Skydance Corp.: Q2 FY2026 earnings call

The filings did not come through on the latest nightly rebuild, so these figures are as published on 25 October 2026. The page is rebuilt every night.

What management said about Q2 FY2026, from the documents filed with the SEC on 4 August 2026: press release. Guidance figures: 3 raised, 6 new, 5 kept. The quarter’s numbers.

Key takeaways

Adjusted EBITDA up 27%: Adjusted EBITDA was $1.1 billion at a 15.9% margin, up 27% year-over-year, with profitability higher in all segments. Source
TV Media revenue down 9%: TV Media revenue fell 9% to $3.1 billion, while TV Media adjusted EBITDA reached $1.1 billion at a 34.0% margin. Source
Paramount+ reached 81.6 million subscribers: Paramount+ added about 2 million subscribers in Q2, ahead of expectations, to reach 81.6 million worldwide. Source
TV Media production costs down nearly 10%: Average production cost per episode fell nearly 10% for the 2025-2026 broadcast season, while TV Media's share of the top 20 series increased. Source
Upfront commitments grew double digits: The Upfront delivered double-digit growth in commitments and was the largest since the CBS-Viacom merger, management said. Source

“One year in, we are proud of the progress we’ve made and confident in our strategy. These results are a testament to our people, whose hard work and dedication have made them possible.”
David Ellison, Chairman & CEO

Guidance

Area	Period	Figure	Against last quarter
Total revenue Source	Q3 2026	$6.95 billion to $7.15 billion	New
Adjusted EBITDA Source	Q3 2026	$875 million to $975 million; 13.1% margin at midpoint; approximately $70 million stock-based compensation	New
Paramount+ subscribers Source	Q3 2026	flattish quarter-over-quarter	New
Direct-to-Consumer margin Source	Q3 2026	mid- to high-single-digit margin	New
Transformation costs Source	Q3 2026	roughly $200 million	New
Total revenue Source	2026	$30 billion, 4% growth year-over-year	Kept
Adjusted EBITDA Source	2026	$3.8 to $3.9 billion; 12.8% margin at midpoint	Raised from $3.8 billion
Free cash flow conversion Source	2026	at least 10%, before roughly $800 million of transformation costs	Raised from approximately 5%
Run-rate efficiencies Source	by end of 2026	over $2.7 billion	Raised from $2.5 billion
Efficiencies from Skydance-Paramount combination Source	not stated	$3 billion-plus	Kept
Corporate expenses Source	2026	approximately $1.5 billion	New
Total paid subscribers Source	2026	modestly higher than 2025, including approximately 4 million strategic international hard bundle exits	Kept
Studios profitability Source	2026	increase versus 2025	Kept
DTC profit Source	2026	growth versus 2025; weighted to first half	Kept

What changed from last quarter

Guidance raised: Full-year adjusted EBITDA raised to $3.8 to $3.9 billion from $3.8 billion. Source
Guidance raised: Free cash flow conversion raised to at least 10% from approximately 5%. Source
Guidance raised: Run-rate efficiencies by end-2026 raised to over $2.7 billion from $2.5 billion. Source
Guidance raised: TV Media 2026 margin wording moved from stable-to-improving to improving, with adjusted EBITDA growth now expected. Source
New guidance: First guidance for Q3 2026 revenue, adjusted EBITDA and Paramount+ subscriber trend. Source
Guidance kept: Full-year 2026 total revenue expectation of $30 billion was kept. Source
New: Paramount Games launched in June as a publisher and incubator for interactive entertainment. Source
Ended: BET+ was fully integrated into Paramount+ during Q2, as a standalone service ended. Source
New: The first phase of streaming technology convergence is underway, along with the Clips feature. Source
New: Regulators and governments in 65 jurisdictions have cleared the WBD transaction or elected not to challenge it. Source

Quarter results and growth drivers

Revenue up 1%, led by DTC and Studios: Q2 revenue was $6.9 billion, up 1% from $6.8 billion a year earlier, with DTC and Studios growth partly offset by a TV Media decline. Source
Operating income and transaction costs: Operating income was $475 million, a 6.9% margin, including $153 million of transaction-related costs tied to the planned WBD combination. Source
Adjusted EBITDA up 27%: Adjusted EBITDA was $1.1 billion at a 15.9% margin, up 27% year-over-year, with profitability higher in all segments. Source

Segment performance

DTC adj. EBITDA up 44%: DTC revenue rose 9% to $2.5 billion, and DTC adjusted EBITDA was $366 million, a 14.8% margin, up 44% from a year earlier. Source
Studios adj. EBITDA turned positive: Studios revenue rose 16% to $1.3 billion, and adjusted EBITDA was $36 million, a 2.7% margin, against negative $31 million a year earlier. Source
TV Media revenue down 9%: TV Media revenue fell 9% to $3.1 billion, while TV Media adjusted EBITDA reached $1.1 billion at a 34.0% margin. Source
Advertising declines from lapping and sales: Advertising fell 14%, including about eight points from lapping NCAA Final Four advertising and three points from sales of Telefe and Chilevision, partly offset by political. Source

“We fully expect the transaction to close and remain focused on preparing for a successful combination once it is complete.”
David Ellison, Chairman & CEO

Paramount+ subscribers and engagement

Paramount+ reached 81.6 million subscribers: Paramount+ added about 2 million subscribers in Q2, ahead of expectations, to reach 81.6 million worldwide. Source
Churn at lowest level in service history: Management said the programming slate, including UFC, FIFA World Cup and Originals, contributed to Q2 having the lowest churn in Paramount+ history. Source
Paramount+ revenue up 16% on ARPU: Paramount+ revenue grew 16% year-over-year, reflecting subscriber growth of about 6% and average revenue per user growth of about 12%. Source
UFC and Dutton Ranch drew large audiences: UFC Freedom 250 drew 17 million viewers across the U.S. and Latin America, while Dutton Ranch drew 12.9 million viewers in its first week. Source
Engagement grew double digits: Management described programming as driving subscriber additions and double-digit growth in total engagement during the quarter. Source

Costs, efficiencies and margins

TV Media production costs down nearly 10%: Average production cost per episode fell nearly 10% for the 2025-2026 broadcast season, while TV Media's share of the top 20 series increased. Source
Enterprise systems moving to Oracle Fusion: Additional divisions went live on Oracle Fusion in July, and the company plans to move onto one unified ERP system by early next year. Source
AI tools used across most of workforce: Enterprise apps for procurement, recruiting, finance and HR are being built in-house with AI tools, with the majority of the workforce using them. Source

“Looking ahead, we will build on this momentum and grow our business by investing in great storytelling, better serving audiences, and operating more efficiently to create long-term value for shareholders.”
David Ellison, Chairman & CEO

Advertising and upfront demand

Upfront commitments grew double digits: The Upfront delivered double-digit growth in commitments and was the largest since the CBS-Viacom merger, management said. Source
Digital ad growth expected to accelerate: Management continues to expect digital advertising growth to accelerate in the back half of 2026, supported by the Upfront. Source
Paramount+ ad revenue up over 30%: DTC advertising revenue grew 8% year-over-year, with Paramount+ advertising revenue growing over 30% in the quarter. Source

Warner Bros. Discovery combination

Regulatory clearances in 65 jurisdictions: Management said regulators in 65 jurisdictions have cleared the transaction or elected not to challenge it on competition or foreign investment grounds. Source
Combined market share figures cited: Management said the combined company would account for 13% of total U.S. television and streaming viewing time and 18% of domestic box office over 12 months. Source
Management prepared to close transaction: Management said it has prepared to close the transaction and remains confident it will be completed, while focusing on its standalone strategy. Source

