Paramount Global stock was up nearly 4% in after-hours trading Monday after the conglomerate posted better-than-expected direct-to-consumer numbers in the second quarter.
Paramount trimmed EBITDA losses on its DTC streaming efforts by 5% year over year to $424 million, and the conglomerate is now on target to finish 2023 losing less than the $2 billion it projected for the year.
Meanwhile, the company added around 700,000 Paramount Plus subscribers during the quarter — vs. forecasts of a customer loss — upping the service’s total base to 61 million users.
The Paramount Plus additions come after rival Warner Bros. Discovery lost 1.8 million customers in Q2 across HBO, Discovery Plus and the newly rebranded Max.
Also Read: Paramount Makes $1.62 Billion Deal To Sell Simon & Schuster To KKR
Revenue for Paramount's DTC services surged 40% on a yearly basis, reaching $1.165 billion. Subscription revenue alone was up 47% year over year to $1.224 billion, while advertising sales increased 21% to $441 million.
Viewing hours across Paramount Plus and the ad-supported Pluto TV were also up 35%.
Meanwhile, despite a sluggish ad market and distribution losses from video cord cutting, Paramount’s linear “TV/media” revenue declined only 2% in the quarter to $5.157 billion. Advertising revenue declined 10% in Q2.
Paramount took it on the quarterly chin in its theatrical division, where the middling $169 million global box office performance of Scream VI didn't come close to matching the comparable year-ago Q2 numbers of Top Gun: Maverick.
Filmed entertainment revenue was off by 39% to $831 million for the quarter.
Total Paramount revenue in the quarter was down 2.5% to $7.6 billion.
Also on Monday, Paramount also announced plans to sell its book-publishing division, Simon & Schuster, to private-equity company KKR for $1.62 billion. The proceeds include a kill fee for a scuttled prior sale to Penguin Random House. That $2.2 billion deal was stopped by a federal judge based on antitrust concerns.
Speaking about the ongoing SAG-AFTRA and WGA strikes, Paramount CEO Bob Bakish said the company is well-provisioned for the work stoppages, with about 85 scripted and unscripted assets already in the can.
“We’re saddened that as an industry, we couldn’t come to an agreement that would have prevented this," Bakish said. "Our partnership with the creative community is critical to the health of our industry. So we remain hopeful for a timely resolution, and we are committed to finding a path forward. At the same time, we have a responsibility to minimize disruptions to our audiences and other constituents."
