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What factors drove the changes in Lionsgate Studios's revenue and profit?

- **Record Library Growth**: Q3 library revenue hits $1.05B (10% YoY), driven by TV series and film slate success.
- **Film Success**: Motion Picture revenue up 35% YoY, with The Housemaid and Now You See Me grossing $250M+ globally.
- **TV Expansion**: 12/13 series renewed, doubling FY27 scripted deliveries with cost-efficient models.
- **Strategic Initiatives**: Single share class conversion, AI integration, and FY27 tentpole-heavy slate.
- **Financial Outlook**: Q4 OIBDA to improve on carryover; FY27 OIBDA growth expected with $1.5B backlog visibility.

**【CEO Summary Section】**
- **Q3 Highlights**: Revenue up 1% YoY to $724M, driven by Motion Picture success (35% YoY growth) and record library revenue ($1.05B trailing 12M). The Housemaid box office success and sequels in production.
- **Franchise Expansion**: 40+ active franchises, including new productions like John Rambo, Dirty Dancing, and Michael (April 2026 release). Library revenue from TV series doubled over 10 years.
- **TV Momentum**: 12/13 scripted series renewed, including The Studio (Apple), The Rainmaker (USA Network), and Robinhood (MGM+). Fiscal '27 scripted deliveries to double.
- **Strategic Moves**: Converted dual share to single class, lapsing shareholder rights plan. Focus on cost efficiency and agility in AI, M&A, and content distribution.

**【CFO Financial Commentary】**
- **Financials**: Adjusted OIBDA $85M, net loss $0.16. Motion Picture segment profit $59M (down YoY due to P&A spend). TV segment profit $56M (down YoY due to episodic timing). Backlog $1.5B (up 26% YoY).
- **Outlook**: Q4 OIBDA expected to improve on The Housemaid carryover. FY27 growth driven by tentpoles (Hunger Games, Resurrection of Christ) and doubled scripted deliveries.
- **Leverage**: Net debt $1.75B, leverage 7.4x. Anticipate deleveraging to mid-4x by mid-FY27 through organic cash flow growth.

**【Q&A Key Highlights】**
- **Industry Trends**: Buyers reopening commissions (e.g., USA Network for The Rainmaker), streamers investing in movies (e.g., Amazon pay-one deals). Library monetization via FAST, AVOD, and EST/VOD.
- **AI Strategy**: Appointment of Chief AI Officer to integrate AI in production, distribution, and content creation. Exploring partnerships with major AI companies.
- **M&A & Deleveraging**: No immediate M&A focus; prioritize organic growth. Deleveraging through FY27 OIBDA growth and cash flow from FY26 slate carryover.
- **Michael Film**: Trailer broke records, strong sentiment metrics. Expected IMAX and global theatrical dominance.
- **IP Extensions**: Hunger Games live shows, Now You See Me stage events, and video game adaptations (John Wick) in development.

Lionsgate Studios Corp. (LION) Q3 2026 Earnings Call Transcript

- **Record Library Growth**: Trailing 12-month library revenue hits $1 billion, up 13% YoY, driven by strong TV renewals and film slate visibility.
- **Blockbuster Pipeline**: Upcoming films (*Michael*, *Hunger Games*, *Resurrection*) generate unprecedented excitement, with *Michael* trailer views surpassing *John Wick 4*.
- **Financial Strength**: $1.6 billion backlog and plans to deleverage to 3-3.5x by 2028 through improved EBITDA and potential 3 Arts partnership.
- **AI-Driven Efficiency**: Leveraging AI for cost savings and creative expansion, while protecting IP from unauthorized use.

**【CEO Summary Section】**
- **Revenue and Library Growth**: Trailing 12-month library revenue reached $1 billion for the first time, up 13% year-over-year. Motion Picture segment profit rose significantly due to improved performance compared to last year's underperforming films.
- **Upcoming Releases**: Key films include *Michael* (April 2027), *Hunger Games: Sunrise on the Reaping* (November 2027), and *Resurrection Part 1* (March 2027). The *Michael* trailer generated 30 million views in the first 6 hours, surpassing *John Wick 4*.
- **Strategic Acquisitions**: Acquired future film and TV rights to the *Expendables* franchise and secured distribution rights for the next *Rambo* series. Expanded into sports talent management with the acquisition of A&A Management and hiring of Miles Garrett.
- **AI and Operational Efficiency**: Leveraging AI to enhance productivity and cost savings while protecting intellectual property from unauthorized use.