Capital, cash and debt

Cash and gross debt at quarter-end: The company ended the quarter with $1.6 billion in cash and cash equivalents and $15.2 billion in gross debt. Source
Operating and free cash flow in Q2: Q2 operating cash flow was $319 million, capital expenditures $61 million, and free cash flow $258 million; first-half free cash flow was $354 million. Source
WBD financing to be repaid from placement: The $2.15 billion revolver draw used for the WBD termination fee is to be repaid from private placement proceeds; $350 million was repaid in Q2. Source
Debt maturing for rest of 2026 small: Management said $86 million of debt matures for the remainder of 2026. Source

Content slate and platform work

Theatrical slate nearly doubled to 15: The theatrical slate grew from eight films in 2025 to 15 in 2026, with more than 15 films on track for 2027. Source
Box office per marketing dollar up 11%: Management said the Studios film group generated 11% more box office per dollar of marketing spend in 2026 than in 2025. Source
UFC viewing hours and households: Since January, 20 million subscriber households watched more than 200 million hours of UFC programming on Paramount+. Source
40 series greenlit since August 2025: Management said 40 new or returning series have been greenlit since August 2025, including more than 10 produced externally. Source
In-house streaming player and app speed: The in-house streaming player has improved video quality, and Smart TV app startup times are now faster, with 800 controlled experiments run. Source

Coming up, as management said on 4 August 2026

MobLand returns next month: Management said MobLand returns next month, after Avatar Aang and the third season of Lioness launched in the third quarter. Source
September sports and boxing lineup: September includes UEFA, NFL simulcasts, UFC 331, and the first premium live boxing event on Paramount+ on September 12. Source
Eight films due in second half: Eight films remain for the second half of 2026, including PAW Patrol: The Dino Movie, Street Fighter, and Mr. Irrelevant with the NFL. Source
More than 15 films planned for 2027: Management said it is on track to release more than 15 films in 2027, including Children of Blood and Bone and the fourth Sonic the Hedgehog installment. Source

Figures management reported

Figure	Reported
Paramount+ subscribers Source	81.6 million worldwide at quarter-end
Net additions Source	approximately 2 million in Q2
Churn Source	Q2 was the lowest churn quarter in Paramount+ history; no percentage given
ARPU growth Source	approximately 12% year-over-year
Capital expenditures Source	$61 million in Q2; $150 million in first half

Risks management discussed

Regulatory: Management described the pending antitrust litigation over the WBD combination as not reflecting current market conditions. Source
Demand: TV Media profit grew while linear revenue faces secular pressure and the industry shifts toward streaming. Source
Demand: Affiliate revenue fell 6% year-over-year, which management linked to continued pay TV subscriber erosion. Source
Operational: Management said the streaming experience required significant work to reach best-in-class standards after the transaction. Source

Earlier plans management reported on

Not stated: The Q1 letter targeted closing by end of Q3 2026; the Q2 letter says the company fully expects the transaction to close, without a date. Source
Ahead: The Q1 letter expected Q2 subscribers to be flattish; the Q2 letter says about 2 million were added, ahead of expectations. Source
Ahead: Management said the Q2 film slate, led by Scary Movie, came ahead of management's expectations. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Fellow shareholders, As we’ve expanded our slate and strengthened the streaming foundation that underpins our business, 329 delivered the highest peak concurrent streams in the platform’s history for an exclusive live event, Studios In June, we launched Paramount Games, our dedicated games division serving as both a publisher and Driving Efficiency and Optimizing Investment Enterprise-wide Q2 Results and Q3 and 2026 Outlook Q2’26 Q3’26 Capital Structure & Capital Allocation

Cautionary Note Concerning Forward-Looking Statements SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued)

