Skydance Sees Up to $200 Million Q4 Hit From Warner Bros. Films as Studios Revenue Rises 23%

Skydance said the Warner Bros. film slate will cut its fourth-quarter profit by up to $200 million, even as revenue at its studios business rose 23% in the third quarter, according to the company's first earnings report since it completed its acquisition of Warner Bros. Discovery. The results, released after the market closed on Monday, Nov. 9, 2026, cover the quarter that ended Sept. 30 and reflect only the Paramount Skydance business, because the Warner Bros. Discovery deal did not close until Oct. 6, Variety reported.

Revenue was $7.03 billion, up 5% from a year earlier, and net income was $73 million, or six cents per share, a swing from a loss a year earlier, according to Variety. Adjusted earnings were 45 cents per share. Adjusted EBITDA was $1.0 billion, a 14.2% margin, the company said in its letter to shareholders.

Studios lift the quarter

Studios revenue grew 23% year over year to $1.5 billion, reflecting what the company called a strong quarter for secondary market licensing and content produced for third parties. The segment's adjusted EBITDA was $129 million, an 8.6% margin, according to the shareholder letter signed by chairman and CEO David Ellison and co-CEO Ynon Kreiz.

The letter said Paramount Pictures "continues to perform well and is expected to double its output in 2026 with 15 releases." In the third quarter, PAW Patrol: The Dino Movie grossed more than $160 million worldwide, and David Ayer's original film Heart of the Beast, starring Brad Pitt, has grossed more than $180 million globally, the company said.

Warner Bros. slate to weigh on fourth quarter

"We expect the Warner Bros. film slate in Q4 to underperform," the company said in the letter. Skydance expects slower Studios revenue growth and a profit impact of up to $200 million versus prior expectations for the fourth quarter. Chief financial officer Dennis Cinelli said on the earnings call that the figure includes films already released during the quarter as well as those still to come, according to a transcript of the call published by The Motley Fool.

"The Warner Bros. film slate has underperformed this year and will weigh on Q4 results," Ellison said on the call. He said the company would apply the same playbook it used at Paramount, "greenlighting more selectively." The letter said that approach includes testing earlier and tailoring marketing and release strategy to the size of each opportunity.

Tom Cruise's Warner Bros. dark comedy Digger struggled at the box office, finishing fifth on U.S. and Canadian charts in its opening weekend in October, Reuters reported.

Ellison told analysts the company's film studios are now unified under one leadership team, with the creative teams at Warner Bros., Paramount, New Line and Skydance continuing to lead their labels. The call came on the same day Skydance named former Marvel Studios executive Jeremy Latcham to run DC Studios, replacing James Gunn and Peter Safran, whom Ellison thanked for their contributions.

Holiday releases and a 30-film 2027

The company listed six film releases across Paramount Pictures and Warner Bros. Pictures for the final two months of the year: The Cat in the Hat, which opened on Friday, Nov. 6; Ebenezer, starring Johnny Depp, arriving Friday, Nov. 13; Focker-in-Law on Nov. 25; Dune: Part Three on Dec. 18; The Angry Birds Movie 3 on Dec. 23; and Mr. Irrelevant on Christmas Day.

Skydance said it is on track to release more than 30 theatrical films and produce more than 180 television and streaming series in 2027. Asked about the merger's consent decree, which an analyst said requires 30 theatrical releases in each of the first two years, 32 a year in years three to five, an additional $300 million of annual U.S. production and five years of ownership of both studio lots, Ellison said "all of this was planned for and has no negative impacts on our plan." He added that the decree "only requires 20 wide releases scaling to 22." Titles he cited for 2027 include Sonic the Hedgehog 4, A Quiet Place Part III and Man of Tomorrow.

Cost cuts, debt and streaming

Skydance reiterated that it expects at least $6 billion in run-rate synergies, net of reinvestment, within three years, with 30% realized in the first year. The company expects to cut at least $2.2 billion from corporate overhead and real estate and $1 billion, or 20%, from marketing, with about $1.4 billion coming from technology, Reuters reported. The Hollywood Reporter, citing TD Cowen, said a further $1.4 billion is expected from procurement and vendor management.

The acquisition was funded with $47 billion of new equity and $57 billion of new secured debt, leaving gross debt of $87 billion and cash of about $10 billion, according to the letter. Ellison and Kreiz wrote that the company starts from "more than $30 billion in annual content spend." Skydance plans to launch a bundle of HBO Max and Paramount+ in early 2027, and it will stop reporting quarterly streaming subscribers starting with its fourth-quarter report, Variety reported. Paramount+, HBO and HBO Max together reach 203 million subscribers.

How analysts responded

Skydance shares were down more than 2% to $8.50 in premarket trading on Tuesday, The Hollywood Reporter reported. Bernstein analyst Laurent Yoon, who rates the stock underperform with a $6 price target, wrote that "legacy WBD seems likely to be a drag near-term, particularly in the fourth quarter." Guggenheim's Michael Morris described the DC Studios leadership change as "the first structural response" and said the 2027 Warner Bros. slate "is where Paramount's greenlight and marketing discipline should show up."

TD Cowen's Doug Creutz, who rates the shares hold with an $8 target, said adjusted EBITDA beat his $947 million estimate, while revenue came in below his $7.13 billion forecast.

Sources

• Variety — Brian Steinberg
• Skydance Q3 2026 letter to shareholders (SEC filing, Exhibit 99)
• The Motley Fool — Skydance Q3 2026 earnings call transcript
• Reuters via New York Post
• The Hollywood Reporter — Georg Szalai