Lionsgate Studios (LION) Q1 2025 earnings summary

Executive summary

• Delivered a solid quarter despite industry disruption, with strong Motion Picture Group and library performance, and Starz achieving domestic OTT revenue and subscriber growth year-over-year.

• Progressed on the separation of studio and Starz businesses, including $300M equity financing, bond exchange, and a $340M IP-backed facility, with the process on track for year-end pending regulatory approvals.

• Board approved collapsing dual-class share structure into a single class with a 12% exchange premium for A shareholders, a key milestone for separation.

• Focused on cost reduction, content creation, and new business models, including FAST channels and bundling partnerships.

• Motion Picture and North American Media Networks segment profits increased year-over-year by 24% and 54%, respectively, despite lingering strike effects.

Financial highlights

• Q1 consolidated revenue was $835M, down 8% year-over-year; adjusted OIBDA was $105M, up 22% year-over-year.

• Operating income was $19M; reported EPS was a loss of $0.25, adjusted EPS was $0.09.

• Net cash used in operating activities was $159M; adjusted free cash flow use was $89M.

• Studio revenue declined 6% to $588M; studio adjusted OIBDA declined 6% to $58M.

• Media Networks revenue was $350M; North American segment profit was $59M, up 54% year-over-year.

Outlook and guidance

• Reiterated fiscal 2025 adjusted OIBDA outlook: $430M for Studio, $200M+ for Starz North America.

• Expect second half of fiscal 2025 to be stronger, driven by increased TV deliveries, post-theatrical cash flows, Starz price increase, and OTT subscriber growth.

• Q2 expected to see higher P&A and content amortization, with leverage rising before returning to ~3x by year-end.