Skydance Stock Falls 8.7% After First Earnings: $87B Debt & Bundle
Skydance shares fell 8.7% after its first post-merger earnings, as $87 billion of debt and a weak Warner Bros. film slate overshadowed a profit beat.
Image: Wikimedia Commons / Chris Brown (zoonabar)
LOS ANGELES, Nov. 10 — Shares of Skydance fell 8.7 percent to $7.94 on Tuesday, wiping out the previous session's 8.6 percent gain, after the company reported its first quarterly results since closing its acquisition of Warner Bros. Discovery on October 6. Skydance's third-quarter shareholder letter showed revenue of $7.03 billion and adjusted earnings of 45 cents a share, alongside $87 billion in gross debt and a warning that a weak Warner Bros. film slate will cut fourth-quarter profit by up to $200 million.
The quarter ended September 30, before the Warner Bros. deal closed on October 6, so the figures cover only the Paramount business. Paramount+ revenue rose 21 percent to $2.13 billion, its fastest growth this year, and the service ended the quarter with 82.2 million subscribers. Adjusted EBITDA came to about $1.0 billion, a 14.2 percent margin, while net income was $73 million.
Key Takeaways
- Shares fell 8.7 percent to $7.94, erasing Monday's 8.6 percent rise; the stock is down 35 percent in 2026.
- Revenue rose 5 percent to $7.03 billion, just below estimates, while adjusted earnings of 45 cents a share beat estimates.
- The Warner Bros. deal left Skydance with $87 billion in gross debt against about $10 billion in cash.
Why Did Skydance Stock Fall After Beating Earnings Estimates?
Investors looked past the earnings beat and focused on the slowdown underneath it. Adjusted EBITDA grew just 0.3 percent from a year earlier, after 27 percent growth in the second quarter. Operating income fell to $368 million from $616 million in the first quarter, and free cash flow dropped to $31 million from $258 million in the second quarter.
The Warner Bros. film slate warning added to the pressure: management said it will cut fourth-quarter adjusted EBITDA by up to $200 million. BofA Securities kept an underperform rating with a $9 price target, and Bernstein also rated the stock underperform with a $6 target. CoreWeave also reported third-quarter revenue of $3.66 billion, up 168 percent.
What Is the $6 Billion Skydance Cost-Cutting Plan and HBO Max Bundle?
Skydance is targeting at least $6 billion in annual cost savings within three years of the Warner Bros. deal, with 30 percent expected in the first year. The savings are to come from consolidating operations, cutting technology costs and removing management layers, and more than 20 integration workstreams are already under way.
The company confirmed plans to launch a bundle of Paramount+ and HBO Max in early 2027, with the two services merged onto the same backend within the first year after closing. Paramount+ added about 600,000 subscribers in the quarter, and average revenue per user rose about 14 percent. Take-Two Interactive also reported results this week, with net bookings down 18 percent.
How Much Debt Does Skydance Have After the Warner Bros. Deal?
The Warner Bros. acquisition left Skydance with $87 billion in gross debt and about $10 billion in cash, a leverage load that dominated the market reaction. The combined company brings together the Warner Bros. and Paramount studios, the CBS broadcast network, CNN and a large group of cable channels under chief executive David Ellison.
The television business remains the weak point: TV Media revenue fell 7 percent to $3.0 billion as advertising dropped 8 percent and affiliate fees fell 5 percent. Studios revenue rose 23 percent to $1.5 billion on licensing and third-party production, while direct-to-consumer revenue rose 11 percent to $2.5 billion.
| Segment | Revenue | Change | Adjusted EBITDA |
|---|---|---|---|
| Direct-to-consumer | $2.5B | +11% | $225M |
| Studios | $1.5B | +23% | $129M |
| TV Media | $3.0B | -7% | $1.0B |
Microsoft overtook Nvidia as the second-most valuable listed company after Nvidia shares slid more than 6 percent. Skydance will report combined results and full-year guidance with its December-quarter results, and the Paramount+ and HBO Max bundle is due in early 2027.
Frequently Asked Questions
Why did Skydance stock fall 8.7% after its first post-merger earnings?
The beat covered only the pre-merger Paramount business, while adjusted EBITDA barely grew and management warned a weak Warner Bros. film slate will cut fourth-quarter profit by up to $200 million.
How much debt does Skydance have after buying Warner Bros. Discovery?
Skydance reported $87 billion in gross debt and about $10 billion in cash after the Warner Bros. deal closed on October 6, 2026.
When will Paramount+ and HBO Max be bundled together?
Skydance plans to launch a Paramount+ and HBO Max bundle in early 2027, with the two services merged onto the same backend within the first year after closing.
