Paramount Global said Top Gun: Maverick powered a 126% surge in filmed entertainment sales last quarter, surpassing Titanic to become the studio’s biggest domestic release of all time. Theatrical revenue jumped by $630 million from the year before.
Total DTC subscribers rose to nearly 64 million, reflecting the removal of 3.9 million subscribers in Russia where Paramount and other media companies suspended operations in Russia in March after Vladimir Putin’s invasion of Ukraine.
Paramount+ added 4.9 million subscribers, growing the count to over 43 million. Some 1.2 Russia subs were removed.
The stock is down nearly 4% before the open following the report, that showed adjusted diluted EPS from continuing operations of 64 cents, down from 97 cents. Total revenue at $7.8 billion rose from $6.5 billion in the year earlier quarter. The numbers beat Wall Street forecasts, but also showed wider losses in streaming due to higher spending. Execs will hold a conference call at 8:30 ET.
Consolidated operating income fell 33% to $819 million.
“Paramount continues to build momentum with the assets, strategy and ability to compete — and win,” said CEO Bob Bakish. “At the heart of that growth was our hugely popular content — from the cultural phenomenon and #1 movie in the world, Top Gun: Maverick, to the most popular show in the country, Yellowstone. Our deep and growing library of valuable IP, coupled with the strength of our best-in-class assets, ensures we are well-positioned to continue to maximize value for our shareholders.”
Pluto TV grew global monthly active users (MAUs) to nearly 70M.
DTC revenue increased 56% year-over-year, with subscription revenue up 74% to $830M, reflecting paid subscriber growth for Paramount+. Advertising revenue rose 25% year-over-year, reflecting growth from Paramount+ and Pluto TV, driven by increased impressions on both services.
Paramount+ revenue grew 120%. Acquisition and engagement was led by Halo, 1883, The Lost City, Sonic the Hedgehog 2, Jackass Forever, Star Trek: Strange New Worlds, and the UEFA Champions League. It cited strong growth in domestic and international hours watched per household.
Adjusted OIBDA — operating income before depreciation and amortization and a widely used indicator — was a negative $445 million, way wider than the $143 million operating loss reported a year ago and reflecting increased investment in DTC services.
This is the second earnings period to come around amid growing anxiety on Wall Street about continued streaming spend without visibility on profits.
In the TV Media space, revenue rose 1% year-over-year, reflecting growth in content licensing revenues, partially offset by lower advertising and affiliate revenues.
Advertising revenue decreased 6% year-over-year, as pricing only partially offset the impact of lower linear impressions and FX. The ad market has been described by a stream of executives lately as increasingly “choppy.”
Affiliate and subscription revenue declined 3% year-over-year, driven by lower revenues in international markets, where the company restructured key affiliate agreements that shifted revenue from pay television to DTC. Adjusted OIBDA fell 8% year-over-year on the lower advertising and affiliate revenues.
Licensing and other revenues grew 27% year-over-year.
In Filmed Entertainment, Top Gun: Maverick — $1.3 billion to date at the box office globally and is still going — and is a top 10 domestic films of all times. Paramount’s The Lost City and Sonic the Hedgehog 2 also debuted at number no. 1 at the box office in the June quarter.
Licensing and other revenue grew 27% year-over-year, driven by the monetization of recent theatrical releases. Adjusted OIBDA increased $129 million, in reflecting the strong performance of current year releases.
As of June 30, the company had $4 billion of cash on its balance sheet and a committed $3.5B revolving credit facility that remains undrawn.
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