LION

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5:00 p.m. ET Chief Executive Officer - Jon Feltheimer Executive Vice President and Chief Financial Officer - James Barge Executive Vice President, Investor Relations - Nilay Shah Vice Chairman - Michael Burns Chief Operating Officer - Brian Goldsmith Chairman of the TV Group - Kevin Beggs Chairman of the Motion Picture Group - Adam Fogelson Chief Revenue Officer - Jim Packer Senior Adviser to the Office of the CEO at Lionsgate and Co-CEO of 3 Arts - Brian Weinstein Operator: Good afternoon, and welcome to the Lionsgate First Quarter Fiscal 2027 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Nilay Shah, EVP, Investor Relations. Please go ahead. Nilay Shah: Good afternoon. Thank you for joining us for the Lionsgate Studios Corporation's Fiscal 2027 First Quarter Conference Call. We'll begin with opening remarks from our CEO, Jon Feltheimer, followed by remarks from our CFO, Jimmy Barge. After their remarks, we'll open the call for questions. Also joining us on the call today are Vice Chairman, Michael Burns; COO, Brian Goldsmith; Chairman of the TV Group, Kevin Beggs; Chairman of the Motion Picture Group, Adam Fogelson; Chief Revenue Officer, Jim Packer; and Senior Adviser to the Office of the CEO at Lionsgate and Co-CEO of 3 Arts, Brian Weinstein. The matters discussed on the call also include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors. This includes the risk factors set forth in our public filings for Lionsgate Studios Corp. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. I'll now turn the call over to Jon. Jon Feltheimer: Thank you, Nilay, and good afternoon, everyone. I'm pleased to report another quarter with strong financial results and growing momentum across our business. Our pure-play content strategy is working. The balance sheet is strengthening faster than anticipated. Our portfolio of intellectual property is becoming ever more franchise-driven and valuable. Library monetization remains a significant competitive advantage, and our company is increasing strategic optionality in a media landscape that continues to place growing value on scaled content assets. In our film business, we've launched 2 new marquee branded properties, Michael and The Housemaid in a span of just 4 months, ending the first half of the calendar year with domestic box office market share over 10%. Driven by these films and our strong library, our Motion Picture Group reported its best first quarter results ever. Beyond the box office results, both our performance and the type of content driving this performance, bold, original and provocative, are reinforcing the Lionsgate brand in real and tangible ways, attracting new creative projects, expanding our filmmaker relationships and paving the way for new partnerships that will continue to drive us forward. We've lined up a slate that includes more than a dozen branded repeatable properties over the next 3 years. 4 of these films have wrapped production and are being readied for release. Early indicators for The Hunger Games: Sunrise on the Reaping, show that it has the potential to become one of the biggest Hunger Games movies ever. The marketing campaign for Mel Gibson's Epic 2-part The Resurrection of the Christ will kick off next month with the theatrical rerelease of The Passion of the Christ in Dolby and 4K. We wrapped production on John Rambo directed by Jalmari Helander and starring breakout talent Noah Centineo as we rebuild the Rambo property into an important Lionsgate film and television franchise. It's set for release next June. And we also wrapped production on Caine with Donnie Yen directing and starring in a movie featuring one of the most talked about characters in the John Wick universe also set for release next year. We're preparing to start production on 3 others. We just announced the addition of Brittany Snow, Co-Star of our Netflix hit series, The Hunting Wives, to The Housemaid's Secret cast that also includes Sydney Sweeney, Kirsten Dunst and Paul Anthony Kelly. Production is slated to begin in October for a December 2027 release. Writer Chris Thomas Devlin has turned in an incredible script for our groundbreaking new chapter of The Blair Witch in partnership with Blumhouse and James Wan's Atomic Monster to be directed by Rising Star and the 3 Arts client, Dylan Clark. And we're out to cast on Naruto, which is shaping up to be a major tentpole, the next movie from record-breaking Spider-Man: Brand New Day filmmaker, Destin Daniel Cretton based on the top-ranked Manga property in the world. And with our diversified slate strategy, we're balancing this trove of IP with great original storytelling driven by incredible talent in front of and behind the camera. All of this is happening against the backdrop of a resurgent domestic box office heading for its first $10 billion year since before the pandemic. Turning to television. There has been a paradigm shift that we believe plays to our strengths. The name of the game in television used to be deep relationships with a handful of major buyers, first the broadcast networks, then the leading cable platforms and more recently, the streamers. But today, there are many new players throughout the television ecosystem, and our strategy is focused on diversification, having the creative strengths, pricing flexibility and innovative business models to play across a wide range of different platforms and different types of series in an increasingly fragmented world. We're on the cusp of going perfect 13 for 13 in current scripted series renewals. And notably, that success is spread across 12 different buyers. Our ability to cast a wide net was evident in the 2 series pickups we secured this week. Amazon's pickup of Friends co-creator Marta Kauffman's improvisational comedy DINKS, which if you didn't know, means dual income, no kids, driven by an innovative partnership with Media giant Publicis Groupe and the pickup of the medical action thriller Trauma, think Die Hard in the hospital, starring Richard Madden with Prime Video streaming in the U.K. and Paramount+ streaming in the U.S. and the rest of the world. But one thing in the television landscape hasn't changed, the rewards of playing the long game. When we bought Starz in 2016, the original Power series had just finished its third season. Lionsgate and Starz collaborated on growing Power through a total of 6 hit seasons, extending it into 3 hit spin-offs, Ghost, Raising Kanan and Force and expanding the Power Universe with the upcoming new pickups, Power: Origins and Power: Legacy. Together, we've built a strong, enduring and immensely valuable franchise spanning at least 6 different series and more than 200 episodes. That value was evident last week when we licensed the first 4 Power series to Netflix, all 4 internationally and the original Power worldwide for the next 3 years beginning in November. The deal proved 3 things: streamers need a lot of content, we have a lot of content, and that content becomes more and more valuable as it plays everywhere in the world. Turning to the library. We reported another strong quarter of trailing 12-month revenue. What's interesting to note because it speaks to the depth and diversity of our library is that the biggest individual contributor in the quarter was a 38-year-old movie, Dirty Dancing. It's also worth mentioning that our film and television backlog grew to a robust $1.5 billion in the quarter. We expect this strong backlog to translate into growth in upcoming library quarters. In closing, we continue to see encouraging signs in our operating environment. The domestic box office is strengthening as a new generation of moviegoers embraces the theatrical experience. New buyers and partners are emerging throughout the television ecosystem for those companies willing to look outside the usual places. Streamer demand for film and television series is helping to keep our library business strong. Our 3 Arts business continues to scale and diversify at a time when management companies have become increasingly valuable gateways to the media ecosystem. And AI properly harnessed is creating new opportunities to reduce cost, enhance revenue and accelerate the production process. That's the environment to which we're continuing to adapt our studio, becoming a little leaner, ever more focused, collaborating with digital and traditional storytellers alike, maintaining an entrepreneurial approach to both content and culture and above all, continuing to grow our incredibly valuable portfolio of branded intellectual properties. Now I'll turn things over to Jimmy. James Barge: Thanks, Jon, and good afternoon, everyone. I'll briefly discuss our fiscal first quarter 2027 Studio financial results and provide an update on the balance sheet. For the quarter, Lionsgate Studios revenue grew 48% year-over-year to $777 million, while adjusted OIBDA improved to $79 million. Operating income was $26 million, reported diluted loss per share was $0.10 and diluted adjusted earnings per share was $0.06. Free cash flow was $129 million in the period, reflecting strong operating performance, including the April release of Michael. Trailing 12-month library revenue was $987 million, roughly in line with the prior year, and our backlog of $1.5 billion was up 21% year-over-year. The continued strength of the library and our growing backlog demonstrate the enduring value of our intellectual property portfolio and provide an important source of recurring revenue and cash flow across market cycles. Studio segment profit, which reflects our Motion Picture and Television segment profits before corporate overhead expense, increased significantly year-over-year to $115 million. We began highlighting our Studio segment profit a few quarters ago because this important metric is generally more comparable to the studio adjusted OIBDA figures reported by many of our peers. The increase in Studio segment profit was driven by strong Motion Picture performance. Looking further into Motion Picture, we saw revenue more than double year-over-year to $587 million, while segment profit reached $105 million, the highest first quarter Motion Picture segment profit in the company's history. Results were driven primarily by the exceptional performance of Michael as well as the continued strength in ancillary contributions from The Housemaid. Turning to television. Revenue was $189 million and segment profit was $10 million. Revenue and segment profit were expectedly down versus the prior year due to the timing of