 2.24 (out of 5) and strong momentum metrics.

Content as the Growth Engine

Paramount’s content strategy is its secret weapon. The company is prioritizing “fewer, bigger” hits—like Mobland, which became its biggest global series launch ever—and leveraging its iconic IP. The Yellowstone franchise continues to dominate, with The Dutton Ranch and The Marshals set to expand its reach. Meanwhile, films like Sonic the Hedgehog 3 ($500 million box office) and Gladiator 2 (Paramount+’s most-streamed movie) highlight the power of its library.

Management also emphasized cost discipline. Average film production costs have dropped 35% over two years, while Pluto TV’s global viewing time surged 26% despite ad revenue headwinds. This focus on efficiency is critical as Paramount competes with streaming giants like Netflix and Disney+.

Challenges Ahead

Despite the optimism, risks linger. Pluto TV faces advertising supply pressures, with digital ad inventory oversupply depressing revenue. Linear TV affiliate revenue declined 8.6% due to pay TV subscriber losses, a trend unlikely to reverse. Additionally, macroeconomic uncertainty could impact advertising budgets and consumer spending.

Paramount’s broadcast crown jewel, CBS, remains a stabilizing force. As the most-watched network for 17 straight years, it generated $922 million in OIBDA, supported by sports like the NCAA Final Four and primetime hits like FBI. Yet CBS’s affiliate revenue decline underscores the broader shift to streaming.

The Skydance Gamble

Paramount’s pending acquisition of Skydance Media, expected to close in early 2025, adds another layer of intrigue. Skydance’s hit-driven content (e.g., Mission: Impossible, Top Gun) could amplify Paramount’s library and boost streaming exclusives. However, execution risks remain, including integration challenges and the need to justify the valuation.

Investor Takeaways

1. Streaming Progress: Paramount+’s subscriber growth and narrowing losses suggest it’s on track to meet its 2025 profitability target.
2. Content Leverage: The company’s focus on high-margin franchises (Yellowstone, Mission: Impossible) and cost efficiencies positions it to outperform peers.
3. Valuation Opportunity: At a stock price near its 52-week high but still below pre-pandemic levels, investors see room for upside if growth targets are met.

Conclusion: A Streaming Story Worth Watching

Paramount Global’s Q1 2025 results are a compelling case of resilience. With Paramount+ subscriber growth outpacing rivals like Disney+ (up 11% vs. Disney’s 5% growth in recent quarters), and a content slate packed with proven hits, the company is positioning itself to capitalize on the streaming boom. While risks like ad supply pressures and linear declines persist, the path to domestic streaming profitability is clearer than ever.

Investors should note the $1.44 EPS forecast for 2025—a 34% increase from 2024’s $1.07—and the stock’s undervalued status. With the Skydance acquisition on deck and a focus on multiplatform IP, Paramount’s story isn’t just about surviving the streaming wars—it’s about winning them. For now, the verdict is in: this quarter’s results are a green light for growth.

Stay tuned as the second half of 2025 brings Mission: Impossible – The Final Reckoning and the next chapter of Yellowstone—both potential catalysts for further subscriber gains.