Forward-looking statements notice

Financial Statement Presentation PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued) we’ve made meaningful progress over the past year towards becoming a more efficient, agile trailing only Super Bowl LVIII. Since the start of the year, 20 million subscriber households have incubator for interactive entertainment built around our world-class IP. That same week, we This letter contains both historical and forward-looking statements, including statements related to our future financial (Unaudited; in millions) (Unaudited; in millions) (Unaudited; in millions) (Unaudited; in millions) (Unaudited; in millions) (Unaudited; in millions) The segment is continuing to see strong, profitable growth year-over-year in the second quarter, a We continue to make progress on our transformation at Paramount, and we now expect to deliver A summary and discussion of Q2 results and our Q3 and 2026 outlook are below. In Q2, total revenue of $6.9 billion increased 1% versus revenue of $6.8 billion in Q2'25 for the In Q3’26, we expect total revenue of $6.95 billion to $7.15 billion, or 4% to 7% growth year-over-year We ended the quarter with $1.6 billion in cash and cash equivalents and $15.2 billion in gross debt. In company. This impact is most evident in our TV Media business, where revenue is down 7% year-to- watched more than 200 million hours of UFC programming on Paramount+, generating viewership announced two major titles in development - TMNT: The Last Ronin and Star Trek: Shadow Frontier. (Unaudited; in millions, except per share amounts) (Unaudited; in millions, except per share amounts) (Unaudited; in millions, except per share amounts) A year ago, we laid out our three north star priorities that would guide the new Paramount: On August 7, 2025, Paramount Global and Skydance Media, LLC (“Skydance”) became subsidiaries of CONSOLIDATED STATEMENTS OF OPERATIONS CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; in millions, except per share amounts) (Unaudited; in millions) results and performance, potential achievements and transactions (including in connection with our pending merger meaningful improvement from a loss in the prior-year period. On the film side, our Studios turnaround over $2.7 billion of run-rate efficiencies by the end of 2026 versus $2.5 billion previously, and continue predecessor company, led by growth in DTC and Studios revenues, largely offset by a continued decline versus Q3’25 for the predecessor company, with accelerating growth in DTC and Studios and Q2, we repaid $350 million of our outstanding revolver borrowings to end the quarter at $1.8 billion date, yet profitability has increased 14% compared with the first half of 2025. We’re also seeing early more than 23 times the average pay-per-view event over the past two years. Our latest release, Avatar Legends: The Fighting Game, is performing very well with an 80 Metacritic with Warner Bros. Discovery, Inc.) and their expected benefits, and industry trends and developments. All statements Paramount Skydance Corporation, pursuant to a transaction agreement entered into on July 7, 2024 (Unaudited; in millions, except per share amounts) (Unaudited; in millions, except per share amounts) (Unaudited; in millions) Beginning in 2026, we transitioned our reporting structure into three new segments: Studios, Direct- Period from July 1-August 6, 2025 Direct-to-Consumer Period from July 1-August 6, 2025 TV Media Period from July 1-August 6, 2025 •Investing in our growth businesses anchored by our creative engines and superior storytelling is showing real, measurable progress as our Q2 releases outperformed expectations, reflecting not only to expect $3 billion-plus in efficiencies from the Skydance-Paramount combination. In millions, exceptper share amountsPredecessorSuccessorOutlook7/1/25 -8/7/25 -Q2’258/6/259/30/25Q4’25Q1’26Q2’26Q3’262026Direct-to-Consumer$2,264$923$1,344$2,309$2,398$2,474Y/Y Growth (%)11%9%Studios1,1354627382,0601,2831,314Y/Y Growth (%)11%16%TV Media3,4541,1982,0423,7993,6663,128Y/Y Growth (%)(6)%(9)%Eliminations(4)(2)(3)(20) - (3)Total Revenue$6,849$2,581$4,121$8,148$7,347$6,913$6,950 - $7,150$30,000Y/Y Growth (%)1%2%2%1%4% - 7%4%Operating Income (Loss)$399$80$244$(339)$616$475Operating Margin (%)5.8%3.1%5.9%(4.2)%8.4%6.9%Net Earnings (Loss)$57$(244)$(13)$(573)$168$41Diluted EPS (1)$.08$(.36)$(.01)$(.52)$.15$.04Adjusted EBITDA (2)$863$313$684$674$1,161$1,099$875 - $975$3,800 - $3,900Y/Y Growth (%)(6)%42%59%27%(12%) - (2%)16% - 19%Adj. EBITDA Margin (%)12.6%12.1%16.6%8.3%15.8%15.9%13.1%12.8%Net Cash Provided by (Used For) Operating Activities$159$(175)$268$217$185$319Free Cash Flow (2)$114$(207)$222$101$96$258Shares Outstanding (3)6806751,0981,1041,1181,120Paramount+ Revenue$1,771$709$1,060$1,837$1,974$2,061Y/Y Growth (%)23%17%17%16%Paramount+ Subscribers76.877.978.979.681.6Y/Y Growth (%)14%4%2%6% in TV Media. Operating income was $475 million (6.9% margin) including $153 million of transaction- moderating declines in TV Media. In Q3, we expect Paramount+ quarter-over-quarter subscribers will drawn. As a reminder, we drew $2.15 billion on our revolving credit facility in Q1 to pay the $2.8 billion benefits from our platform unification efforts, bringing Paramount+ and Pluto TV onto a single score. that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning The following tables reconcile the adjusted measures to their most directly comparable financial Adjusted EBITDA (defined below), Adjusted earnings before income taxes, adjusted provision for Three Months Ended June 30, 2026 (the transactions contemplated by the Transaction Agreement, the “Skydance Transactions”). Free Cash Flow Six Months Ended June 30, 2026 to-Consumer, and TV Media and updated our segment expense allocations to better reflect how we the strength of our slate, but also a more disciplined, data-driven approach to greenlighting, marketing, related costs. Adj. EBITDA was $1.1 billion, a 15.9% margin, and increased 27% year-over-year, with be flattish. termination fee WBD owed to Netflix upon entering into our merger agreement. This total amount will technology stack to improve efficiency, accelerate innovation, and deliver a better experience for We also expanded our content footprint in Q2 by fully integrating BET+ into Paramount+, bringing of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our objectives, plans or goals GAAPNon-GAAPPredecessorPredecessorPeriod From July 1 - August 6,Period From July 1 - August 6,20252025TV MediaAdjustments (b)TV MediaAdvertising$485$(1)$484Affiliate and subscription696(40)656Licensing and other247(189)58Revenues1,428(230)1,198Content costs657(153)504Advertising and marketing59(7)52Other430(73)357Expenses1,146(233)913Adjusted EBITDA/Adjusted OIBDA (a)$282$3$285 •Scaling our direct-to-consumer business globally SuccessorPredecessorSuccessorPredecessorThree Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,Six Months Ended June 30,2026202520262025Revenues$6,913$6,849$14,260$14,041Costs and expenses:Operating4,4434,6249,2989,585Selling, general and administrative1,4431,4012,8542,944Depreciation and amortization36487726175Impairment charges - 157 - 157Restructuring and transaction- related items188181291266Total costs and expenses6,4386,45013,16913,127Gain on dispositions - - - 35Operating income4753991,091949Interest expense(255)(214)(493)(431)Interest income29326770Other items, net(34)(39)(58)(76)Earnings before income taxes and equity in loss of investee companies215178607512Provision for income taxes(120)(50)(275)(150)Equity in loss of investee companies, net of tax(54)(67)(116)(140)Net earnings (Parent and noncontrolling interests)4161216222Net earnings attributable to noncontrolling interests - (4)(7)(13)Net earnings attributable to Parent$41$57$209$209Basic net earnings per common share attributable to Parent$.04$.08$.19$.31Diluted net earnings per common share attributable to Parent$.04$.08$.19$.31Weighted average number of common shares outstanding:Basic1,1176751,113673Diluted1,1206801,119679 AtAtJune 30, 2026December 31, 2025ASSETSCurrent Assets:Cash and cash equivalents$1,627$3,274Receivables, net6,1786,615Programming and other inventory1,6551,461Prepaid expenses and other current assets1,5601,970Total current assets11,02013,320Property and equipment, net2,2162,195Programming and other inventory15,64115,028Goodwill2,0341,600Intangible assets, net5,6496,238Operating lease assets1,0331,126Deferred income tax assets, net1,3471,282Advance consideration for WBD acquisition2,800 - Other assets2,6712,553Total Assets$44,411$43,342LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent Liabilities:Accounts payable$511$906Accrued expenses2,1582,077Participants’ share and royalties payable2,6062,646Accrued programming and production costs1,8011,832Deferred revenues1,4861,355Debt665433Other current liabilities1,3731,350Total current liabilities10,60010,599Long-term debt14,49113,225Participants’ share and royalties payable1,4371,361Pension and postretirement benefit obligations1,1691,185Deferred income tax liabilities, net6885Operating lease liabilities 1,0461,150Programming obligations581400Other liabilities2,2092,450Commitments and contingenciesParent stockholders’ equity:Class A Common Stock, par value $.001 per share; 55 shares authorized; 32 (2026 and 2025) shares issued - - Class B Common Stock, par value $.001 