LOS ANGELES, CALIFORNIA (Reuters) -Paramount Skydance ( PSKY ) said it will make incremental programming investments of more than $1.5 billion next year to grow its streaming video business and revitalize its film studio, as it delivered its first quarterly results since the completion of the $8.4 billion merger.

The company projected total revenue of $30 billion in 2026, as its streaming business grows more profitable and the company runs more efficiently. 

Shares of the company were up 5% in trading after the bell.

Paramount Global and Skydance Media completed their merger in August, installing new leadership at the media company.

CEO David Ellison has been moving rapidly to revive the venerable studio, winning a bidding war in August to distribute a new James Mangold heist film starring Timothée Chalamet, locking up "South Park" co-creators Matt Stone and Trey Parker in a five-year exclusive deal, and striking a partnership with Activision to bring its popular "Call of Duty" game to the big screen.

"Our industry is undergoing a generational transformation, and at Paramount, we are determined not only to adapt, but to lead," Ellison wrote in a letter to investors.

In his letter, Ellison highlighted the streamlining of Paramount Skydance's ( PSKY ) studio and distribution operations under one leadership team, and plans to reinvigorate the film studio, whose 2025 film slate "underperformed." The company also plans to implement a unified technology stack for Paramount+, Pluto TV and BET+ to drive cost efficiencies and enhance performance.

"This isn't about nostalgia for Hollywood's past; it's about proving a legacy studio can move with tech-company speed. Ellison is pairing consolidation with investment, betting that a smaller, sharper Paramount can grow faster than its sprawling predecessor," said eMarketer senior director Jeremy Goldman.

Paramount has also looked to acquire Warner Bros Discovery ( WBD ), submitting a trio of bids to take over its film and television studios, its HBO Max streaming service and its cable networks, which include CNN and TNT.

Asked about the reports during the investor call on Thursday, Ellison declined to comment, but added that when it comes to acquisitions, "there's no must haves for us - we really look at this as buy versus build."

Paramount, whose assets include the CBS broadcast network, its namesake film studio and cable networks including Comedy Central, Nickelodeon and MTV, reported total revenue of $6.7 billion for its third quarter. Analysts were expecting a revenue of $6.97 billion. 

Streaming revenue increased 17% year over year, largely due to the growth of Paramount+. Television revenue declined 12% from the same time last year, as advertising revenue fell. The film group's revenue rose 30% from a year ago, primarily due to the consolidation of Skydance.  

Paramount raised its cost-cutting target to at least $3 billion, up from initial forecasts of $2 billion in savings.

The company said it will cut about 1,600 jobs as it divests Telefe in Argentina, which operates television stations in Buenos Aires and other markets, and Chilevision in Chile. The reductions are on top of the 1,000 employees it laid off in late October, and the 600 employees who opted to take voluntary severance packages rather than return to the office full-time.

(Dawn Chmielewski reporting from Los Angeles, Juby Babu reporting from Mexico City; Editing by Sriraj Kalluvila and Alan Barona)