Paramount Global

Good afternoon, my name is Krista and I'll be your conference operator today. I would like to welcome everyone to Paramount's second quarter 2026 earnings conference call. At this time, all lines have been muted to prevent any background noise. After the speaker's remarks, the company will take questions from the analyst community. I would now like to turn the call over to Kevin Crichton, Paramount's EVP of Corporate Finance and Investor Relations. Sir, you may begin your conference call.

Good afternoon, and thank you for taking the time to join us for the Paramount Q2 2026 earnings call. I'm Kevin Creighton, EVP of Corporate Finance and Investor Relations. Joining me today is our Chairman and Chief Executive Officer, David Ellison, our Chief Financial Officer, Dennis Cinelli, and our Chief Strategy and Operating Officer, Andy Gordon. As a reminder, we will be making forward-looking statements today that involve risks and uncertainties. Our remarks will also include non-GAAP financial measures, and reconciliations of these measures can be found in our earnings letter or in our trending schedules, which contain supplemental information. These can be found on our investor relations website. I'll now turn it over to David for a few brief remarks before we address analyst questions.

Thanks, Kevin, and good afternoon, everyone. A year ago, we set three priorities for the new Paramount. Invest in storytelling, scale our direct-to-consumer business globally, and drive enterprise-wide efficiency. Twelve months in, I'm proud to say we are delivering on all three. We nearly doubled our theatrical slate, deepened our roster with top-tier creative talent, greenlit 40 new and returning series for Paramount+, expanded our sports portfolio with the UFC, Zufa Boxing, while broadening our partnerships with UEFA, adding to an already strong light-up that includes the NFL, WNBA, PGA Tour, March Madness, and more. At the same time, we've made meaningful progress in technology and product development, including with the convergence of our streaming platforms, which is well underway, helping create a better, more seamless experience for users. And these investments are translating into stronger performance, Paramount Plus grew to nearly 82 million subscribers, delivered its best quarter of retention ever, and posted double-digit growth in total view hours, all while expanding margins throughout the first half of the year. Among the quarter's many highlights, our studio's business saw continued year-over-year profitability improvement while growing its pipeline, with more than 90 series in production across the group this year. The early turnaround reinforces our confidence in the strategy and we continue to make significant investments in theatrical and premium series to drive future engagement, subscriber growth and long-term value. Across our broader portfolio, TV media's profit grew 14%, even as revenue declined amid the broader industry shift away from linear. And enterprise-wide, we're tracking to over $2.7 billion in run rate efficiencies by year's end and still expect a total of $3 billion plus from the Skydance Paramount merger. We're also continuing to advance our proposed combination for Warner Bros. Discovery, a deal that builds on the foundations we've established by creating a stronger, well-capitalized, creative-first company with a scale to compete alongside Netflix, Amazon, Apple, and others, benefiting consumers, theatrical exhibition, and creators alike. The clearances we've received from competition authorities and governments represent 65 jurisdictions worldwide, confirm that the facts of the law are on our side, and we remain confident the transaction will be completed. One year in, we're proud of the progress we've made, a testament to the extraordinary talent, hard work and dedication of our people around the world. Our conviction in our strategy is stronger than ever and we're energized and optimistic about the opportunities ahead. And with that, I'll turn it back over to Kevin for your questions.