On November 8, 2024, Paramount Global (PARA, Financial) released its 8-K filing detailing the financial results for the third quarter of 2024. Paramount Global, a leading media and entertainment company, operates through three main segments: TV media, filmed entertainment, and direct-to-consumer services, including Paramount+, Pluto TV, and BET+.
Performance Overview and Challenges
Paramount Global reported a revenue of $6.73 billion for Q3 2024, a 6% decline from the previous year, falling short of the analyst estimate of $6.95 billion. The company's diluted earnings per share (EPS) from continuing operations was reported at a loss of $0.01, contrasting with the analyst expectation of $0.09. This performance underscores the challenges faced by the company, particularly in its TV media and filmed entertainment segments.
Financial Achievements and Strategic Progress
Despite the revenue shortfall, Paramount Global made significant strides in its direct-to-consumer (DTC) segment, which saw a 10% increase in revenue year-over-year. Paramount+ added 3.5 million subscribers, reaching a total of 72 million, and achieved a 25% revenue growth. The DTC segment's adjusted OIBDA improved by $287 million year-over-year to $49 million, marking the second consecutive quarter of profitability.
Our hit content drove strong performance in Q3 where Paramount+ added 3.5 million new subscribers, solidifying our position as the #4 global SVOD service. Our DTC segment successfully delivered profitability for the second quarter in a row, improving by more than $1 billion over the past four quarters.
Segment Analysis
The TV media segment experienced a 6% decline in revenue to $4.3 billion, primarily due to lower affiliate and licensing revenues. Advertising revenue decreased by 2%, reflecting challenges in the linear advertising market. The filmed entertainment segment saw a significant 34% drop in revenue to $590 million, attributed to fewer theatrical releases compared to the previous year.
Financial Statements and Key Metrics
Paramount Global's operating income for the quarter was $337 million, down 46% from the previous year. The company reported a net loss from continuing operations of $5.94 billion for the nine months ended September 30, 2024, largely due to a $5.98 billion goodwill impairment charge recorded in Q2 2024. Adjusted OIBDA for the quarter increased by 20% to $858 million, highlighting operational efficiencies and cost-saving measures.
| Segment | Q3 2024 Revenue ($ millions) | Q3 2023 Revenue ($ millions) | Change (%) |
|---|---|---|---|
| TV Media | 4,298 | 4,567 | -6% |
| Direct-to-Consumer | 1,860 | 1,692 | 10% |
| Filmed Entertainment | 590 | 891 | -34% |
Analysis and Outlook
Paramount Global's strategic focus on its direct-to-consumer segment is yielding positive results, as evidenced by the growth in subscribers and revenue for Paramount+. However, the company faces ongoing challenges in its traditional TV media and filmed entertainment segments, which continue to impact overall financial performance. The company's efforts to streamline operations and achieve cost savings are crucial as it navigates a rapidly evolving media landscape.
Investors and analysts will be closely monitoring Paramount Global's ability to sustain growth in its DTC segment while addressing the challenges in its other business areas. The anticipated completion of the Skydance transactions in 2025 may also play a significant role in shaping the company's future strategic direction.
Explore the complete 8-K earnings release (here) from Paramount Global for further details.
