• Adjusted OIBDA: $858 million, up 20% year over year.

• Paramount+ Revenue Growth: Up 25% year over year.

• Paramount+ Subscribers: Added 3.5 million, reaching 72 million total.

• D2C Advertising Growth: 18% increase, with continued double-digit growth expected in Q4.

• TV Media Advertising Revenue: Declined 2% year over year.

• Affiliate and Subscription Revenue: Declined 1% in Q3.

• Paramount+ Subscription Revenue: Up 27% year over year.

• Free Cash Flow: $214 million in Q3.

• Leverage: Reduced to 3.8 times.

• Cost Savings: $500 million in annual run rate savings, with 90% of reductions executed.

• Licensing Revenue: Declined 9% in the quarter.

• Warning! GuruFocus has detected 4 Warning Signs with PARA.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Paramount+ added 3.5 million subscribers, reinforcing its position as the number four global streaming service.

• Paramount+ revenue grew by 25% year over year, marking the second consecutive quarter of profitability.

• The company achieved $500 million in annual run rate savings through cost reductions.

• Pluto TV reached record engagement with 5.6 billion viewing hours year-to-date.

• Paramount Global's advertising revenue grew by 2%, driven by strong digital ad growth and political spending.

Negative Points

• TV media advertising revenue declined by 2%, reflecting ecosystem trends and the absence of Showtime pay-per-view events.

• Licensing and other revenue declined by 9% due to lower volume of licensing and home entertainment revenues.

• The ongoing dispute with Nielsen remains unresolved, potentially impacting advertising measurement.

• International D2C profitability is tracking 12 to 18 months behind domestic profitability.

• Free cash flow in Q4 is expected to be negative due to content spend timing and restructuring payments.

Q & A Highlights

Q: Brian, can you elaborate on the strategic considerations for direct-to-consumer partnerships and the progress towards domestic streaming profitability? A: Chris McCarthy, Interim Principal Executive Officer, explained that Paramount+ has seen significant revenue growth and is on track for domestic profitability in 2025. The company is open to partnerships that drive value but feels confident in its standalone position. Naveen Chopra, CFO, added that domestic profitability is expected next year, with international operations trailing by 12 to 18 months.

Q: What is the strategy for Paramount+ in international markets, and can you quantify the impact of underreported international ad sales? A: Chris McCarthy stated that the company is taking a market-by-market approach to maximize content value, using a mix of owned operations, hard bundles, and licensing. Naveen Chopra noted that the underreported revenue in Q3 was significant, around $50 million, and no further adjustments are expected.