episodic deliveries. We remain confident that television will achieve significant year-over-year growth in fiscal 2027 due to both our previously announced outlook to double scripted episodic deliveries and our recently announced Power licensing deal with Netflix. We expect TV segment profit to improve sequentially in the second quarter and then accelerate in the back half of the year. Now turning to the balance sheet. We ended the quarter with net debt of approximately $1.5 billion, a $121 million sequential improvement. The primary driver was better-than-expected free cash flow performance, reflecting better in-quarter theatrical performance and recent release ancillary revenues. As a result, leverage improved to 4.3x, down nearly 2 turns since the end of March and reaching our mid-4x leverage target earlier than anticipated. We continue to believe that deleveraging will occur naturally over time with growth in adjusted OIBDA and free cash flow. And we're encouraged by the progress we've already made during the first quarter. Additionally, we ended the quarter with $426 million of unrestricted cash on the balance sheet and $800 million of available capacity on our revolver. Our capital structure remains well positioned with no significant near-term corporate debt maturities. We remain highly confident in our fiscal 2027 outlook, which is supported by continued monetization of recent theatrical releases across downstream windows increasing television deliveries, sustained strength in our library business and the Q3 release of The Hunger Games: Sunrise on the Reaping. Accordingly, we continue to expect significant growth in adjusted OIBDA and free cash flow this fiscal year and beyond. Now I'd like to turn the call over to Nilay for Q&A. Nilay Shah: Thanks, Jimmy. And before we start the Q&A section, I want to remind everyone that last quarter, we added some slides to our IR website that highlighted several drivers of our business, and we plan on updating those slides in the coming days. Operator, can we open the call for Q&A? Operator: [Operator Instructions] Our first question today is from Vikram Kesavabhotla with Baird. Vikram Kesavabhotla: My first one is a higher-level question on the industry. When we look at the box office trends this year, I think there's been a few examples where existing proven IP has continued to perform very well. But I think there's also been some examples where proven IP has struggled or at least struggled relative to broader expectations. I'm curious to hear your perspective on some of the factors that are influencing the success and relevance of IP in today's market. And the real question behind that is, when we look at your film slate over the next few years, I think there are several examples of sequels or revivals of existing films and franchises. As you've gone through the process of greenlighting these ideas, what are some of the factors that have given you confidence in the health and the relevance of the IP that you're working with and the likelihood of your film slate being successful in aggregate? And I realize it's a bit of a high-level question, but it'd just be great to hear your thoughts on how the film slate is positioned relative to some of the broader industry trends that we're observing. Adam Fogelson: I appreciate the question. Obviously, each individual studio has its own perspective and the metrics that are used to determine what makes a film a good idea or a good bet include box office and all kinds of other ancillary opportunities that come with it. As it relates to Lionsgate specifically, I can tell you that the lens that we're looking at with these projects is does the movie in question answer an audience demand or interest about a particular character or a particular storyline or when we invite the audience to think about an idea that they may never have considered, do they get excited. And we have a very robust ongoing communication with our fan bases. Our digital team is, I think, top of class in making sure that we are constantly listening to our fans. And so you could pick any of the titles, large or small across our slate for the coming years. And I would tell you that the characters that the stories are focused on or the storylines that are being advanced are answering very direct and very specific questions that have come from the prior films. And as long as you are then also making each of those films for the right budget and with the right filmmakers, I think while nothing is certain, your odds of success go up exponentially. And as I said, every single one of the films on our slate has more than met the threshold criteria for myself and Jon and the company to feel great about what we're doing. And then it was Adam, if you didn't know earlier. Vikram Kesavabhotla: Okay. Great. I appreciate the comments there. Separate from that, I also wanted to follow up on the licensing agreement with Netflix for the Power Universe. Can you talk more about the potential impact of that deal and what that could represent for the value of your library? And perhaps as part of that, if you could just talk about the broader health of your library business today and how that revenue contribution can trend from here, that would be great. Adam Fogelson: I'll have Jim Packer answer that. Jim Packer: First of all, it's just a really great time right now to have library series, especially high-profile signature franchises in the marketplace. I'm sure you've seen a couple of the announcements that are out there. This particular deal has a couple of strategic wins. First of all, Power has been strong internationally, but this is going to be transformative for the show and for the franchise. Netflix has an international footprint and the entire franchise is going to grow significantly, I think, because of that. And then we also try to set ourselves up for the next cycle, too. So we only did a 3-year deal. So domestically, we'll have Kanan and Force available for the first time in the U.S. for SVOD. Internationally, we're going to have Origins and Legacy available. So it's going to set us up for an even bigger global opportunity at a time when I think the franchise is going to be hitting some new peaks. And really, I think long term, while these deals don't -- of this scale will happen every day, we have a number of important series returning to our distribution organization over the next couple of years. We have Orange is the New Black, Mythic Quest, Mad Men post HBO. And I think all of those are going to give us another global pipe at a time when series are really in demand. So I feel very good about it. Operator: The next question is from Omar Mejias with Wells Fargo. Omar Mejias Santiago: Jon or Michael, I just wanted to see if you could give us an update on the M&A front. There's been several press reports indicating parties interest in Lion, including Bollore, Banijay among others. Just want to get your updated thoughts on how you're thinking about the consolidated media environment and where Lion sits within the ecosystem. Michael Burns: Thanks for the question. In spite of what the headline suggests, we haven't engaged in any substantive conversations. As a policy, we don't comment on M&A speculation. What I will say is this, given the strength and the breadth of our IP and our franchises, we remain one of the most compelling assets in a rapidly consolidating marketplace. We also recognize that scale matters more than ever in this environment, and that's precisely why the value of our portfolio only becomes more relevant over time. And given the M&A backdrop, the strength of our assets and our stand-alone operating performance, we believe we have real strategic optionality, and that's something we're focusing on every single day. Omar Mejias Santiago: That's very helpful. And maybe just shifting to the earnings power of the business. I mean you guys just started the year very strong. Clearly, you have a lot of momentum on the Motion Picture business. On the TV side, you just did the licensing deal with Netflix that you talked about and you have a very robust backdrop backlog. So just curious, how should we think about the earnings power as we look ahead into '27 and beyond with all the pieces putting it all together? Jon Feltheimer: So I think we've certainly been out there with a bit of a guide to a strong earnings year '27. You mentioned '27, that's this year, actually. And we're well on our way to a really strong year. I think the momentum should continue into '28, and we'll see nice growth in '28 as well. Obviously, our earnings sometimes depends on the performance of 3 or 4 different pieces of content. But certainly, if they do better than sort of what we're covering as our base case, I think we can have a really strong year in '28 as well. Operator: The next question is from Brent Penter with Raymond James. Brent Penter: A few questions. First one on 3 Arts. You talked about the value of that business. Can you update us on the strategic review process there? Is that still ongoing? And then just can you update us fundamentally on that business? It sounds like some positive trends, but anything you can say there? Brian Weinstein: Sure. Brent, it's Brian Weinstein speaking. Thanks for the question. Look, to take it in parts, first, we are focused and remain focused on potential transactions, but not ones that are purely financial. There's some interesting strategic elements in some of the deals we're looking at. So we continue to explore those conversations and find some interest in that. I'd say, operationally, we're pleased with the business, the trajectory of the business beyond the core, as we've talked about over time, we're seeing nice momentum, real momentum in new verticals like sports and creator. That's not our roots, but that's where we see lots of excitement. In sports, we've got activity and additions with our clients, Travis Kelce and Myles Garrett and now Taylor Rooks and new clients like Colston Loveland and Sophie Cunningham. But that group together with others, it just demonstrates the strength of the platform and opportunity to develop content around those relationships. So that's how we think about the sort of new areas. And then getting back to the core, at the same time, our bread and butter, our collaboration between Lionsgate and 3 Arts has really never been stronger. So we have projects like The Hunting Wives and real robust development like Ride or Die and Las Culturistas, the award show and The Algorithm and Medal of Honor and others that's driving about