per share; 7,000 (2026) and 5,500 (2025) shares authorized; 1,089 (2026) and 1,076 (2025) shares issued11Additional paid-in capital13,30713,386Accumulated deficit(1,544)(1,753)Accumulated other comprehensive income759Total Parent stockholders’ equity11,77111,693Noncontrolling interests1,0391,194Total Equity12,81012,887Total Liabilities and Equity$44,411$43,342 SuccessorPredecessorSix Months Ended June 30,Six Months Ended June 30,20262025Operating Activities:Net earnings (Parent and noncontrolling interests)$216$222Adjustments to reconcile net earnings to net cash flow provided by operating activities:Depreciation and amortization726175Impairment charges - 157Deferred tax provision5021Stock-based compensation16187Gain on dispositions - (35)Equity in loss of investee companies, net of tax and distributions118141Change in assets and liabilities(767)(429)Net cash flow provided by operating activities504339Investing Activities:Investments (172)(148)Capital expenditures(150)(102)Advance consideration for WBD acquisition(2,800) - Proceeds from dispositions1366Other investing activities(6) - Net cash flow used for investing activities(3,115)(184)Financing Activities:Borrowings under credit facility2,700 - Repayment of credit facility borrowings(900) - Repayment of notes and debentures(347) - Dividends paid on common stock(117)(70)Payment of payroll taxes in lieu of issuing shares for stock-based compensation(104)(26)Payments to noncontrolling interests(189)(65)Other financing activities(51) - Net cash flow provided by (used for) financing activities992(161)Effect of exchange rate changes on cash and cash equivalents(28)84Net (decrease) increase in cash and cash equivalents(1,647)78Cash and cash equivalents at beginning of year3,2742,661Cash and cash equivalents at end of period $1,627$2,739 measures in accordance with U.S. GAAP. The tax impacts on the items identified as affecting GAAPNon-GAAPPredecessorPredecessorPeriod From July 1 - August 6,Period From July 1 - August 6,20252025Filmed EntertainmentAdjustments (b)StudiosTheatrical$73$ - $73Licensing and other202185387Advertising112Revenues276186462Content costs131147278Advertising and marketing1062108Other 75378Expenses312152464Adjusted EBITDA/Adjusted OIBDA (a)$(36)$34$(2) Our Direct-to-Consumer segment consists of our portfolio of domestic and international pay and GAAPNon-GAAPPredecessorPredecessorPeriod From July 1 - August 6,Period From July 1 - August 6,20252025Direct-to-ConsumerAdjustments (b)Direct-to-ConsumerAdvertising$179$ - $179Affiliate and subscription70440744Revenues88340923Content costs41216428Advertising and marketing1146120Other 252(14)238Expenses7788786Adjusted EBITDA/Adjusted OIBDA (a)$105$32$137 Our TV Media segment consists of our (1) broadcast operations - the CBS Television Network, our income taxes, adjusted net earnings attributable to parent, and adjusted diluted EPS, which are operate and make cost decisions across the business. As a result of the new accounting basis SuccessorSix Months Ended June 30, 2026Earnings Before Income TaxesProvision for Income TaxesNet Earnings Attributable to ParentDiluted EPSReported (GAAP)$607$(275)$209$.19Items affecting comparability:Restructuring charges (a)35(5)30.03Transaction-related items (b)256(21)235.21Discrete tax items - (8)(8)(.01)Adjusted (Non-GAAP)$898$(309)$466$.42 and distribution. By applying audience insights and analytics throughout the process, we’re making Our progress is evident in our external financials in TV Media, where profitability grew year-over-year profitability up across all segments. be repaid by us from proceeds we will receive from the private placement we entered into in are or may be forward-looking statements. These forward-looking statements reflect our current expectations consumers. more than 1,000 hours of BET originals, movies, and specials to a larger audience and increasing TV Media SuccessorThree Months Ended June 30, 2026Earnings Before Income Taxes Provision for Income TaxesNet Earnings Attributable to ParentDiluted EPS Reported (GAAP)$215$(120)$41$.04Items affecting comparability:Restructuring charges (a)35(5)30.02Transaction-related items (b)153(15)138.12Discrete tax items - (4)(4) - Adjusted (Non-GAAP)$403$(144)$205$.18 Free cash flow is a non-GAAP financial measure. Free cash flow reflects our net cash flow provided by comparability in the tables below have been calculated using the tax rate applicable to each item. •Driving efficiency enterprise-wide with a focus on long-term free cash flow generation free streaming services, including Paramount+ and Pluto TV, as well as our domestic premium cable domestic broadcast television network; CBS Stations, our owned television stations; and our measures of performance not calculated in accordance with accounting principles generally accepted As a result of the new accounting basis established for Paramount Global’s net assets upon the closing concerning future results and events; can generally be identified by the use of statements that include phrases such as established for Paramount Global’s net assets upon the closing of the Skydance Transactions (see smarter decisions and generating 11% more box office per dollar of marketing spend in 2026 compared while revenue declined, reflecting steps to rightsize the cost structure relative to overall declines in We expect adj. EBITDA of $875 million to $975 million, or a 13.1% margin at the midpoint, with connection with the WBD transaction. We have $86 million in debt maturing for the remainder of visibility for BET’s stories and creators. Following the migration, engagement among migrated operating activities less capital expenditures. We deduct capital expenditures when we calculate free network, Paramount+ with Showtime. For the Predecessor period, the Direct-to-Consumer segment international free-to-air networks, including Network 10 and Channel 5; (2) domestic basic cable in the United States (“U.S. GAAP” or “GAAP”) (together, the “adjusted measures”) exclude certain of the Skydance Transactions, the results of operations and cash flows are not comparable between “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or other similar Financial Statement Presentation), the GAAP basis for our segment information for the Predecessor Looking back on the past twelve months, I’m incredibly proud of how our team has turned those to 2025. With eight films still to come in the second half of this year, including PAW Patrol: The Dino Our TV Media segment continues to deliver on the transformation we set out to achieve, growing linear revenues. For example, even as we made more efficient programming decisions across TV Media Direct-to-Consumer approximately $70 million of stock-based compensation in the quarter. We expect profitability will 2026. One year in, we are proud of the progress we’ve made, and we’re energized by the path ahead. While subscribers increased meaningfully versus the BET+ year-to-date average, driven by new seasons of cash flow because investment in capital expenditures is a use of cash that is directly related to our SuccessorPredecessorSuccessorPredecessorThree Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,Six Months Ended June 30,2026202520262025Net earnings attributable to Parent (GAAP)$41$57$209$209Net earnings attributable to noncontrolling interests - 4713Equity in loss of investee companies, net of tax5467116140Provision for income taxes12050275150Other items, net34395876Interest expense, net226182426361Gain on dispositions (a) - - - (35)Transaction-related items (a)153425624Restructuring charges (a) (b)3517735242Impairment charges (a) - 157 - 157Stock-based compensation (b)723915283Depreciation and amortization 36487726175Adjusted EBITDA (Non-GAAP)$1,099$863$2,260$1,595 excluded Paramount+ with Showtime. networks, including MTV, Comedy Central, Paramount Network, The Smithsonian Channel, items identified as affecting comparability that are not part of our normal operations, including the Successor and Predecessor periods. Accordingly, our consolidated financial statements within our words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and period is based on our previous segments, Filmed Entertainment, Direct-to-Consumer, and TV priorities into measurable progress, reflecting their talent, hard work, and dedication. Movie, Street Fighter, and Mr. Irrelevant with the NFL - the league’s first theatrical release - we’re profit and margin even as the industry navigates secular pressure on linear and the ongoing shift to - with average production costs per episode down nearly 10% year-over-year for the 2025-2026 improve year-over-year in Studios and TV Media. In Direct-to-Consumer, we expect a mid- to high- there is still significant work to be done, our confidence in the opportunity continues to grow, and Tyler Perry’s Divorced Sistas, Zatima, All The Queen’s Men, and more. operations. Our net cash flow provided by operating activities is the most directly comparable U.S. which may cause our actual results, performance or achievements to be different from any future results, performance Nickelodeon, BET Media Group, CBS Sports Network, and international extensions of certain of programming charges, impairment charges, restructuring charges, transaction-related items, other Form 10-Q for the second quarter of 2026 are presented in two distinct periods. The periods prior to

