Lionsgate Studios (LION) Q1 2025 earnings summary

Executive summary

• Consolidated revenue was $834.7M, down 8% year over year; adjusted OIBDA was $104.5M, up from $85.7M, and adjusted net income was $20.9M.

• Motion Picture and North American Media Networks segment profit increased 24% and 54%, respectively, while strike effects weighed on Television Production.

• Progressed toward separating Studio and Starz by year-end, subject to regulatory approvals; the board approved collapsing the dual-class share structure into one class, with a 12% exchange premium for A shares, pending shareholder approval.

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

Financial highlights

• Consolidated operating income was $18.8M, versus a prior-year loss of $16.8M; net loss attributable to shareholders was $59.4M, or $0.25 per diluted share, while adjusted diluted EPS was $0.09.

• Adjusted free cash flow was negative $88.9M; net cash used in operating activities was $158.9M, with $9M in capital expenditures.

• Studio standalone revenue was $588.4M, down 5.9% year over year; net loss widened to $44.4M from $21.4M, and diluted loss per share was $0.16 versus $0.08.

• Studio standalone operating income fell 57.8% to $15.6M; interest expense rose 17.4% to $58.6M, and restructuring and other costs increased to $27.7M from $4.1M.

• Studio standalone cash and equivalents were $167.2M at June 30, 2024, down from $277.0M at March 31; operating cash flow used $117.6M versus $37.7M provided a year earlier.

Outlook and guidance

• Reiterated FY25 adjusted OIBDA outlook of $430M for Studio and $200M+ for Starz North America; the second half is expected to be stronger, with increased TV deliveries, post-theatrical cash flows, a Starz price increase and OTT subscriber growth.

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

• FY25 production cash requirements are expected to rise and marketing spend to fall versus FY24; liquidity is expected to cover known operating and debt-service needs for the next 12 months and beyond.

• Remaining performance obligations were $1.804B at June 30, 2024, including $1.014B expected to be recognized during the rest of FY25.