**【CFO Financial Commentary】**
- **Q2 2026 Financials**: Revenue of $475 million, adjusted OIBDA of $14 million, and a $1.6 billion backlog (up 31% sequentially). Motion Picture revenue was $276 million, driven by *Now You See Me: Now You Don't* and *The Housemaid*, while TV revenue was $199 million, benefiting from renewals of *The Hunting Wives* and *The Rainmaker*.
- **Leverage and Cash Flow**: Net debt of $1.7 billion, with plans to deleverage to 3-3.5x by fiscal 2028 through improved EBITDA and potential 3 Arts partnership. Adjusted free cash flow used was $129 million, with $800 million undrawn revolver and $247 million cash on hand.

**【Q&A Key Highlights】**
- **Film Slate Confidence**: Strong social media traction for *Now You See Me: Now You Don't* and *The Housemaid*, with exhibition partners expressing optimism. *Michael* trailer views exceeded *John Wick 4*, and *Hunger Games* franchise demand is robust.
- **TV Growth**: TV segment profit expected to strengthen in Q3/Q4 due to renewals and international licensing expansions. Scripted series deliveries are set to double in fiscal 2027.
- **Ancillary Revenue**: Stage plays (*John Wick*, *La La Land*) and gaming partnerships (*John Wick*, *Saw*) are generating incremental revenue. The *Michael* musical biopic is projected to perform in line with top-tier musicals.
- **M&A and 3 Arts**: Exploring partnerships to grow 3 Arts' sports and talent management business, with potential updates in Q1 2027. No immediate M&A plans but monitoring industry consolidation.

Lionsgate Studios Corp. (LION) Q2 2026 Earnings Call Transcript

- **Studio Recovery**: Motion Picture revenue up 3.2% YoY, library revenue +22% YoY to $954M. Mid-budget films like *Den of Thieves 2* drive profitability.
- **TV Growth**: 63% YoY revenue growth to $405M, with *Ghost* and *The Rookie* leading scripted series.
- **Starz Momentum**: Sequential OTT subs up 170K; Amazon film deal secures early windows for 2025-2028 slates.
- **Ancillary Expansion**: *John Wick* video game and stage plays poised to add $100M+ to EBITDA.
- **Financial Health**: Studio OIBDA guidance $300-320M; Starz leverage 3.3x post-separation. Amazon deal to boost pay TV margins significantly.

**【CEO Summary Section】**
- Motion Picture Group revenue grew 3.2% YoY to $714 million, driven by mid-budget films like *Den of Thieves 2* and *Flight Risk*. Trailing 12-month library revenue reached $954 million, up 22% YoY.
- Television business delivered 63% YoY revenue growth to $405 million, with key series like *Ghost* (CBS) and *The Rookie* (ABC) performing strongly. 16 scripted, 36 unscripted series, and 9 films were in production.
- Starz saw sequential OTT subscriber growth of 170,000 to 12.6 million, with renewed focus on bundling deals (e.g., Amazon Prime, Vizio). New Amazon film output deal secures early window for 2025-2028 slates.
- Ancillary opportunities like the *John Wick* AAA video game and stage plays (*Hunger Games*, *Dirty Dancing*) are expected to contribute meaningfully to EBITDA.

**【CFO Financial Commentary】**
- Q3 2025 consolidated revenue: $971 million; Adjusted OIBDA: $144 million; Free cash flow: $13 million.
- Studio segment profit up 45% YoY to $112 million, driven by library growth and cost controls. Starz North American OIBDA: $200 million, with 3.3x leverage post-separation.
- Fiscal 2025 guidance: Studio OIBDA $300-320 million; Starz North America OIBDA $200 million. Studio net debt: $1.8 billion; Starz net debt: $568 million.

**【Q&A Highlights】**
- **Separation Timeline**: Regulatory review delays push shareholder meeting to mid-April, with separation shortly after. Studio and Starz capital structures set with $800M ABL and $300M Term Loan A, respectively.
- **Amazon Deal Impact**: 4 films from 2025 slate and full 2026-2028 slates go to Amazon, with earlier windows boosting pay TV contribution.
- **Cost Control**: 5% YoY decline in operating expenses; focus on location-based productions (e.g., New Jersey tax incentives).
- **Borderlands Post-Mortem**: Greenlighting process refined to better match talent, budget, and risk-reward profiles.
- **Starz Growth**: OTT subscriber growth to continue via bundling (e.g., YouTube TV, Prime Video) and premium content like *Outlander* Season 7.


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