roughly 30 shared projects between Lionsgate and 3 Arts. And then let's finally, just talking about the industry and the asset class at large, transaction like THE TEAM transaction with Providence Equity buying more of that asset, just reinforce what we know, which is these are scarce businesses with premium multiples and scale of talent representation businesses like 3 Arts remain a good place to be. So overall, I hope that answers it, but that's how we feel. Brent Penter: Yes, it does. And then on Michael, now that we're seeing the strong from that movie. I think there's even more anticipation about the sequel. So just any updates on maybe where that is in process and potential timing? And then what are the puts and takes on the sequel in terms of the economics? I think maybe some of the film from the first movie can now be used for that. So anything just in terms of budget or cost that you can talk about? Adam Fogelson: Yes, Brent, it's Adam. Thanks for the question. We are hard at work on making sure that we can put together a sequel that is worthy of the success and the enthusiasm that the first movie generated, and we're fully engaged with everybody. While we are not ready to announce everything at the moment, I would tell you that we are targeting a production start towards the end of this year and early next. And think that somewhere between the end of calendar '27 and the first half of calendar '28 would be a current thought of roughly where the movie could go. We do have a number of sequences, particularly some big musical sequences that were shot previously that are almost sure to be incorporated. But we are mostly focused right now on how to make sure we can deliver at the right price, the biggest, best sequel that is what the audience is going to want and deserve after the experience we gave them the first time. So we're not ready to give guidance on the budget yet, but we certainly will be able to take advantage of some stuff that we previously shot, as I had said before. Brent Penter: All right. And then final question for me. The Paramount Warner Bros deal now on pause and the trial not scheduled until March. I guess what's the view from Lionsgate on that situation? How does it affect you kind of being in limbo here? And then if Lionsgate -- are you all better off if that does or doesn't close? Jon Feltheimer: Yes. It's kind of a mouthful. I'd say this, uncertainty is the worst thing for our business and uncertainty and delay is not good for anybody. We know David Ellison well. We did his first series, Manhattan, some years ago. I can tell you that I was super impressed with him. He loves content. I have no reason not to believe that he will be investing very heavily in content, whether it's a 30 film slate or whether it's at a bolstered Paramount+, I would say for us, a more -- a better financed streamer, a competitive streamer will be better for us, better for us in terms of original programming, better for us in terms of selling library. And so that part of it, I think, is a real positive for us. I can tell you we're already -- we've already sold them a new television show. We hadn't been doing that much with Paramount. We hadn't been doing that much with HBO. So I'm already seeing signs of it. I'm already talking to them about potentially co-financing feature films. That would be good for us, and that would be good for the industry. And I would say, overall, the more movies that are in the marketplace, while it's competitive, it's good as the rising tide moves all boats up. And so I guess I would say I'm in favor of this transaction, but most importantly, I'm in favor of certainty and getting all of the delay out of it. Operator: The next question is from Sean Diffley with Morgan Stanley. Sean Diffley: Two, if I may. First, you talked about a paradigm shift in the TV demand backdrop. I was hoping you could elaborate on that a bit. What would you say your special sauce is in terms of why your content is resonating so much with the streamers? And then second, your utilization of AI. I know you guys have a deal with Runway. Maybe you could just talk about how you're using AI to energize and leverage your IP and what kind of cost savings you envision or what kind of creative unlocks you're seeing? Kevin Beggs: It's Kevin speaking. Just to talk generally about the state of the market to quote The Godfather of Soul, I feel good. There's a lot going on, the stability that Jon alluded to and the return to active buying on both the Paramount and the HBO front has been great for us. We just announced the Trauma series yesterday with Paramount and Prime Video. I think that's helpful. I think our secret sauce is we're finding ways to get shows on in sometimes nontraditional ways, a fully funded sponsored series in DINKS, partnering with Amazon. And Publicis is a great example. Trauma starting with a U.K. buyer at Amazon Prime U.K., moving into a U.S. play and a global buyer. All of that's stacking up to great things that are not the traditional way that shows are sold and made. And then underpinning all of that is the great library successes that Jim alluded to. We're now relative to our peers in the television space, we're not even preteens. They started in the '50s. We started in the 2000s, yet we have 20 series under distribution or that we own and have made that are over 100 episodes. And they come in a nice cyclical way, obviously, with some wins here and there, which is a nice offset to some of the deficiting that we're doing over a slower cadence and then ultimately pay off in something like the Power deal. So a lot of it is just blocking and tackling, being in the market with great talent, great partners. Our 3 Arts partnership is amazing and all the great producers we're working with. Jon Feltheimer: I would add that Kevin is doing a great job getting people to move to places that other people don't really want to go to like Serbia, like Ireland and like New Jersey. So... Michael Burns: Some of us like Ireland. Let me take the AI question. It's Michael. We really believe that AI is a real opportunity for us, both to grow our revenue and to lower cost in content production and across all of our day-to-day operations. It's essential that we deploy these tools responsibly, efficiently and in partnership with the creative talent leading our projects, but we're really excited about this tool. Operator: The next question is from David Joyce with Seaport Research Partners. David Joyce: A couple of questions. First, I wanted to ask a bit more on the Power deal. Granted Netflix gives much more global exposure than Starz would get since they're technically just in the U.S. But what is the benefit to Starz here? Anything directly financial? Or is it just like a catch-up platform and helps with the branding? And then secondly, I wanted to ask about the Michael movie. How should we think about the construct of ultimate profitability? Over what period do you kind of think about that? How does the factor of the family being involved impact that? Just wanted to try to drill down on the math there. Jon Feltheimer: Yes. I think success that we have as the owner of Power still inures back to Starz because they continue to have nonexclusive run and they've then got -- as we discussed, they've got 2 brand-new shows Origins and Legacy. One of those, they're co-financing together with us. I would say even since the separation, Starz still is a really important platform partner for us. We want them to do well. And I think they're especially a good partner for certain kinds of focused content. So I'd like them to think that when we have a win on something that we financed for many years, that's good. And of course, we want it to be good for them. And I would say, Jeff and I and Jim Packer and some of us, Kevin Beggs, we spend a lot of time together trying to figure out if there are various win-wins. And as you probably know, they are the first piece of our Pay-1 window for our Motion Pictures, and they are the Pay-1 home or first window home for Michael Jackson. And so I think, again, we've got a great relationship. And again, we're happy always for their success, and I think they're happy for ours. Adam Fogelson: And David, as it relates to your Michael question, I'll just give the answer generally. I would say there's nothing particularly unusual about Michael in so much as the estate and the filmmakers get an appropriate share of profit participation. And there was nothing unusual in this particular case. We also were sharing both the financial responsibility and the upside with our partners at Universal around the rest of the world, save for Kino in Japan. And so I think you can think of this as pretty traditional. Obviously, it was a big movie. It was an expensive movie. The marketing and distribution globally was handled very efficiently. And while we look at profitability over roughly a 10-year cycle, obviously, it's front-loaded over the first few years more meaningfully and not only with the great theatrical performance we had, but the movie was a top performer in PVOD. We're seeing incredible adoption of the movie now as it's moving into its more downstream opportunities, and we think there's going to be a really nice long tail on it. But there is nothing unusual about how this movie was constructed in terms of how the profit is being shared amongst all the participants. Operator: The next question is from Matthew Harrigan with StoneX. Matthew Harrigan: Reaching back to early kind of formative Lionsgate, Jon used to talk a lot about the superior multiple you're getting on ancillaries on films relative to the box office rentals, and it was pretty striking. I know you've got a huge problem now because you've got some billion-dollar box office films, maybe the second Michael, maybe Naruto and certainly the 2 Resurrection movies. So presumably, that's harder to do. But do you think that for yourselves and for the industry, you still have a positive trend on that? And a few of the movies, I mean, I think Resurrection in particular, should just have phenomenal library value. Do you think in a couple of years, you're going to get a step function lift in the library OCF just in kind of the number of hits you're having? I know people are concerned about the roll-off in 3 years, but it looks like some of the pressure there could get offset by growth in the library revenues from both the creative side and deployment of new technologies and obviously, penetration of new technologies, both in the U.S. and overseas. Jon Feltheimer: If