Skydance 3Q26: Trailer Looks Good... Waiting for the Movie

Q3 was more of a prologue than Chapter 1 of Skydance’s journey following the WBD acquisition. Pro forma financials with WBD won’t be available until sometime before the Q4 print, leaving us on the edge of how this story could unfold. There are more questions than answers, but we come out net positive after the print. PSKY on track: if this were a standalone legacy-PSKY print, it would’ve been clean-ish with revenue +5%, EBITDA roughly flat, and Opex efficiencies on track against raised guidance. Paramount+ revenue accelerated to 21% and Studio grew 23%, driven by licensing. Legacy WBD seems likely to be a drag near term, particularly in Q4; Studio performance has underperformed, with management flagging up to a ~$200M Q4 profit shortfall from WBD theatrical performance, and WBD’s larger Linear exposure also remains a likely drag. Flat to positive FCF in 2027 is possible, with ~$10B of cash at closing partly earmarked for legacy-WBD employee equity conversion and debt repayment, so add’