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01/10 16:41
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed but generally positive outlook. Financial performance shows revenue growth and improved adjusted earnings, despite a loss in EPS. The Amazon deal promises future revenue boosts, and the separation plan indicates a strategic focus on deleveraging. The Q&A highlights optimism about future profits, though management was vague about specifics. Overall, the financial improvements and strategic partnerships suggest a positive short-term stock price movement.
Consolidated Revenue $971,000,000, an increase from the previous year.
Adjusted OIBDA $144,000,000, reflecting a year-over-year increase.
Operating Income $36,000,000, showing improvement compared to the previous year.
Fully Diluted Earnings Per Share Loss of $0.09 per share, compared to a profit in the previous year.
Adjusted Fully Diluted Earnings Per Share Profit of $0.28 per share, indicating a positive change year-over-year.
Net Cash Flow Used in Operating Activities $119,000,000, reflecting cash outflow compared to the previous year.
Adjusted Free Cash Flow Positive $13,000,000, showing improvement year-over-year.
Studio Revenue $714,000,000, a 3.2% increase year-over-year.
Studio Adjusted OIBDA $112,000,000, a significant increase of 45% year-over-year.
Trailing Twelve Month Library Revenue $954,000,000, representing a 22% increase year-over-year.
Motion Picture Revenue $309,000,000, with a decline due to the previous year's strong releases.
Motion Picture Segment Profit $84,000,000, reflecting a decrease due to the previous year's strong releases.
Television Revenue $405,000,000, up 63% year-over-year, driven by strong episodic deliveries.
Television Segment Profit $61,000,000, significantly up year-over-year.
Media Networks Revenue $345,000,000, down year-over-year due to exit from international markets.
Media Networks Segment Profit $25,000,000, reflecting a decrease year-over-year.
North American OTT Subscribers 12,600,000, with a sequential growth of 170,000 subscribers.
Total North American Subscribers 20,000,000, a modest sequential decrease.
Net Debt $2,400,000,000, with $1,800,000,000 at the studio and $568,000,000 at Starz.
Consolidated Leverage 6.5 times, with Starz leverage at 3.3 times.
Starz Net Debt $600,000,000, expected to continue to decline.
New Film Releases: Lionsgate announced the development of 'Den of Thieves 3' and the release of 'Ballerina', a spin-off of the John Wick franchise, scheduled for June 6.
Stage Productions: The company is launching stage adaptations of 'The Hunger Games', 'Dirty Dancing', and 'La La Land', with the latter two targeted for Broadway in 2026.
Video Game Development: Progress is being made on the John Wick AAA video game, which is expected to deliver significant returns.
OTT Subscriber Growth: Starz reported a return to domestic OTT subscriber growth, adding 170,000 subscribers in the quarter.
Distribution Partnerships: Starz expanded its distribution footprint with new bundling deals, including partnerships with Prime Video and YouTube TV.
Library Revenue: Lionsgate's library generated a record $954 million in trailing twelve-month revenue, a 22% increase year-over-year.
Cost Management: The television business is diversifying its buyer mix and cutting costs to adapt to market corrections.
Separation Update: The company is in regulatory review for its separation, expecting a shareholder meeting in mid to late April.
New Pay Deals: Lionsgate extended its exclusive pay one deal with Starz through 2028 and secured a new deal with Amazon Prime Video.
Regulatory Review: The company is currently undergoing regulatory review of its joint proxy registration statement with the SEC, which has delayed the expected separation timeline to mid to late April 2025.
Competitive Pressures: The television market is experiencing pressure due to market corrections, which has led to a need for Lionsgate to diversify its buyer mix and cut costs.
Supply Chain Challenges: The company has faced setbacks in production due to the recent LA wildfires, impacting employees and business partners.
Debt Levels: Lionsgate's consolidated net debt stands at $2.4 billion, with studio leverage at 6.5 times and Starz leverage at 3.3 times, indicating elevated debt levels that may pose financial risks.
Subscriber Growth: Starz has seen a return to domestic OTT subscriber growth, but the linear subscriber base continues to decline, indicating a shift in revenue dynamics.
Market Conditions: The overall content production and delivery market is still recovering from previous strikes and disruptions, affecting the pace of new releases.
Cost Management: The company is focusing on cost controls and smarter production strategies to mitigate rising talent costs and production expenses.
Economic Factors: The company is navigating a challenging economic environment, which has impacted its business models and necessitated adjustments in strategy.
Motion Picture Group Performance: The motion picture business is back on track with three mid-budget films achieving significant profitability. Plans for Den of Thieves three have been announced.
Television Business Strategy: The television business is diversifying its buyer mix and cutting costs while producing 16 scripted and 36 unscripted series.
Starz Subscriber Growth: Starz returned to domestic OTT subscriber growth, adding 170,000 subscribers in the quarter.
Library Revenue: The library generated a record $954 million in trailing twelve-month revenue, up 22% year-over-year.
New Talent and Projects: New projects include films from Margot Robbie and Luca Guadagnino, and a video game based on John Wick.
Ancillary Opportunities: The company is expanding into experiences like the John Wick experience in Las Vegas and stage plays.
Amazon Prime Deal: An exclusive pay deal with Amazon Prime Video was announced, enhancing revenue from the pay television window.
Fiscal 2025 Outlook for Lionsgate Studios: Expected adjusted OIBDA between $300 million to $320 million.
Fiscal 2025 Outlook for Starz: Expected adjusted OIBDA of approximately $200 million.
Fourth Quarter Expectations: A strong fourth quarter is anticipated, driven by film and TV performance.
Leverage Projections: Studio leverage expected to be around 5.5 times at separation, with Starz at about 3 times.
Subscriber Growth Projections: Continued growth in OTT subscribers is expected, with a strong content slate.
Shareholder Return Plan: Lionsgate announced a new exclusive pay deal with Amazon Prime Video for their film slate, which will significantly increase the contribution from their pay television window. This deal includes four films from the 2025 slate and the full lineup for 2026 through 2028.
Shareholder Return Plan: The company is preparing for a separation, with bank commitments for an $800 million asset-backed revolver at the studio and a $300 million Term Loan A at Starz, aimed at funding upon separation and extinguishing remaining bank debt.
Shareholder Return Plan: Lionsgate's CFO indicated that they expect to achieve a leverage ratio of approximately 5.5 times at the time of separation, with a continued focus on deleveraging in fiscal 2026.
The earnings call summary indicates strong financial performance, optimistic guidance, and high engagement in key projects like 'Resurrection' and 'Michael.' The management's strategic focus on mid and small-budget films, along with strong library performance and efficient marketing, suggests positive market sentiment. Although there is some uncertainty in M&A and lack of specific financial guidance, the overall tone is positive, supported by strong backlog and international demand.
The earnings call highlighted strong financial performance with significant revenue and profit growth in Q4 2025, alongside a record library revenue. Positive developments include a new Amazon Prime deal and strategic initiatives like expanding into new experiences. However, the lack of a share repurchase program and competitive pressures were noted. The Q&A revealed cautious optimism about future growth and strategic partnerships, boosting sentiment. Overall, despite some concerns about economic factors and debt, the strong quarterly results and strategic moves suggest a positive stock price movement.
The earnings call presents a mixed but generally positive outlook. Financial performance shows revenue growth and improved adjusted earnings, despite a loss in EPS. The Amazon deal promises future revenue boosts, and the separation plan indicates a strategic focus on deleveraging. The Q&A highlights optimism about future profits, though management was vague about specifics. Overall, the financial improvements and strategic partnerships suggest a positive short-term stock price movement.
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