DTC revenue increased 9% year-over-year to $2.5 billion, led by Paramount+ revenue growth of Media. To provide information consistent with how management reviews results, this letter includes continuing to build the broader, more diverse slate we set out to create. That momentum carries into streaming. CBS remains the anchor of that strategy, driven by strong live sports performance alongside broadcast season - we saw an increase in our share of the top 20 series. This shows we can manage single-digit margin in Q3 due primarily to the seasonal timing of content amortization expense, while Warner Bros. Discovery Transaction we’re excited for the future of this company powered by storytelling and accelerated by technology. GAAP financial measure. or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among Three Months Ended June 30, 2025 these brands; and (3) CBS Media Ventures, which produces and distributes first-run syndicated corporate matters, gain (loss) on dispositions, gain (loss) from investments and discrete tax items, August 7, 2025 include only Paramount Global and are identified as “Predecessor”, and the periods 16% year-over-year, reflecting subscriber growth of approximately 6% and ARPU growth of non-GAAP presentations in which the 2025 Predecessor amounts have been recast under the new We’ve focused on transforming the business and investing in areas where we see the biggest 2027, with another strong lineup that spans iconic franchises, original storytelling, and bold new seven of the top 10 broadcast series in the most recent broadcast season. Flagship franchises like the segment for profitability while still delivering great entertainment value to audiences. still expecting full-year growth in our streaming profit. We anticipate transformation costs of roughly August 4, 2026 That confidence extends to our proposed combination with Warner Bros. Discovery. As we’ve executed Our third quarter slate is off to a strong start with the launches of Avatar Aang: The Last Airbender and others: risks related to our streaming business; the adverse impact on our advertising revenues as a result of changes in programming. TV Media also includes a number of digital properties such as CBS News 24/7 for 24- each where applicable. We define Adjusted EBITDA as net earnings (loss) attributable to Parent before beginning on August 7, 2025 reflect Paramount Skydance Corporation and are identified as approximately 12%. We added approximately 2 million subscribers in Q2, ahead of our segment presentation and therefore constitute a non‑GAAP presentation. Reconciliations from the opportunity for growth. Our primary focus is high-quality storytelling, and we’ve nearly doubled our As it relates to the planned acquisition of Warner Bros. Discovery, we fully expect the transaction to creative voices, positioning the Studios for sustained, profitable growth. Survivor's milestone 50th season delivered some of the network's biggest performances, further $200 million in Q3, which will impact our reported free cash flow. consumer behavior, advertising market conditions and deficiencies in audience measurement; risks related to operating GAAPNon-GAAPPredecessorPredecessorThree Months Ended June 30,Three Months Ended June 30,20252025Direct-to-ConsumerAdjustments (b)Direct-to-ConsumerAdvertising$494$ - $494Affiliate and subscription1,6651041,769Licensing and other1 - 1Revenues2,1601042,264Content costs1,085291,114Advertising and marketing29411305Other624(33)591Expenses2,00372,010Adjusted EBITDA/Adjusted OIBDA (a)$157$97$254 against our strategy over the past year, we’ve also prepared to close the transaction, and we remain the third season of Lioness, and the return of MobLand coming next month. September also brings a Management believes free cash flow provides investors with an important perspective on the cash hour news and CBS Sports HQ for sports news and analysis. For the Predecessor period, the TV interest expense and income; (provision for) benefit from income taxes; other items; equity in earnings “Successor”. The presentation in this letter, the accompanying financial statements, and supplemental expectations as subscriber growth accelerated (including nearly 2 million international hard Summary Points: in highly competitive and dynamic industries; the unpredictable nature of consumer behavior, as well as evolving GAAP presentation to this recast non-GAAP presentation are provided on the following pages. theatrical output from eight releases in 2025 to 15 in 2026, while also delivering over 90 series and a close and remain focused on preparing for a successful combination once it is complete. Over the past reinforcing the crossover strength across our platform as CBS and Paramount+ had 10 of the top 20 Across other areas of the business, we’re continuing to make progress on making technology a core confident it will be completed, creating a stronger, more competitive, creative-first media company compelling live sports lineup, including UEFA, NFL simulcasts, UFC 331, and our first premium live available to us to service debt, pay dividends, make strategic acquisitions and investments, maintain Media segment also included television studio operations and the premium cable network, (loss) of investee companies, net of tax; and depreciation and amortization, adjusted to exclude stock- disclosures of non-GAAP financial measures also reflect the distinction between the Successor and bundle exits in the quarter). Outperformance was driven by our programming slate, including technologies and distribution models; risks related to our decisions to invest in new businesses, products, services and combined 800+ episodes. Beyond 2026, we are on track to release more than 15 films in 2027, several months, our leadership team and legal partners have worked closely with antitrust and Our Television Studios continue to build a strong pipeline of premium content across platforms and series across all linear and streaming programming in Q2. Meanwhile, our cable portfolio brands, competency of the company and operating more efficiently as an enterprise. As one example, we are 2026 that builds on the foundation we’ve established - one that benefits consumers, theater exhibitors, and boxing event on Paramount+ on September 12. We greenlit new seasons of the hit series The Madison our capital assets, satisfy our tax obligations, and fund ongoing operations and working capital needs. Paramount+ with Showtime. based compensation expense (which is a noncash expense that management does not consider to be Predecessor periods.
One year in, we’re proud of the great progress: including nearly doubling our theatrical slate FIFA World Cup in certain Latin American countries, UFC, and our Originals, all of which technologies, and the evolution of our business strategy; the potential for loss of carriage or other reduction in or the Studios/Filmed Entertainment including new and franchise titles, such as Children of Blood and Bone, featuring an all-star cast, the competition authorities around the world. As a result, regulatory bodies and governments representing markets. CBS Studios is producing or co-producing 15 new and returning series for the network’s including The Daily Show, RuPaul's Drag Race, PAW Patrol, and SpongeBob SquarePants, each set new building enterprise apps in-house across procurement, recruiting, finance, and HR using AI creatives. and Dutton Ranch, along with Clueless, a limited series based on Paramount’s cult classic film and We believe the presentation of free cash flow is relevant and useful for investors because it allows impact of negotiations for the distribution of our content; damage to our reputation or brands; losses due to asset part of our underlying operating performance) and certain items identified as affecting comparability from 8 to 15 films in 2026 and on track to release 15+ in 2027; 40 new or returning DTC series contributed to Q2 being our lowest churn quarter in Paramount+’s history. DTC advertising fourth installment of the Sonic the Hedgehog franchise, and Teyana Taylor’s directorial debut Get Lite. For 2026, we continue to expect total revenue of $30 billion, or 4% growth year-over-year, inclusive of 65 jurisdictions - including the European Commission, Australia, Brazil, China, the U.S., Germany, upcoming season, while expanding its reach with leading third-party streamers and international performance benchmarks, including The Daily Show achieving its highest ratings in nine years, while development tools with rapid build times and savings versus third-party solutions. We also have the starring Alicia Silverstone, and Ascent, a new thriller starring and executive produced by EGOT winner impairment charges for goodwill, content and long-lived assets, including finite-lived intangible assets; liabilities related investors to evaluate the cash generated from our underlying operations in a manner similar to the Our Studios segment consists of our television and film studio operations, including CBS Studios, Three Months Ended June 30, 2025 that are not part of our normal operations. Refer to Note 1 of our Form 10-Q for the second quarter of 2026 for additional information regarding greenlit; and over 90 series and 800+ episodes expected from our TV studios in 2026. revenue grew 8% year-over-year, with Paramount+ ad revenue growing over 30% in the (a) Reflects severance costs associated with changes in management and aligning the business around our strategic priorities (a) Reflects severance costs associated with changes in management and aligning the business around our strategic priorities At the same time, we’ve assembled one of the strongest creative rosters in the industry, welcoming predecessor and successor periods. Our expectations by segment are largely consistent with