I get your question right, Matthew, I think you sort of made an interesting point, which is when you look at sort of some version of what percentage you're going to get downstream. If you've got a $1 billion movie, obviously, it's going to be a bigger number downstream, but it may not be a bigger multiple number downstream. But I would say we'll take that. We'll take as many billion-dollar movies and television shows as we possibly can. I would say the lift that we get, you've seen this, we've seen this every time we've talked about it on these calls when we have the next Hunger Games coming out, right, you're going to see a huge lift that we're going to get across every ancillary platform for Hunger Games. N. Ow you bring up technology. I've never seen through my 42 years, I hate to say it, but 42 years, I have never seen technology not creating incremental benefit and more additional lift for good content and strong content. And so -- and Kevin mentioned it, Adam mentioned it, we have amazing content. This is one of the reasons we keep putting slides up now on our site, just to remind people how incredible our portfolio of intellectual property and recurring intellectual property is. Everything I put up on the site and maybe people don't realize that every single one of those titles, I think there are over 40 are things that actually we are currently working on some version of, if not more than one version of. But in any case, I have never seen going through history that any technological advances don't inure to the benefit of incremental revenue of good library content, and I believe that to be the case today. Matthew Harrigan: And actually, just as a quick follow-on. This is a little nerdy, but 8K, I mean, AI, in particular, you can render pretty much the entire library, I imagine, in 8K. I mean do you think that's something that will have some appeal over time? I mean every year at CES, it looks beautiful. And obviously, the commercial translation has taken more time than people thought going back to the '21 Tokyo Olympics. I know on the sports side, obviously, it's much harder to do than on what you do on movies and TV, but still interesting, pretty immersive. Jon Feltheimer: I think, again, we have to -- as Michael said, we have to make sure when we're doing generative AI to work really closely with the talent. We always see these as tools that enhance the work that we do with talent. I can say we're experimenting and playing with it in so many different ways. It's certainly using it significantly preproduction, post production. We're using it now. I just looked at an example where we've got a piece of talent we actually manage at 3 Arts and they do these podcasts that have never been a video, and we're actually creating video versions of them, and they're really quite good. There are just some tremendous use cases right now that we're playing with. And again, a year from now, it's going to be a whole different world there. But I can tell you, it's saving us money. It's making us more efficient across the board. Every single employee here at this company is trained in AI and is using a 95% adoption right now across the business. And every day, we find a more interesting use for it that can save us money or enhance revenue. So it's going to be a lot of fun going forward. Jim Packer: Yes. And I would say -- One other thing I would say on the 8K, I do think every time you've seen a new format come around, you have a lot of people that will buy those formats. We have a thing called Lionsgate Limited, where we do 4K. So I don't anticipate that we will have any problem at all with the kinds of movies that Adam is producing, keeping that pipeline full for the next-generation technology. Operator: The next question is a follow-up from Vikram Kesavabhotla from Baird. Vikram Kesavabhotla: Maybe first, I want to follow up on the upcoming Hunger Games film. Can you talk about the initial reception to the marketing efforts there and some of the other data points you're monitoring to inform the potential performance of that film? And maybe related to that, how is this impacting the library demand for the previous films in that franchise? And how meaningful of a contribution can that be to the business this year? Adam Fogelson: Yes, it's Adam. I'll take the first part, and then I'll pass it on to Jim. Look, I think when we came out with the first trailer for The Hunger Games, we were pretty public about the fact that it sat just behind Michael as the most viewed trailer in the history of the company. We have seen with every subsequent piece of content that we have a very, very excited and engaged audience and that we are bringing a new audience into the fold. This book meaningfully outsold the prior book. To the question that was asked earlier, these particular games, The Second Quarter Quell have been a rabid topic of conversation amongst fans of The Hunger Games for a long period of time. And this movie is setting about with an extraordinary cast and obviously, a filmmaking team that has got this movie in their DNA. We are answering the question that the audience has been asking with an incredible cast. And I will also tell you that -- it is one of the best testing movies that we've ever had at the studio. So we think we have all of the tools necessary to deliver an incredible result. Jim Packer: And I would say on the library front, we're always very strategic on how we window these things. And I think this particular situation because we had a long runway to plan, we have literally every single month planned out between pretty much now through the launch of the film in a very kind of calculated way. We also strategically had windows on Netflix and some other streamers a while ago. And that just builds the fandom and builds the excitement for the brand. Overall, I think you see overall our reported 12-month trailing is always continuing to go up. It's partly due to these new franchises coming into the marketplace and how we draft off of them, whether for transactional or licensing. And so I think you'll continue to see strength in our trailing 12 because of it. Vikram Kesavabhotla: Okay. Great. And maybe just a couple of other follow-ups on the Motion Picture segment. You called out the ancillary performance of The Housemaid as a contributor to the performance this quarter. How much more runway is left for that as a tailwind to your performance in fiscal '27? And then maybe related to that, can you talk about kind of the runway for contribution from Michael, given the strength that you're seeing in the windows post the theatrical run? James Barge: Yes. I mean there's definitely a lot of continuing ancillary revenues on The Housemaid will tell you, remember that the Pay-1, a portion of that was in Q4, okay? So we've got a lot more coming. Michael, in particular, I mean, you saw major contributions, obviously, in the first quarter and a lot more to come over the ensuing 3 quarters of the year. So -- that's a lot of strength. And we've got -- looking ahead, we've got Hunger Games coming up in our third quarter. So we really feel great about that and how we finish out the year. And you see a lot of backlog that's going to be flowing through as well. So we're in a position of strength. Vikram Kesavabhotla: Okay. Great. And then just the last question for me. Jimmy, you talked about achieving your mid-4x target on leverage earlier than you expected. Can you just talk more about how we should see the leverage trend going forward and some of the key factors that will allow you to continue delevering the balance sheet? James Barge: Well, expect continuing deleveraging, but I would say we did achieve this earlier than I had anticipated, always confident that we would get there. But I expect throughout the year, we're going to continue in this kind of, call it, low to mid-4 Obviously, we have the 3 Arts potential put in Q4, as we previously talked about, that would be about a 0.5 turn increase. But even if that's the case, we quickly delever after that. And then I think we move into this fiscal '28 of 3 to 3.5x leverage and then below 3 after that. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Nilay Shah for any closing remarks. Nilay Shah: Thanks, everyone. Please refer to the Press Releases and Events tab under the Investor Relations section of our website for a discussion of certain non-GAAP forward-looking measures discussed on this call. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Lionsgate Studios, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lionsgate Studios wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* Now, it’s worth noting Stock Advisor’s total average return is 964% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. 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Interested in Lionsgate Studios Corp.? Here are five stocks we like better. Strong quarterly performance: Lionsgate Studios’ fiscal first-quarter revenue rose 48% year over year to $777 million, driven by motion-picture results. Free cash flow reached $129 million, while motion-picture segment profit hit a record $105 million, led by Michael and The Housemaid. Growth expected from films and television: Management anticipates significant adjusted OIBDA and free-cash-flow growth in fiscal 2027, supported by upcoming releases such as The Hunger Games: Sunrise on the Reaping, doubled scripted-episode deliveries and a new international Netflix licensing agreement for the Power franchise. Balance sheet improved while strategic flexibility remains: Net debt declined by $121 million to approximately $1.5 billion, reducing leverage to 4.3 times. Lionsgate said it has not held substantive M&A discussions despite market speculation, but emphasized the strategic value of its franchise portfolio and intellectual property. The Netflix-Lionsgate Rumor Exposed a Bigger Shift in Media M&A Lionsgate Studios (NYSE:LION) reported fiscal first-quarter revenue growth of 48% year over year to $777 million, driven by strong motion-picture performance and contributions from recent releases, while management said it expects significant adjusted OIBDA and free-cash-flow growth for fiscal 2027. The company posted adjusted OIBDA of $79 million and operating income of $26 million for the quarter. Reported diluted loss per share was $0.10, while diluted adjusted earnings per share was $0.06. Free cash flow totaled $129 million, which Chief Financial Officer Jimmy Barge said reflected operating performance including the April release of Michael. