Skydance Q3 Revenue Rises 5% as Gross Debt Reaches $87 Billion

Skydance Corporation’s third-quarter results announcement on November 9, 2026 showed Paramount Skydance (PSKY ) revenue for the quarter ended September 30, 2026 rising 5% to $7.025 billion on a supplemental pro forma year-over-year basis, with adjusted EBITDA of $1.0 billion. The results exclude Warner Bros. Discovery, which Skydance acquired on October 6, 2026 using $47 billion of new equity and $57 billion of new secured debt, leaving the combined company with $87 billion of gross debt after closing and related debt activity.

Operating income was $368 million and included $187 million of restructuring and transaction-related costs. Net earnings attributable to the parent were $73 million. Adjusted net earnings were $506 million, with the reconciliation including $275 million of discrete tax items, primarily a reserve for uncertain tax positions, alongside restructuring and transaction-related adjustments.

The segment comparisons use supplemental pro forma and recast 2025 presentations because the earlier Skydance transaction split the prior-year results into separate accounting periods and the company adopted a new segment structure in 2026.

Streaming and Studios Offset TV Declines

Direct-to-Consumer revenue rose 11% to $2.510 billion, led by a 21% increase in Paramount+ revenue. That growth reflected subscriber gains and approximately 14% growth in average revenue per user; management attributed the improved monetization to earlier price adjustments and accelerating advertising growth. Segment adjusted EBITDA was $225 million as planned investment in UFC and original programming increased costs.

Studios revenue grew 23% to $1.496 billion, reflecting secondary-market licensing and content produced for third parties. TV Media revenue fell 7% to $3.024 billion as advertising and affiliate revenue declined. The advertising comparison included the absence of Telefe and Chilevisión following their disposals, while affiliate revenue reflected continued pay-TV subscriber erosion. TV Media generated $1.028 billion of adjusted EBITDA, a 34.0% margin that Skydance attributed to cost-saving initiatives.

Free cash flow, which Skydance defines as operating cash flow less capital expenditures, was $31 million after $174 million of restructuring, transaction-related and transformation costs. That cash generation preceded the acquisition’s expansion of gross debt from $15.0 billion at quarter-end.

Debt Reduction Depends on Integration Savings

Management targets at least $6 billion of annualized run-rate synergies, net of reinvestment, within three years. The work spans corporate overhead, real estate and facilities, marketing, technology, and procurement and vendor management.

Skydance expects approximately $4 billion of one-time cash costs across the transformation, including roughly $1.5 billion to $2 billion in 2027. Its goals are a 3.0x net leverage ratio by the end of 2029 and investment-grade credit metrics within approximately three years of closing. Until the leverage target is reached, excess cash beyond business reinvestment and the current dividend will go toward debt repayment.

Warner Bros. Film Slate Reduces Fourth-Quarter Expectations

For the fourth quarter, management expects underperformance of the Warner Bros. film slate to slow Studios revenue growth and reduce profit by up to $200 million versus prior expectations, more than offsetting improved Paramount film results. Full-year 2027 guidance is scheduled to accompany the fourth-quarter 2026 results.

Skydance targets more than $10 billion of annual free cash flow in 2030. With Warner Bros. Discovery entering consolidated results in the fourth quarter, the central question is whether streaming and studio growth, together with the planned savings, can generate that cash while the company absorbs integration costs and reduces acquisition debt.