Lionsgate reports results for second quarter FY2025

Lionsgate And Lionsgate Studios Report Results For Second Quarter Fiscal 2025

SANTA MONICA, Calif. and VANCOUVER, BC — Lions Gate Entertainment Corp. (NYSE: LGF.A, LGF.B) (“Lionsgate”) and Lionsgate Studios Corp. (Nasdaq: LION) (“Lionsgate Studios”) today reported second quarter results for the quarter ended September 30, 2024. This press release includes consolidated financial results for parent company Lionsgate as well as operating results for Lionsgate Studios (also referred to as the “Studio Business”), comprised of the Motion Picture and Television Production segments.

Lionsgate reported second quarter revenue of $948.6 million, operating loss of $88.6 million, and net loss attributable to Lionsgate shareholders of $163.3 million or $0.68 diluted net loss per share on 239.3 million diluted weighted average common shares outstanding. Adjusted net loss attributable to Lionsgate shareholders in the quarter was $102.5 million or $0.43 adjusted diluted net loss per share on 239.3 million diluted weighted average common shares outstanding. Adjusted OIBDA loss was $17.7 million in the quarter.

“In a transitional, disrupted and difficult year for our industry, we reported disappointing financial results in the quarter,” said Lionsgate and Lionsgate Studios CEO Jon Feltheimer. “Our performance underscores the need to adhere even more rigorously to the risk mitigated business models, slate diversification and strict financial discipline that have always served us well. The combination of a return to strong content slates, the continued stellar performance of our film and television library and sure-handed execution will put us back on the path to solid growth and shareholder value creation. We’re pleased to report STARZ remains on track to reach its full year target of $200 million Adjusted OIBDA and remains well-positioned for the upcoming separation of our Studio and STARZ businesses.”

Trailing 12-month library revenue was $892 million, up 3% from last year’s second quarter.

Lionsgate continues to be on track for the full separation of its Studio and STARZ businesses by the end of the calendar year subject to the timing of regulatory approvals.

Lionsgate noted that after the quarter approximately 8% of its eligible U.S. employees elected to take advantage of voluntary severance and early retirement packages as it continues to streamline its business by adjusting to the economic realities of the marketplace.

Second Quarter Results

The Studio Business, comprised of the Motion Picture and Television Production segments, reported revenue of $823.7 million, an increase of 4% from the prior year quarter. Studio operating loss was $34.8 million and Adjusted OIBDA loss was $6.3 million, compared to $76.0 million operating income and $97.9 million Adjusted OIBDA in the prior year quarter.

Motion Picture segment revenue increased by 3% to $407.1 million and segment profit decreased to $2.6 million. The year-over-year revenue increase was due to the increase in wide theatrical releases, while the decline in segment profit was driven by the underperformance of Borderlands as well as the soft performance of other wide theatrical releases in the quarter.

Television Production segment revenue increased 6% to $416.6 million while segment profit decreased to $24.4 million. Revenue growth was driven by higher series deliveries to STARZ, while segment profit was impacted by lingering effects of last year’s strikes in a heavily backloaded year.

Media Networks North American revenue of $343.0 million was comparable to the prior year, as higher ARPU was offset by lower subscribers. Segment profit decreased to $26.9 million on higher content amortization. North American OTT subscribers declined 2.6% to 12.4 million compared to the prior year quarter while, on a sequential basis, North American OTT subscribers declined by 800,000. Subscriber totals were impacted as expected in the quarter by the $1.00 price increase initiated for existing U.S. customers in the month of September. Management believes it will return to sequential OTT subscriber growth in North America in the December quarter.

Lions Gate Entertainment Corp – Segment Information

Subscriber Data. The number of period-end service subscribers is a key metric which management uses to evaluate a non-ad supported subscription video service. We believe this key metric provides useful information to investors as a growing or decreasing subscriber base is a key indicator of the health of the overall business. Service subscribers may impact revenue differently depending on specific distribution agreements we have with our distributors which may include fixed fees, rates per basic video household or a rate per STARZ subscriber. The following table sets forth, for the periods presented, subscriptions to our Media Networks and STARZPLAY Arabia services, excluding subscribers in territories exited or to be exited:

                                                                 As of                         As of
                                          ----------------------------  ----------------------------
                                           6/30/23   9/30/23  12/31/23   3/31/24   6/30/24   9/30/24
                                          --------  --------  --------  --------  --------  --------
                                                                               [Amounts in millions]
                                          ----------------------------------------------------------
Starz North America[1]
 OTT Subscribers                             12.51     12.73     13.43     13.38     13.20     12.40
 Linear Subscribers                           9.48      9.21      8.85      8.42      8.10      7.75
  Total                                      21.99     21.94     22.28     21.80     21.30     20.15
Other[*][2]
 OTT Subscribers[3]                           3.03      3.06      2.45      2.52      2.62      3.05
Total Starz[*]
 OTT Subscribers[3]                          15.54     15.79     15.88     15.90     15.82     15.45
 Linear Subscribers                           9.48      9.21      8.85      8.42      8.10      7.75
  Total Starz[*]                             25.02     25.00     24.73     24.32     23.92     23.20
STARZPLAY Arabia[4]                           2.80      3.04      3.19      3.22      3.25      2.46
Total [including STARZPLAY Arabia][*][3]     27.82     28.04     27.92     27.54     27.17     25.66

Subscribers by Platform[*]:
 OTT Subscribers[3][5]                       18.34     18.83     19.07     19.12     19.07     17.91
 Linear Subscribers                           9.48      9.21      8.85      8.42      8.10      7.75
  Total Global Subscribers[*][3]             27.82     28.04     27.92     27.54     27.17     25.66

* excluding territories exited or to be exited

                                        As of                         As of
                 ----------------------------  ----------------------------
                  6/30/23   9/30/23  12/31/23   3/31/24   6/30/24   9/30/24
                 --------  --------  --------  --------  --------  --------
                                                      [Amounts in millions]
                 ----------------------------------------------------------
OTT Subscribers      1.59      1.58      1.10      0.57       n/a       n/a

4. Represents subscribers of STARZPLAY Arabia, a non-consolidated equity method investee.
5. OTT subscribers includes subscribers of STARZPLAY Arabia, as presented above.