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling “Our pure-play content strategy is working,” Chief Executive Officer Jon Feltheimer said, citing a strengthening balance sheet, expanding franchise portfolio and continuing library monetization. He said Lionsgate ended the first half of the calendar year with domestic box-office market share above 10% after launching Michael and The Housemaid. Motion-picture revenue more than doubled from the prior-year period to $587 million, while segment profit reached $105 million, the highest first-quarter motion-picture segment profit in Lionsgate’s history. Barge said results were driven primarily by Michael and continued ancillary revenue from The Housemaid. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High The company said it expects further downstream revenue from both films during the remainder of fiscal 2027. Barge noted that Michael made a major contribution in the first quarter and has additional revenue expected over the following three quarters. Lionsgate also expects the third-quarter release of The Hunger Games: Sunrise on the Reaping to support results later in the year. Feltheimer said Lionsgate has more than a dozen branded and repeatable properties planned over the next three years, with four films already wrapped and preparing for release. He said early indicators suggest The Hunger Games: Sunrise on the Reaping could become one of the biggest films in the franchise. → No Hangover: Revisiting Microsoft One Week After Earnings The studio also said production has wrapped on John Rambo, directed by Jalmari Helander and starring Noah Centineo, with a release planned for next June. Production has also concluded on Caine, directed by and starring Donnie Yen and centered on a character from the John Wick universe. The company is also preparing projects including The Housemaid Secrets, a new Blair Witch installment with Blumhouse and Atomic Monster, and an adaptation of Naruto. Motion Picture Group Chairman Adam Fogelson said Lionsgate evaluates franchise projects based on whether they address audience interest in particular characters and storylines, as well as whether films can be made with appropriate budgets and creative teams. He said the studio actively communicates with fan bases through its digital operations. Regarding a potential Michael sequel, Fogelson said Lionsgate is targeting production around the end of calendar 2027 or early 2028. He said the current expectation is for release between the end of calendar 2027 and the first half of calendar 2028, though the company has not provided budget guidance. Some musical sequences previously filmed are expected to be incorporated, he said. Television revenue was $189 million and segment profit was $10 million. Barge said the year-over-year decline reflected the timing of episodic deliveries, but Lionsgate expects significant television growth in fiscal 2027 as it doubles scripted episodic deliveries and recognizes contributions from a new Netflix licensing agreement for the Power franchise. Feltheimer said Lionsgate is nearing a perfect 13-for-13 renewal record for its current scripted series, with renewals spread among 12 buyers. The company recently secured pickups for DINKS, an Amazon comedy from Friends co-creator Marta Kauffman developed through a partnership with Publicis Groupe, and Trauma, a medical action thriller starring Richard Madden that will stream on Prime Video in the United Kingdom and Paramount+ in the U.S. and other markets. Lionsgate licensed the first four Power series to Netflix internationally, while the original Power series will stream worldwide on Netflix for three years beginning in November. Jim Packer, president of worldwide television distribution, said the deal could expand the franchise’s international reach and create future licensing opportunities as additional series become available. “It’s just a really great time right now to have library series, especially high-profile signature franchises in the marketplace,” Packer said. He also pointed to future opportunities for titles including Orange Is the New Black, Mythic Quest and Mad Men after its HBO availability ends. Trailing 12-month library revenue was $987 million, roughly unchanged from the prior year, while film and television backlog rose 21% to $1.5 billion. Feltheimer said the largest individual library contributor during the quarter was the 38-year-old film Dirty Dancing. Barge said the growing backlog should support future library revenue and cash flow. Management also said it is strategically planning franchise windows around the upcoming Hunger Games release in an effort to build audience interest across transactional and licensing platforms. Net debt fell $121 million sequentially to approximately $1.5 billion. Leverage improved to 4.3 times, reaching Lionsgate’s mid-four-times target earlier than anticipated. The company ended the quarter with $426 million in unrestricted cash and $800 million of available revolver capacity. Barge said Lionsgate expects leverage to remain in the low-to-mid-four-times range through fiscal 2027. He said a potential 3 Arts-related put in the fourth quarter could add roughly half a turn of leverage, but management expects the company to deleverage afterward, targeting three to three-and-a-half times leverage in fiscal 2028 and below three times thereafter. Vice Chairman Michael Burns said Lionsgate had not engaged in substantive merger-and-acquisition discussions despite media reports about possible interest in the company. He said the company does not comment on M&A speculation but views its franchise portfolio and intellectual property as valuable assets in an increasingly consolidating media market. “We believe we have real strategic optionality,” Burns said. Management also highlighted artificial intelligence as an area for cost reduction, production efficiency and potential revenue growth. Feltheimer said Lionsgate is using AI in preproduction and postproduction, while emphasizing the need to work closely with creative talent on generative-AI applications. He said approximately 95% of employees are using AI tools across the business. Feltheimer said new technology historically has created incremental revenue opportunities for strong library content, while Packer said Lionsgate expects demand for new home-entertainment formats to provide additional opportunities for its film catalog. Lionsgate Studios, operating under the ticker NYSE:LION, is a leading global entertainment company specializing in the production, acquisition and distribution of motion pictures, television programming and digital content. Headquartered in Santa Monica, California, and with additional operations in Vancouver, the company develops, finances and markets feature films that span a wide range of genres—from major franchise hits like The Hunger Games and John Wick to independent and specialty titles. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Lionsgate Studios Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record first-quarter Motion Picture segment profit driven by the exceptional performance of Michael and sustained ancillary contributions from The Housemaid. Transitioned to a pure-play content strategy that management believes increases strategic optionality and relevance in a consolidating media landscape. Capitalized on a 'paradigm shift' in television by diversifying buyer relationships across 12 different platforms, moving away from reliance on a few major streamers. Demonstrated the long-term value of the library through a strategic licensing deal with Netflix for the Power franchise, which management expects to be transformative for international growth. Maintained a robust $1.5 billion film and television backlog, representing a 21% year-over-year increase and providing a predictable source of recurring revenue. Integrated AI across the organization with a 95% adoption rate to reduce production costs, enhance revenue, and accelerate pre- and post-production processes. Attributed library strength to the depth of the portfolio, noting that a 38-year-old title, Dirty Dancing, was the quarter's top individual contributor. Anticipates significant growth in adjusted OIBDA and free cash flow for fiscal 2027, supported by the Q3 release of The Hunger Games: Sunrise on the Reaping. Expects Television segment profit to accelerate in the second half of the year as scripted episodic deliveries are projected to double. Targets a production start for the Michael sequel between late 2026 and early 2027, with a release window spanning late 2027 to early 2028. Projects natural deleveraging to reach a 3x to 3.5x range in fiscal 2028, despite a potential 0.5 turn increase in Q4 due to the 3 Arts put option. Plans to launch over a dozen branded repeatable properties over the next three years, including new chapters for the Rambo, John Wick, and Blair Witch franchises. Acknowledged that industry uncertainty and delays, specifically regarding peer M&A like the Paramount transaction, are generally negative for the broader business environment. Noted that while the company is open to strategic transactions for 3 Arts, it is prioritizing deals with strategic elements over purely financial ones. Highlighted that the balance sheet reached mid-4x leverage targets earlier than anticipated due to better-than-expected theatrical performance and ancillary cash flows. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management described the 3-year deal as a way to use Netflix's global footprint to build the franchise's international fandom. The short duration allows Lionsgate to reset for the next cycle when domestic SVOD rights for specific spin-offs become available again. Management declined to comment on specific rumors but emphasized that Lionsgate remains a compelling asset because scale matters more than ever. Stated they have not engaged in substantive conversations despite headlines suggesting interest from outside parties. The film is based on a book that significantly outsold the previous prequel and has achieved some of the highest test scores in studio history. Management is using a calculated monthly windowing strategy for the library titles to build momentum leading up to the theatrical launch. Lionsgate is using generative AI for pre-production, post-production, and even creating video versions of audio-only podcasts. Management emphasized that AI is being used as a tool to enhance talent's work and save costs rather than replace the creative process.

