Paramount’s direct to consumer division swung to a profit of $49 million during the third quarter of 2024 – its second quarterly profit in a row – after adding 3.5 million subscribers for a total of 72 million.

But the company’s overall results were mixed, with total revenue falling 6% year over year, weighed down by a 71% decrease in theatrical revenue and 6% drop in TV Media revenue.

Here are the top-line results:

Net income: $16 million, compared to $261 million a year ago.

Adjusted Earnings Per Share: 49 cents per share, up 63% year over year, compared to 24 cents per share expected by analysts surveyed by Zacks Investment Research.

Revenue: $6.73 billion, down 6% year over year, compared to $6.92 billion expected by analysts surveyed by Zacks Investment Research.

Operating income: $337 million, down 46% year over year. On an adjusted basis, operating income rose 20% to $858 million.

Subscribers: Added 3.5 million subscribers during the quarter for a total of 72 million.

The latest quarterly results comes as the media giant’s pending $8 billion merger with Skydance Media is on track to close in the first half of 2025, subject to regulatory approval and customary closing conditions. Until then, Paramount continues to operate in the normal course of business.

It also comes as Paramount Global co-CEOs Brian Robbins, George Cheeks and Chris McCarthy are in the midst of cutting its U.S. workforce by 15%, or around 2,000 employees, aimed at generating $500 million in annual run rate cost savings.

Paramount’s direct-to-consumer division swung to a profit of $49 million, compared to a loss of $238 million a year ago, reflecting revenue growth and cost efficiencies. Total DTC revenue grew 10% to $1.86 billion, including an 18% increase in advertising revenue to $507 million, reflecting growth from Paramount+ and Pluto, a 7% increase in subscription revenue to $1.34 billion and a 150% increase in licensing revenue to $10 million. Paramount+ revenue grew 25% to $1.43 billion, driven by year-over-year subscriber growth and an 11% year over year increase in average revenue per user.

Paramount’s TV/media segment posted a profit of $936 million, down 19% from $1.15 billion a year ago. Total revenue for the segment fell 6% to $4.3 billion, primarily driven by lower affiliate revenue and fluctuations in licensing revenue. Advertising revenue fell 2% to $1.67 billion, reflecting declines in the linear advertising market, partially offset by higher political advertising, and the recognition of revenue underreported by an international sales partner in prior periods. Affiliate and subscriptions revenue fell 7% to $1.87 billion, 7%, driven by
subscriber declines and a 2-percentage point decrease from the absence of pay-per-view boxing events, partially offset by price increases. Licensing and other revenue decreased 12% to $760 million, reflecting a lower volume of licensing in the secondary market.

Paramount’s Filmed Entertainment segment swung to a profit of $3 million, compared to a loss of $49 million in the prior year period due to the Hollywood strikes. Total revenue fell 34% to $590 million. Advertising revenue fell 60% to $2 million. Theatrical revenue plunged 71% to $108 million, reflecting the number and timing of releases in the quarter compared to the prior year. Licensing and other revenue slipped 6% to $480 million, as lower revenue from home entertainment and the licensing of film library titles were partially offset by higher studio facility revenue compared to last year, which was impacted by the labor strikes.

More to come…