Lionsgate Studios (LION) Q2 2025 earnings summary

Executive summary

• Financial results were impacted by industry disruption, lingering strike effects, and a weak theatrical box office, notably the underperformance of Borderlands and other releases.

• Revenue for the quarter was $948.6 million, with a net loss attributable to shareholders of $163.3 million, or $0.68 per diluted share; adjusted net loss was $102.5 million, or $0.43 per share.

• The business model remains resilient, supported by risk-mitigated slates, efficient spending, a diversified asset portfolio, and a strong library generating nearly $900 million in trailing 12-month revenue.

• STARZ is positioned for $200 million segment profit in FY25, with successful programming and a return to OTT subscriber growth expected in the second half; preparations for the separation of Studio and STARZ businesses are ongoing.

• Approximately 8% of eligible U.S. employees opted for voluntary severance or early retirement post-quarter as part of ongoing cost-saving initiatives.

Financial highlights

• Q2 consolidated revenue was $949 million; adjusted OIBDA loss of $18 million; operating income loss of $89 million.

• Net loss attributable to shareholders was $163.3 million; adjusted net loss was $102.5 million; fully diluted EPS was a loss of $0.68; adjusted EPS loss of $0.43.

• Net cash used in operating activities was $82 million; adjusted free cash flow use was $132 million.

• Studio revenue grew 4.3% year over year to $824 million; trailing 12-month library revenue reached $892 million, up 3%.

• Motion Picture revenue rose 2.8% year over year to $407 million; segment profit was $2.6 million, impacted by Borderlands and higher P&A spend.

• Television revenue increased 5.8% year over year to $417 million; segment profit was $24 million, impacted by lingering strike effects.

• Media networks revenue was $347 million; segment profit $27 million; North American OTT subs at STARZ were 12.4 million, down 2.6% year over year.

Outlook and guidance

• Lionsgate Studios fiscal 2025 adjusted OIBDA forecast revised to $300–$320 million due to film underperformance and TV recovery pace.

• STARZ North America expected to generate $200 million+ adjusted OIBDA in FY25, with OTT revenue projected to reach 70% of total by year-end.

• Second-half weighted results anticipated, driven by increased TV deliveries, post-theatrical cash flows, STARZ price increase, and OTT subscriber growth.

• The company remains on track to complete the separation of Studio and STARZ businesses by year-end, pending regulatory approvals.

• Management anticipates a return to sequential OTT subscriber growth in North America in the December quarter.