Revenue was $776.6 Million, Up 48% Year-over-Year Operating Income was $25.6 Million Net Loss from Continuing Operations Attributable to Shareholders was $28.8 Million, or $0.10 Diluted Net Loss Per Share Adjusted Net Income from Continuing Operations Attributable to Shareholders was $18.9 Million, or $0.06 Adjusted Diluted Net Income Per Share Adjusted OIBDA was $79.3 Million Net Cash Flows Provided by Operating Activities were $54 Million in the Quarter; Adjusted Free Cash Flow was $128.9 Million SANTA MONICA, Calif. and VANCOUVER, BC, Aug. 6, 2026 /PRNewswire/ -- Lionsgate Studios Corp. (NYSE: LION) today reported first quarter results for the quarter ended June 30, 2026. The Company reported first quarter revenue of $776.6 million, operating income of $25.6 million and net loss from continuing operations attributable to shareholders of $28.8 million, or $0.10 diluted net loss per share on 292 million diluted weighted average common shares outstanding. Adjusted net income from continuing operations attributable to shareholders in the quarter was $18.9 million or $0.06 adjusted diluted net income per share on 302 million diluted weighted average common shares outstanding. Adjusted OIBDA was $79.3 million in the quarter. "I'm pleased to report another quarter of strong financial results and growing momentum across our business," said Lionsgate CEO Jon Feltheimer. "As we continue to execute our franchise strategy across a deep portfolio of branded intellectual properties, generate increased visibility and stability from our film and television library, and benefit from continued improvement in our operating environment, we are positioned to deliver strong growth in fiscal 2027 and beyond." Trailing 12-month library revenue was $987 million. Filmed entertainment backlog (contractual future revenue not yet recognized) increased 21% year-over-year to $1.5 billion. Driven by strong free cash flow, leverage improved by nearly two turns from the March quarter to 4.3x trailing 12-month adjusted OIBDA. First Quarter Segment Results Motion Picture segment revenue of $587.3 million more than doubled from the prior year quarter and segment profit was $105 million, a record for the first quarter. The results were driven by the success of recent theatrical releases, including the billion-dollar worldwide box office performance of Michael, the highest-grossing biopic of all time, and the strong ancillary performance of The Housemaid. Television Production segment revenue of $189.3 million and segment profit of $10.2 million declined from the prior year quarter due to the timing of episodic deliveries. The Company continues to anticipate doubling scripted deliveries in fiscal 2027 relative to fiscal 2026. Lionsgate senior management will hold its analyst and investor conference call to discuss fiscal 2027 first quarter results today, August 6, at 5:00 PM ET/2:00 PM PT. Interested parties may listen to the live webcast by visiting the events page on the Lionsgate Investor Relations website. Alternatively, interested parties can join the webcast directly via the following link. A full replay will become available this evening by clicking the same link. About Lionsgate Lionsgate (NYSE: LION) is one of the world's leading standalone, pure play content companies. It brings together diversified motion picture and television production and distribution businesses, a world-class portfolio of valuable brands and franchises, a premier talent management and production powerhouse at 3 Arts Entertainment and a more than 20,000-title film and television library, all driven by Lionsgate's bold and entrepreneurial culture. For further information, investors should contact:Nilay [email protected] For media inquiries, please contact:Peter D. [email protected] Laurel [email protected] The matters discussed in this press release include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including, but not limited to: the substantial investment of capital required to produce and market films and television series; budget overruns; limitations imposed by our credit facility and notes; unpredictability of the commercial success of our motion pictures and television programming; risks related to acquisition and integration of acquired businesses; the effects of dispositions of businesses or assets, including individual films or libraries; the cost of defending our intellectual property; technological changes and other trends affecting the entertainment industry; potential adverse reactions or changes to business or employee relationships; weakness in the global economy and financial markets, including a recession, bank failures and general economic uncertainty; wars, terrorism and multiple international conflicts that could cause significant economic disruption and political and social instability; labor disruptions and strikes; the volatility of currency exchange rates; our ability to manage growth; the effects of competition on our future business; the impact of and changes in governmental regulations or the enforcement thereof, tax laws and rates, accounting guidance and similar matters in regions in which we operate or will operate in the future; international, national or local economic, social or political conditions that could adversely affect our business; the effectiveness of our internal controls and our corporate policies and procedures; changes in personnel and availability of qualified personnel; the volatility of the market price and liquidity of our common shares; and the other risk factors set forth in Lionsgate's public filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. Additional Information Available on WebsitesThe information in this press release should be read in conjunction with the financial statements and footnotes contained in Lionsgate's Quarterly Report on Form 10-Q for the period ended June 30, 2026, which will be posted on Lionsgate's website at http://investors.lionsgate.com/. Trending schedules containing certain financial information will also be available. LIONSGATE STUDIOS CORP.SEGMENT INFORMATION(Unaudited, amounts in millions) The Company has two reportable business segments: (1) Motion Picture and (2) Television Production. (1) Motion Picture. Motion Picture consists of the development and production of feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired. (2) Television Production. Television Production consists of the development, production and worldwide distribution of television productions including television series, television movies and mini-series and non-fiction programming. Television Production includes the licensing of Starz original series productions to Starz, and the ancillary market distribution of Starz original productions and licensed product (prior to the Starz Separation, licensing to the former Media Networks segment). Additionally, the Television Production segment includes the results of operations of 3 Arts Entertainment. In the ordinary course of business, the Company's reportable segments enter into transactions with one another. Prior to the Starz Separation, the most significant intersegment transactions were licenses of motion pictures and television programming, including Starz original productions, from the Motion Picture and Television Production segments to the former Media Networks segment. These transactions were included in segment results but eliminated in consolidation. Following the Starz Separation, licensing transactions between the Company and Starz are no longer eliminated in consolidation and are reflected in consolidated results from continuing operations. Segment information for the three months ended June 30, 2026 and 2025 is presented in the tables below: The CODM uses segment profit to evaluate the current operating performance of each segment, support future operating plans and forecasts and to allocate resources. Segment profit is defined as segment revenues, less segment direct operating, segment distribution and marketing and segment general and administration expenses. Segment profit excludes, when applicable, corporate general and administrative expenses, restructuring and other costs, share-based compensation, certain content charges as a result of changes in management and/or content strategy, unallocated rent cost and purchase accounting and related adjustments. The Company believes the presentation of segment profit is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the method used by the Company's CODM. Total segment profit, when presented outside of the segment information is considered a non-GAAP financial measure, and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. The Company uses this non-GAAP measure, among other measures, to evaluate the aggregate operating performance of its business. LIONSGATE STUDIOS CORP.RECONCILIATION OF OPERATING INCOME (LOSS)TO ADJUSTED OIBDA AND TOTAL STUDIO BUSINESS SEGMENT PROFIT(Unaudited, amounts in millions) The following table reconciles the U.S GAAP measure, Operating income (loss), to the non-GAAP measures, Adjusted OIBDA and Total segment profit: LIONSGATE STUDIOS CORP.RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO LIONSGATE STUDIOS CORP. SHAREHOLDERS TO ADJUSTED NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO LIONSGATE STUDIOS CORP. SHAREHOLDERS AND BASIC AND DILUTED EPS FROM CONTINUING OPERATIONS TO ADJUSTED BASIC AND DILUTED EPS FROM CONTINUING OPERATIONS(Unaudited, amounts in millions, except per share amounts) LIONSGATE STUDIOS CORP.RECONCILIATION OF NON-GAAP ADJUSTMENTS FOR NET BORROWINGS AND REPAYMENT OF PRODUCTION AND RELATED LOANS(Unaudited, amounts in millions) The following tables reconcile the non-GAAP adjustments for net borrowings and (repayment) of production and related loans to the changes in the related balance sheet amounts and the consolidated statement of cash flows: LIONSGATE STUDIOS CORP.USE OF NON-GAAP FINANCIAL MEASURES This earnings release presents the following important financial measures utilized by the Company that are not all financial measures defined by U.S. GAAP. The Company uses non-GAAP financial measures, among other measures, to evaluate the operating performance of our business. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. Adjusted OIBDA: Adjusted OIBDA is defined as operating income (loss) before adjusted depreciation and amortization ("OIBDA"), adjusted share-based compensation ("adjusted SBC"), purchase accounting and related adjustments, restructuring and other costs, certain charges (benefits) related to the COVID-19 global pandemic, certain content charges, unallocated rent costs, intersegment profit eliminations, and unusual gains or losses, when applicable. Adjusted depreciation and amortization represents depreciation and amortization as presented on our consolidated statement of operations, less the depreciation and amortization related to the amortization of purchase accounting and related adjustments associated with recent acquisitions. Accordingly, the full impact of the purchase accounting is included in the adjustment for "purchase accounting and related adjustments", described below. Adjusted share-based compensation represents share-based compensation excluding the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements, which are included in restructuring and other expenses, when applicable. Purchase accounting and related adjustments primarily represent the amortization of non-cash fair value adjustments to certain assets acquired in recent acquisitions. These adjustments include the non-cash charge for the amortization of the recoupable portion of the purchase price and the expense associated with the noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense. Restructuring and other includes restructuring and severance costs and certain transaction and other costs, when applicable. COVID-19 related charges or benefits include incremental costs associated with the pausing and restarting of productions including paying/hiring certain cast and crew, maintaining idle facilities and equipment costs, and when applicable, certain motion picture and television impairments and development charges associated with changes in performance expectations or the feasibility of completing the project resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries, which are included in direct operating expense, when applicable. In addition, the costs include early or contractual marketing spends for film releases and events that have been canceled or delayed and will provide no economic benefit, which are included in distribution and marketing expense, when applicable. Content charges include certain charges as a result of changes in content strategy, which are included in direct operating expenses, when applicable. Unallocated rent costs represent rent cost for production facilities that were unutilized as a result of the industry strikes, and therefore such amounts are not allocated to the segments. Intersegment profit eliminations relate to the licensing of products from the Company's Studio Business to the former Media Networks segment prior to the Starz separation on May 6, 2025. Following the Starz Separation, the Company and Starz will continue to be parties to certain commercial agreements and licensing of motion pictures or television programming to Starz. As a result, the impacts of licensing motion pictures or television programming to Starz following the Starz Separation are not eliminated in consolidation and are reflected in the consolidated results from continuing operations. Adjusted OIBDA is calculated similar to how the Company defines segment profit and manages and evaluates its segment operations. Segment profit also excludes corporate general and administrative expense. Total Segment Profit: Total segment profit is considered a non-GAAP financial measure, and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. We use this non-GAAP measure, among other measures, to evaluate the aggregate operating performance of our business. We believe the presentation of total segment profit is relevant and useful for investors because it allows investors to view total segment performance in a manner similar to the primary method used by our management and enables them to understand the fundamental performance of our businesses before non-operating items. Total segment profit is considered an important measure of the Company's performance because it reflects the aggregate profit contribution from the Company's segments and represents a measure, consistent with our segment profit, that eliminates amounts that, in management's opinion, do not necessarily reflect the fundamental performance of our businesses, are infrequent in occurrence, and in some cases are non-cash expenses. Not all companies calculate segment profit or total segment profit in the same manner as defined by our management and similarly titled measures presented by other companies may not be comparable due to differences in the methods of calculation and excluded items. Adjusted Free Cash Flow: Free cash flow is typically defined as net cash flows provided by (used in) operating activities, less capital expenditures. The Company defines Adjusted Free Cash Flow as net cash flows provided by (used in) operating activities from continuing operations, less capital expenditures, plus or minus the net increase or decrease in production and related loans (which includes our production tax credit facility), plus or minus certain unusual or non-recurring items. The adjustment for the production and related loans, exclusive of our production tax credit facility, is made because the U.S. GAAP based cash flows from operations from continuing operations reflects a non-cash reduction of cash flows for the cost of films and television programs prior to the time the Company pays for the film or television program through the payment of the associated production or related loan which occurs at or near completion of the production, or in some cases, over the period revenues and cash receipts are being generated, as more fully described below. The cost of producing films and television programs, which is reflected as a reduction of the U.S. GAAP based cash flows provided by (used in) operating activities from continuing operations, is often financed through production loans. The adjustment for production and related loans is made in order to better align the timing of the cash flows associated with producing films and television programs with the timing of the repayment of the production loans, which is consistent with how management views its production cash spend and manages the Company's cash flows and working capital needs. Borrowings on production loans offset the spend on investment in films reflected in the U.S. GAAP based cash flows provided by (used in) operating activities from continuing operations and thus increase the Adjusted Free Cash Flows as compared to the U.S. GAAP based cash flows provided by (used in) operating activities from continuing operations and subsequent payments on production loans reflect the payment for the production of the film or TV program and reduce Adjusted Free Cash Flows as compared to the U.S. GAAP based cash flows provided by (used in) operating activities from continuing operations. The adjustment for the production tax credit facility is made to better reflect the timing of the cash requirements of the production, since a portion of the amounts expended initially are later refunded through the receipt of the tax credit, as more fully described below. The production tax credit facility reduces the timing difference between the payments for production cost and the receipt of the tax credit and thus reflects the cash cost of the film or television program at or near the time the film or television program is produced and completed. Part of the cost of a film or television program is effectively funded through obtaining government incentives, however, the incentives are not received until a future period which could be a few years after the completion of the film. The tax credit facility reflects borrowings collateralized by the tax credits to be received in the future and thus by including these borrowings in Adjusted Free Cash Flow it has the effect of better aligning the receipt of the tax credits with the timing of the production and completion of the film and television programs, which is consistent with how management views its production cash spend and manages the Company's cash flows and working capital needs. Borrowings under the tax credit facility reduce the cash spend reflected in the U.S. GAAP based cash flows provided by (used in) operating activities from continuing operations and thus increase adjusted free cash flows and payments on the tax credit facility offset the tax credit receivable collection reflected in the U.S. GAAP based cash flows provided by (used in) operating activities from continuing operations and reduce adjusted free cash flows as compared to the U.S. GAAP based cash flows provided by (used in) operating activities from continuing operations. The Company believes that it is more meaningful to reflect the impact of the payment for these films and television programs when the payments are made under the production loans and the receipt of the tax credit when the film is being produced in its Adjusted Free Cash Flow. Adjusted Net Income (Loss) - Continuing Operations Attributable to Lionsgate Studios Corp. Shareholders: Adjusted net income (loss) from continuing operations attributable to Lionsgate Studios Corp. shareholders is defined as net income (loss) from continuing operations attributable to Lionsgate Studios Corp. shareholders, adjusted for share-based compensation, purchase accounting and related adjustments, restructuring and other items, unallocated rent costs related to unutilized facilities, net gains or losses on investments and other, gain or loss on extinguishment of debt, COVID-19 related charges (benefit), settlement litigation charge, unusual gains or losses, when applicable, as described in the Adjusted OIBDA definition, and net of the impact of the adjustments on noncontrolling interest. Adjusted Basic and Diluted EPS - Continuing Operations: Adjusted basic earnings (loss) per share is defined as adjusted net income (loss) from continuing operations attributable to Lionsgate Studios Corp. shareholders divided by the weighted average shares outstanding. Diluted EPS is similar to basic EPS but is adjusted for the effects of securities that are diluted based on the level of adjusted net income (loss) from continuing operations, similar to U.S. GAAP. Overall: These measures are non-GAAP financial measures as defined in Regulation G promulgated by the SEC and are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. We use these non-GAAP measures, among other measures, to evaluate the operating performance of our business. We believe these measures provide useful information to investors regarding our results of operations and cash flows before non-operating items. Adjusted OIBDA is considered an important measure of the Company's performance because this measure eliminates