those we France, Spain, Canada, South Africa, Saudi Arabia, and South Korea - have either cleared the broadcasters, including with the newest installment of the NCIS universe, NCIS: New York, as well as the BET Awards drew its highest ratings and largest audience in years. majority of the workforce using AI tools across an accelerating number of workflows. In particular, we We have publicly committed to releasing at least 30 high-quality films annually, each with a minimum Viola Davis. Both Clueless and Ascent will be filmed in Los Angeles. to discontinued operations and former businesses; increasing scrutiny of, and evolving expectations for, sustainability method used by management. Free cash flow is one of the quantitative performance metrics used in Paramount Television Studios, Nickelodeon Animation, Paramount Pictures, Paramount Animation, the new accounting basis established in connection with the Skydance Transactions. quarter. As previously noted, we completed our integration of BET+ into Paramount+ in the following the Skydance Transactions. following the Skydance Transactions. new and returning world-class storytellers including the Duffer Brothers, Matt Stone and Trey Parker, outlined in our Q4’25 letter. We are increasing our adj. EBITDA forecast from our previous $3.8 billion transaction or elected not to challenge it on competition and/or foreign direct investment grounds. initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; challenges in high-profile series such as Netflix’s Little House on the Prairie, Apple TV’s Murderbot, Amazon’s Odd are seeing velocity and volume of features shipped increasing across our streaming engineering team. GAAPNon-GAAPPredecessorPredecessorThree Months Ended June 30,Three Months Ended June 30,20252025TV MediaAdjustments (b)TV MediaAdvertising$1,657$(2)$1,655Affiliate and subscription1,780(104)1,676Licensing and other574(451)123Revenues4,011(557)3,454Content costs1,956(380)1,576Advertising and marketing116(16)100Other 1,076(210)866Expenses3,148(606)2,542Adjusted EBITDA/Adjusted OIBDA (a)$863$49$912 45-day theatrical window, while continuing to license content to, and acquire content from, third determining our annual incentive compensation awards. In addition, free cash flow is a primary We use these adjusted measures to, among other things, evaluate our operating performance. These •Q2 was our best quarter for retention in Paramount+'s history, powered by Dutton Ranch, UFC, and Miramax, as well as Skydance Animation, Film, and Television, Paramount Sports Entertainment quarter, which along with Showtime declines, amounted to a modest headwind to total DTC (b) Principally reflects legal, advisory, and other professional fees associated with the planned WBD Merger and related (b) Principally reflects legal, advisory, and other professional fees associated with the planned WBD Merger and related protecting and maintaining our intellectual property rights; domestic and global political, economic and regulatory Jon M. Chu, Issa Rae, Liz Tigelaar, and James Mangold, with many more to come. to $3.8 to $3.9 billion, or a 12.8% margin at the midpoint. Our profit growth reflects progress against Jobs, and F-Ward in Australia, among others. That momentum carries into next season - the 2026-2027 primetime schedule features 15 CBS Studios Our work to unify company systems is on track as additional divisions went live on Oracle Fusion in parties. The rationale is straightforward: as technology-funded competitors like Netflix, Amazon and Meanwhile, our product focus is on building on our programming momentum and planned measure used externally by our investors, analysts and industry peers for purposes of valuation and measures are among the primary measures used by management for planning and forecasting of and the FIFA World Cup non-exclusively across six countries in Latin America, gaining ~2 million integration. integration. and Paramount Games Studios. For the Predecessor period, our Filmed Entertainment segment was growth. factors affecting our businesses generally; the inability to hire or retain key employees or secure creative talent; our $3 billion-plus efficiencies and cost management balanced with disciplined reinvestment. We now As these clearances demonstrate, the transaction is fully consistent with antitrust laws. The claims in series, including new additions Cupertino, Einstein, and Eternally Yours, alongside returning hit series July, and we are on our way to bringing the entire company onto a unified ERP system by early next Apple reshape the industry, combining Paramount and WBD creates a company with the breadth and investments by strengthening our platform offering. This includes efforts to enhance our services, comparison of our operating performance to other companies in our industry. future periods, and they are important indicators of our operational strength and business new Paramount+ subscribers in the quarter to reach 81.6 million worldwide. most comparable to our new Studios segment and excluded studio operations related to our TV disruptions to our operations as a result of labor disputes; risks and costs associated with the integration of, and our Three Months Ended June 30, 2025 Six Months Ended June 30, 2025 Of course, great storytelling comes in many forms. We’ve also expanded our leadership in live sports expect free cash flow conversion of at least 10% before roughly $800 million of transformation costs. the pending antitrust litigation do not reflect the realities of today's highly competitive entertainment Paramount Television Studios is producing a stellar slate of shows for our networks and third parties, Sheriff’s Country and Matlock. CBS, CBS Studios, and CBS Media Ventures led all networks with a year. resources to compete on equal footing - making this transaction pro-competitive, pro-consumer, and which are already resulting in improved viewing experiences. Our in-house streaming player, validated
DTC adj. EBITDA was $366 million (14.8% margin), up 44% versus $254 million in Q2'25, as performance. In addition, we use Adjusted EBITDA to, among other things, value prospective ability to integrate, the businesses of Paramount Global and Skydance Media, LLC successfully and to achieve anticipated Media businesses, including CBS Studios and Paramount Television Studios. (a) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted through new partnerships with the UFC, Zuffa Boxing, and UEFA, complementing an already strong 2026 remains an important year of investment - in business transformation, and in content and marketplace. Even combined, Paramount and Warner Bros. Discovery would account for just 13% of with 20 active titles for Paramount+, including Dexter: Resurrection, Tulsa King and its spinoff Frisco combined 48 nominations for the 53rd Annual Daytime Emmy® Awards, further recognition of the pro-creative community. through more than 800 controlled experiments, has significantly improved video quality while virtually revenue growth and cost efficiencies, including a benefit related to the change in accounting
Q2 film slate, led by Scary Movie, performed well, and we’re building our pipeline across synergies; litigation relating to the Skydance Transactions potentially resulting in substantial costs; volatility in the price As free cash flow is not a measure calculated in accordance with U.S. GAAP, free cash flow should not acquisitions. We believe these measures are relevant and useful for investors because they allow PredecessorThree Months Ended June 30, 2025Earnings Before Income TaxesProvision for Income TaxesNet Earnings Attributable to ParentDiluted EPS Reported (GAAP)$178$(50)$57$.08Items affecting comparability:Impairment charges (a)157(39)118.17Restructuring charges (b)177(42)135.20Transaction-related items (c)4(1)3.01Discrete tax items - 22 - Adjusted (Non-GAAP)$516$(130)$315$.46 PredecessorSix Months Ended June 30, 2025Earnings Before Income TaxesProvision for Income TaxesNet Earnings Attributable to ParentDiluted EPSReported (GAAP)$512$(150)$209$.31Items affecting comparability:Impairment charges (a)157(39)118.17Restructuring charges (b)242(58)184.27Transaction-related items (c)24(1)23.04Gain on dispositions (d)(35)2(33)(.05)Discrete tax items - 99.01Adjusted (Non-GAAP)$900$(237)$510$.75 (a) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to Adjusted EBITDA. (a) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted portfolio that includes the NFL, WNBA, the PGA TOUR, March Madness, and more. Notably, our seven- technology, which we expect will contribute to our growth in 2027 and beyond. Across segments: total U.S. television and streaming viewing time, 18% of the domestic box office over the past 12 King. Other recent wins include Ride or Die on Amazon Prime, which quickly became the top show in caliber of storytelling driving the network's performance. These efficiencies are also enabling the company to make disciplined reinvestments into growth areas eliminating high-rebuffering in low-bandwidth conditions, and Smart TV app startup times are now of our Class B common stock; the effect our dual-class capital structure and the concentrated ownership may have on basis resulting from the Skydance transaction, more than offset planned investment in Television Studios, Paramount Animation, and Skydance Sports for both first- and third-party be considered in isolation of, or as a substitute for, either net cash flow provided by operating activities OIBDA to Adjusted EBITDA. investors to view our performance in a manner consistent with the method used by our management; Three Months Ended June 30, 2025 (b) Reflects the inclusion of our premium cable channel, Paramount+ with Showtime, which was included in the TV Media OIBDA to Adjusted EBITDA. the price of our Class B common stock or