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Paramount's third-quarter earnings report revealed both challenges and opportunities for the newly merged Paramount Skydance, highlighting CEO David Ellison's aggressive growth and cost-cutting strategy.

While revenue for the period fell short of Wall Street expectations, the company raised its cost-savings target from the Skydance merger to $3 billion, signaling confidence in long-term profitability.

The company reported $6.7 billion in revenue from July to September, slightly below analysts' forecast of $7 billion.

Advertising revenue, a key revenue stream, continued to decline, falling 12% to $1.465 billion, contributing to a net loss of $257 million, Deadline reported.

Despite the shortfall, shares climbed about 3% in after-hours trading, reflecting optimism over the company's future direction.

Ellison outlined a bold plan in a shareholder letter, referring to the merged entity's initiatives as "North Star priorities."

These include investing in streaming, expanding globally, and identifying efficiencies to drive long-term free cash flow.

"Nearly 100 days have passed since we launched the new Paramount, and we are pleased with the progress to date," Ellison wrote.

A major part of the strategy involves cost reductions. Paramount announced a new round of layoffs affecting roughly 1,600 employees, largely linked to divesting assets in Argentina and Chile.

Combined with earlier reductions, the company is trimming about 2,000 positions, or roughly 10% of its workforce.

Paramount+ Hits 79 Million Global Subscribers

Paramount is also mandating a five-day work week beginning in January, with voluntary buyouts offered to employees who choose not to return to the office full-time.

Paramount is balancing cuts with investments in content and technology. The company plans to raise Paramount+ subscription prices in the first quarter of next year to fund an expanded content slate and platform improvements.

According to CNBC News, Paramount+ currently has over 79 million global subscribers, with CEO Ellison emphasizing that boosting streaming growth is central to the company's strategy.

On the content front, Paramount Skydance has secured major deals, including a 7-year, $7.7 billion agreement for UFC rights, exclusive long-term US and Latin America rights for Zuffa Boxing, and partnerships with Activision and the creators of "South Park."

Additionally, the Duffer Brothers, creators of Netflix's "Stranger Things," will join the company in mid-2026.

Ellison is also pursuing larger acquisitions, including multiple bids for Warner Bros. Discovery.

"I think it's important to know there's no must-haves for us.We really look at this as buy versus build, and we absolutely have the ability to build to get to where we want to go," he said.

Despite a Q3 revenue miss, Paramount Skydance remains bullish, projecting $30 billion in revenue and $3.5 billion in operating income before depreciation and amortization for 2026.