amounts that, in management's opinion, do not necessarily reflect the fundamental performance of the Company's businesses, are infrequent in occurrence, and in some cases are non-cash expenses. Adjusted Free Cash Flow is considered an important measure of the Company's liquidity because it provides information about the ability of the Company to reduce net corporate debt, make strategic investments, dividends and share repurchases. Adjusted Net Income (Loss) from Continuing Operations Attributable to Lionsgate Studios Corp. Shareholders and Adjusted EPS are considered important measures of the Company's business operations as, similar to Adjusted OIBDA, these measures eliminate amounts that, in management's opinion, do not necessarily reflect the fundamental performance of the Company's businesses. These non-GAAP measures are commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. However, not all companies calculate these measures in the same manner and the measures as presented may not be comparable to similarly titled measures presented by other companies due to differences in the methods of calculation and excluded items. A general limitation of these non-GAAP financial measures is that they are not prepared in accordance with U.S. generally accepted accounting principles. These measures should be reviewed in conjunction with the relevant U.S. GAAP financial measures and are not presented as alternative measures of operating income, cash flow, net income (loss) from continuing operations, or earnings (loss) per share from continuing operations as determined in accordance with U.S. GAAP. Reconciliations of the adjusted metrics utilized to their corresponding U.S. GAAP metrics are provided above. View original content to download multimedia:https://www.prnewswire.com/news-releases/lionsgate-reports-results-for-first-quarter-fiscal-2027-302845344.html

Lionsgate Studios Corp. (LION) came out with quarterly earnings of $0.06 per share, beating the Zacks Consensus Estimate of a loss of $0.01 per share. This compares to a loss of $0.32 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +700.00%. A quarter ago, it was expected that this company would post earnings of $0.24 per share when it actually produced earnings of $0.37, delivering a surprise of +54.17%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Lionsgate Studios Corp., which belongs to the Zacks Media Conglomerates industry, posted revenues of $776.6 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 10.45%. This compares to year-ago revenues of $525.9 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Lionsgate Studios Corp. shares have added about 42.2% since the beginning of the year versus the S&P 500's gain of 12.8%. While Lionsgate Studios Corp. has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Lionsgate Studios Corp. was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.04 on $700.25 million in revenues for the coming quarter and $0.43 on $3.33 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Media Conglomerates is currently in the bottom 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Madison Square Garden Entertainment (MSGE), is yet to report results for the quarter ended June 2026. This live entertainment company is expected to post quarterly loss of $0.42 per share in its upcoming report, which represents a year-over-year change of +16%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Madison Square Garden Entertainment's revenues are expected to be $166.83 million, up 8.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lionsgate Studios Corp. (LION) : Free Stock Analysis Report Madison Square Garden Entertainment Corp. (MSGE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Walt Disney (DIS) came out with quarterly earnings of $2.06 per share, beating the Zacks Consensus Estimate of $1.88 per share. This compares to earnings of $1.61 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +9.57%. A quarter ago, it was expected that this entertainment company would post earnings of $1.49 per share when it actually produced earnings of $1.57, delivering a surprise of +5.37%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Disney, which belongs to the Zacks Media Conglomerates industry, posted revenues of $25.25 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.91%. This compares to year-ago revenues of $23.65 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Disney shares have lost about 13.7% since the beginning of the year versus the S&P 500's gain of 13%. While Disney has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Disney was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.75 on $25.1 billion in revenues for the coming quarter and $6.83 on $101.72 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Media Conglomerates is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Lionsgate Studios Corp. (LION), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of +96.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Lionsgate Studios Corp.'s revenues are expected to be $703.1 million, up 33.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Walt Disney Company (DIS) : Free Stock Analysis Report Lionsgate Studios Corp. (LION) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Lionsgate Studios Corp. (LION) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. Consensus earnings estimates for the next quarter and full year have moved considerably higher for Lionsgate Studios Corp., as there has been strong agreement among the covering analysts in raising estimates. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $0.04 per share for the current quarter represents a change of +112.5% from the number reported a year ago. Over the last 30 days, one estimate has moved higher for Lionsgate Studios Corp. while one has gone lower. As a result, the Zacks Consensus Estimate has increased 45%. The company is expected to earn $0.33 per share for the full year, which represents a change of +466.7% from the prior-year number. There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, two estimates have moved up for Lionsgate Studios Corp. versus no negative revisions. This has pushed the consensus estimate 80% higher. The promising estimate revisions have helped Lionsgate Studios Corp. earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Lionsgate Studios Corp. shares have added 30.8% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lionsgate Studios Corp. (LION) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: May 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Lionsgate Studios Corp (NYSE:LION) reported a third consecutive quarter of $1 billion trailing 12-month library revenue, showcasing consistent performance. The company secured renewals for 12 of its 13 scripted series, indicating strong demand and setting the stage for increased episodic deliveries. Lionsgate Studios Corp (NYSE:LION) leaned into AI to enhance the creative process, aiming to improve quality and efficiency across its operations. The successful release of movies like 'The Housemaid' and 'Michael' demonstrated the company's ability to compete effectively at the box office. The company ended fiscal '26 with strong free cash flow of $190 million, reflecting improved operating performance and cash returns on content investments. Lionsgate Studios Corp (NYSE:LION) reported a year-over-year decline in revenue to $907 million for the quarter. The television segment experienced lower revenue and profit due to the timing of episodic deliveries and a lower volume of scripted deliveries compared to the prior year. The company's net debt stood at approximately $1.6 billion, although it showed improvement from the previous quarter. The fiscal '27 profit cadence is expected to be more back-end loaded, particularly in the television segment, which may affect financial predictability. Despite strong performance, the company faces uncertainties in the timing and release schedules of its film slate and episodic deliveries, impacting future financial outcomes. Warning! GuruFocus has detected 9 Warning Signs with LION. Is LION fairly valued? Test your thesis with our free DCF calculator. Q: What are the drivers behind the recent positive trends in the box office, and do you think this improvement in consumer demand is sustainable? A: John Felthimer, CEO, noted that the growth in the exhibition business is being driven by Gen Z, who now make up about 30-34% of the market. This demographic is engaging with large screen formats, making movie-going more of an event. Adam Fogelson, Chairman of the Motion Picture Group, added that studios have learned to cater to the experiences moviegoers want, and there is more content on the release schedule that will continue to drive attendance. Q: Can you provide more details on the financial outlook for fiscal '27, especially regarding profit cadence? A: Jimmy Barge, CFO, explained that fiscal '27 will not be as back-end loaded as fiscal '26. Television will be more back-end loaded due to the timing of episodic deliveries, with about 90% of episodes falling in Q2, Q3, and Q4. The company expects significant growth in adjusted OEBITDA and free cash flow. Q: What is the potential impact of the Paramount Skydance and Warner Brothers Discovery combination on your library business? A: Kevin Beggs, Chairman of the TV Group, expressed excitement about the potential for a strong unified streaming player, which could open up platforms to outside studio suppliers like Lionsgate. Jim Packer, Chief Revenue Officer, added that both platforms will compete internationally, and Lionsgate's content fits well with this competition. Q: How does Lionsgate plan to balance the mix of tentpole films versus mid-budget films in the future? A: Adam Fogelson stated that the success of films like The Housemaid and Michael has reinforced their strategy. The criteria for film selection remain unchanged: creative potential, marketing strategy, and a rational business plan. Lionsgate plans to have two to four tentpole films, with the rest fitting into various cost categories. Q: How is AI expected to impact studio margins and operations? A: John Felthimer highlighted that AI is seen as a net positive for Lionsgate, enhancing productivity and analytics across the company. AI is being used in pre-production, post-production, and operations, and the company is excited about engaging fans with digital toolkits to interact with content. For the complete transcript of the earnings call, please refer to the full earnings call transcript.