business; risks related to a private sale of a controlling interest in our Company, year UFC media rights agreement brought every UFC event to Paramount+ beginning this year and, months, and 22% on average over the last two years. Those figures reflect a company competing in an of our business, such as spending over $1.5 billion in new content in 2026 for current and future While we work to complete the transaction, our focus is on executing our standalone strategy and 66% faster. programming. the U.S. with an estimated 1.6 billion minutes watched, and XO, Kitty, which spent three weeks on distribution. as a measure of liquidity or net earnings as a measure of operating performance. Free cash flow, as we and because they exclude items that are not representative of our normal operations, they provide a segment in 2025, and updates to our segment expense allocations to better reflect how we operate and make cost (b) Reflects the transfer of the historical TV Media studio operations to the Studios segment and our premium cable channel, (b) Reflects the inclusion of the historical TV Media studio operations and updates to our segment expense allocations to better including that our stockholders may not realize any change of control premium on shares of our Class B common stock GAAPNon-GAAPPredecessorPredecessorThree Months Ended June 30,Three Months Ended June 30,20252025Filmed EntertainmentAdjustments (b)StudiosTheatrical$254$ - $254Licensing and other434443877Advertising224Revenues6904451,135Content costs394343737Advertising and marketing1955200Other18544229Expenses7743921,166Adjusted EBITDA/Adjusted OIBDA (a)$(84)$53$(31) within just a few months, has delivered some of the platform’s biggest audiences ever. It’s a powerful intensely competitive marketplace against tech giants such as Netflix, Amazon, Apple, and others - Netflix’s Global Top 10 Shows list and reached #1 in 54 countries, including the U.S. This quarter will Sports is another strong pillar of that strategy. In Q2, CBS Sports set ratings records across the board programming - including UFC, our expanding film slate, and a broader Originals lineup - and strategic delivering strong results. That’s what will ultimately define our success as a combined company, and it decisions across the business. Paramount+ with Showtime, to the Direct-to-Consumer segment, and updates to our segment expense allocations to •For DTC, we continue to expect accelerating revenue growth across subscription and calculate it, may not be comparable to similarly titled measures employed by other companies. clearer perspective on underlying performance, and make it easier for investors, analysts and peers to reflect how we operate and make cost decisions across the business. Studios and that we may become subject to the control of a presently unknown third party; risks associated with our status as a better reflect how we operate and make cost decisions across the business. validation of what we’ve long believed: premium live sports improve engagement, strengthen advertising revenue. Underlying subscriber growth will be healthy and accelerating year-over- not one with the market power to dictate outcomes for audiences, creators, or distributors. We remain also see the launch of the newest season of Reacher on Amazon, and its anticipated spinoff, Neagley. with the most-watched Masters in over a decade, the most-watched UEFA Champions League Final scaling of our product and technology capabilities such as investing in AI across our engineering teams remains the best measure of our progress. Coming into the business, we understood we had a lot of work ahead to bring our streaming •Our focus on creative execution and efficiency at TV Media is working: CBS held seven of the compare our operating performance to other companies in the industry and to compare our results “controlled company” under Nasdaq rules, including our exemption from certain corporate governance requirements; retention, and increase the value of our service for subscribers. year, with total paid subscribers modestly higher compared to 2025, including approximately 4 confident the transaction will be completed, creating a stronger, more competitive media company. ever on U.S. English-language television, and our most-watched WNBA game ever following our new and building our ad tech teams and offerings. experiences up to best-in-class standards and we are making progress against that as quickly as top 10 broadcast series in the most recent broadcast season, with an increase in profitability. (a) See notes on the following tables for additional information on items affecting comparability. The following table presents a reconciliation of our net cash flow provided by operating activities to across reporting periods. risks associated with the lack of voting rights of our Class B common stock; risks that anti-takeover provisions in our •Studios revenue increased 16% year-over-year to $1.3 billion, reflecting a strong quarter of million strategic international hard bundle exits. We continue to expect to grow our DTC profit Paramount Animation is expanding its pipeline with a diverse slate of original and franchise-driven long-term partnership with the league. Looking ahead, the NFL remains a strong partnership, and this With that broader context in mind, here’s a closer look at how each of our segments is performing possible - with ambitions to lead in innovation and experimentation over time. third-party deliveries at Paramount Television Studios and the consolidation of Skydance amended and restated certificate of incorporation (“Charter”) and amended and restated bylaws, and under Delaware (b) Stock-based compensation expense of $9 million for both the three and six months ended June 30, 2026 (Successor), and $4 million for free cash flow.
We're raising our full-year 2026 outlook to a range of $3.8-$3.9 billion in adj. EBITDA (12.8% All of this - greater investment in storytelling, new talent and expanded sports rights - is fueling a in 2026 relative to 2025, with profitability weighted more meaningfully to the first half of the both the three and six months ended June 30, 2025 (Predecessor) is included in “Restructuring and transaction-related items.” projects, including The Naughty List, an original animated feature from filmmaker Robert Rodriguez; an fall's expanded schedule - featuring an additional primetime game - underscores the value of live today and where we’re focused as we head into year two. law could deter, delay, or prevent a change of control; risks that exclusive forum provisions in our Charter could limit a licensing revenues, partially offset by lower theatrical revenue from lapping Mission: Impossible Closing Because the adjusted measures are measures of performance not calculated in accordance with U.S. margin) and now expect free cash flow conversion of at least 10%. stockholder’s choice of forum for certain claims and discourage lawsuits against our directors and officers; risks that deeper, broader slate on Paramount+. We’ve greenlit 40 new or returning series since August 2025, year due to the timing of programming investments in Q3 and Q4 as noted above. animated feature based on CBS’ Survivor franchise with Jeff Probst executive producing; and an sports in growing audience reach, advertiser demand, and engagement across both linear and We’re also working on introducing a variety of features, including our short-form video experience, SuccessorPredecessorSuccessorPredecessorThree Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,Six Months Ended June 30,2026202520262025Net cash flow provided by operating activities$319$159$504$339Capital expenditures(61)(45)(150)(102)Free cash flow (Non-GAAP)$258$114$354$237 - The Final Reckoning in the prior year. The Q2 film slate, led by Scary Movie, performed well GAAP, they should not be considered in isolation of, or as a substitute for, our results as reported corporate opportunity provisions in our Charter could permit certain persons to pursue competitive opportunities that One year in, we are proud of the progress we’ve made and confident in our strategy. These results are including 10+ produced externally as we broaden our offering and expand our business with third-party adaptation of the comic Freddy the 13th with Dan Trachtenberg directing. And Skydance Sports, our streaming. Together, these results reflect a TV Media business that is executing on its transformation Direct-to-Consumer Clips, designed to deepen engagement. We also made progress in Q2 on efforts to evolve the product and came ahead of our expectations. under U.S. GAAP, including net earnings (loss), (provision for) benefit from income taxes, net earnings
We expect growth in our new Studios segment driven by accelerating licensing and other might otherwise be available to us; risks associated with our holding company structure, including our dependence on •Our Upfront delivered double-digit growth in commitments across the company and was our a testament to our people, whose hard work and dedication have made them possible. Looking ahead, studios. While we’ll continue to grow our slate, these early investments have helped grow Paramount+ premium studio under Paramount Sports Entertainment, is growing its portfolio as well, as highlighted while continuing to serve our audiences where they are, including on broadcast or Paramount+, and experience on Pluto TV including expanding registration and first-party identity and growing the on- (loss) attributable to Parent, and diluted EPS, as applicable, as indicators of operating performance and distributions from our subsidiaries to meet our tax obligations and other cash requirements; disruptions the WBD revenues, including a full-year impact of legacy Skydance revenue, as well as higher licensing strongest since the CBS-Viacom merger, reflecting the strength of our cross-platform offering. we will build on this momentum and grow our business by investing in great storytelling, better serving from approximately 77 million subscribers before the Skydance transaction to nearly 82 million today, •Studios adj. EBITDA was $36 million (2.7% margin), compared to -$31 million in Q2'25, driven by Paramount+ delivered a standout quarter, with programming driving subscriber additions to a new in the quarter by Netflix’s RAFA, the first primarily non-English docuseries nominated for a primetime positions our most valuable brands and franchises for the future. demand offering as part of our broader platform update. undue reliance should not be placed on these adjusted measures. Other companies may define these Merger may cause to our and WBD’s business and commercial relationships; the negative impact that a failure to from first run, current, and library titles across our studios. Our theatrical slate continues to improved film slate profitability and TV licensing contribution. audiences, and operating more efficiently to create long-term value for shareholders. while deliberately improving the quality and economics of our subscriber base through selective global high and double-digit growth in total engagement. Q2 also marked another milestone: our best Emmy®. consummate the WBD Merger could have on our business, financial condition, results of operations and stock price; the measures, including Adjusted EBITDA, differently and, as a result, our adjusted measures may not be (a) Reflects a charge to reduce the carrying values of FCC licenses in certain markets to their estimated fair values. outperform expectations, though we still expect lower theatrical revenue year-over-year due to •We continue to prepare for our proposed combination with Warner Bros. Discovery, while strategic exits (including 3 million exits in 1H’26). At the same time, we’re making meaningful progress quarter for retention in the service’s history. Dutton Ranch, UFC, and the FIFA World Cup were key Together, these investments reflect a balanced strategy: executing against a roadmap already risk that the WBD Merger may be prevented or delayed or the anticipated benefits reduced if we do not obtain certain directly comparable to similarly titled measures of other companies. TV Media (a) Reflects a charge to reduce the carrying values of FCC licenses in certain markets to their estimated fair values. (b) Reflects severance costs associated with strategic changes in our global workforce. lower average box office revenue per film across more releases in 2026 as we build into our staying focused on executing our standalone strategy and delivering strong results. Note: (1) Diluted EPS from continuing operations attributable to predecessor or successor; (2) See Supplemental regulatory approvals; the risk that the WBD Merger Agreement may be terminated in accordance with its terms, Sincerely, on the product side, with the first phase of convergence now underway, the introduction of Clips, and factors, reinforcing how live sports and marquee content - including our Originals, CBS lineup, and Content licensing continues to gain momentum, with recent wins including key international deals for underway while continuing to innovate so that Paramount+ and Pluto TV remain at the center of how (b) Includes severance costs and charges for the impairment of lease assets. (c) Reflects legal, advisory, and other professional fees relating to the Skydance Transactions. 2027+ slates. We expect Studios segment profitability will increase in 2026 versus 2025. Disclosures Regarding Non-GAAP Financial Measures (3) Weighted average number of diluted shares including if any conditions to the closing of the WBD Merger are not satisfied; the risk that litigation relating to the WBD continued improvements to the experience across our streaming services. deep library - attract and retain subscribers. Together, these results drove 16% year-over-year CBS series and kids and family content; strong ongoing results from our domestic Pay 1 output deals; audiences discover and engage with our programming as we build an entertainment platform for the •TV Media revenue declined 9% year-over-year to $3.1 billion. Advertising revenue declined 14% (c) Reflects legal, advisory, and other professional fees relating to the Skydance Transactions. We are not able to reconcile forward-looking non-GAAP financial measures because we are unable outstanding Merger could prevent or further delay the closing of the WBD Merger or result in the payment of damages after closing; year-over-year, including an approximately eight percentage point headwind from lapping David Ellison Paramount+ revenue growth in Q2 while accelerating our path to higher profitability for the year. and the continued success of studio-produced titles such as Swapped, a film from Skydance Animation future. (d) Principally reflects a gain associated with the disposition of a noncore business. •In TV Media, we expect continued headwinds to affiliate revenue due to pay TV subscriber without unreasonable efforts to accurately estimate the individual adjustments for such challenges realizing synergies and other anticipated benefits expected from the WBD Merger, including integrating NCAA Final Four and Championship game advertising in the prior-year quarter, as noted last Chairman & CEO Together, these platform and content investments are translating into stronger customer engagement that is on track to become Netflix’s second most viewed original animated film. Across our studios, we declines with some moderation in linear advertising declines versus 2025, including expected reconciliations, as applicable, or to quantify the probable significance of these items at this time. WBD’s business successfully; risks to our business, financial condition or results of operations as a result of the quarter, as well as an approximate three percentage point headwind from our sales of Telefe Paramount, a Skydance Corporation with double-digit growth in view hours in Q2. Paramount+ also delivered the best quarter of retention Dutton Ranch launched on May 15 as the biggest original series debut in Paramount+ history, are focused on maximizing the value of our content by serving both our own platforms and a broad political spending in 2026 in the back half of the year. We expect to have improving margins in incurrence of substantial costs and indebtedness in connection with the WBD Merger; risks of reduced ownership and and Chilevision. This was partially offset by an approximately two percentage point benefit from in the service’s history, underscoring the strength of our strategy and the value we’re creating for attracting 12.9 million viewers in its first week and finishing the season with a record-setting 13.4 range of strategic partners, with recent licensing partnerships with the likes of Amazon, Netflix, Tubi, economic interest by our existing stockholders as a result of the WBD Merger; and other factors described in our news TV Media as well as growth in total adj. EBITDA in 2026. political advertising. Affiliate revenue declined 6% year-over-year, consistent with continued releases and filings with the Securities and Exchange Commission, including but not limited to our most recent Annual subscribers. And we’ve achieved this while expanding margins through the first half of 2026. We million average views per episode. In June, we streamed UFC Freedom 250 live from the White House and Tencent. Report on Form 10-K and our reports on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and •We forecast corporate expenses of approximately $1.5 billion for the year. pay TV subscriber erosion while rates remain resilient. continue to expect digital advertising growth to accelerate in the back half of the year, supported by South Lawn - a first-of-its-kind global production that drew a record 17 million viewers across the U.S. factors that we do not currently view as material or that are not necessarily known. The forward-looking statements our recently concluded Upfront, which delivered a double-digit percentage increase in commitments and Latin America, the largest-ever audience for an exclusive live event on Paramount+. In Q2, we also As we reinvigorate the business, we’re seeing the value of our library increase, with healthy double- We present periods before ("predecessor") and after ("successor") the close of the Skydance Transaction (see Financial Statement Presentation). Because our current GAAP segment structure was not in effect during the predecessor period, the 2025 predecessor revenues by segment shown in this letter constitute a non-GAAP presentation. See Supplemental Disclosures Regarding Non-GAAP Financial Measures for reconciliations to the historical GAAP segment presentation. included in this letter are made only as of the date hereof, and we do not undertake any obligation to publicly update •TV Media adj. EBITDA was $1.1 billion, a 34.0% margin versus a 26.4% margin for Q2’25, year-over-year and marked the company’s strongest Upfront since the CBS-Viacom merger. delivered the FIFA World Cup live across six Latin American countries, driving our best quarter of digit revenue growth in Q2 and expected for the full year - a meaningful turnaround from prior years’ any forward-looking statements to reflect subsequent events or circumstances. benefiting from disciplined expense management to more than offset revenue declines. engagement in LATAM and reaching millions of households. That momentum carried into July, as UFC trends.

3 4 5 6 7 8 9 10 11 12 13 22 23 24 25 26 27 28 Non-GAAP measures are detailed in the Supplemental Disclosures at the end of this letter.

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