Lions Gate Entertainment Corporation (NYSE: LION) Q4 2025 Earnings Call | 05/23/2025

Lions Gate Entertainment Corporation Q4 2025 earnings call held on May 23, 2025.

Key Highlights

• Completion of Separation: Lionsgate and STARZ successfully separated and began trading on the New York Stock Exchange (NYSE) under the ticker symbol LION on May 7th. The company believes this separation will unlock significant value for shareholders and business partners.
• Strong Financial Quarter: The Motion Picture Group drove a strong financial quarter with profitable mid-budget successes, robust library sales, and disciplined P&A spending.
• TV Group Successes: The Television Group launched the critically acclaimed comedy The Studio on Apple TV+ and secured renewals for key series like Ghosts, The Rookie, and Yellow Jackets.
• Record Library Performance: The library achieved a record performance with trailing 12-month revenue of $956 million, driven by organic distribution, library acquisitions, and new FAST and AVOD channels.
• Focus on Key Franchises: The Motion Picture Group unveiled a strong slate of films, emphasizing established franchises (Hunger Games, John Wick, Now You See Me) and repeat talent relationships.
• Expansion in Television: The Television Group is adding premium properties like Spartacus: House of Asher, The Rainmaker, and a new Robin Hood series.
• 3Arts Growth: Continued leadership in broadcast network comedies and expanded into streaming comedies with renewals for series on Netflix.
• Creator Economy Initiative: Launched a major initiative to create original content for digital platforms and build digital businesses for their talent.

Financial Results

• Q4 2025:
  • Revenue: Up 22% year-over-year to $1.1 billion.
  • Adjusted OIBDA: Up 49% to $138 million (10-year high).
  • Operating Income: Up significantly to $94 million.
  • Reported Fully Diluted Earnings Per Share: $0.10.
  • Fully Diluted Adjusted Earnings Per Share: $0.21.
  • Net Cash Flow from Operating Activities: $256 million.
  • Adjusted Free Cash Flow: Positive $395 million.
  • Library Revenue: Record $340 million.
• Fiscal Year 2025:
  • Revenue: Up 7% year-over-year to $3.2 billion.
  • Adjusted OIBDA: Down 8% to $302 million.
  • Operating Income: Down 11% to $125 million.
  • Reported Fully Diluted Earnings Per Share: Loss of $0.43.
  • Fully Diluted Adjusted Earnings Per Share: Positive $0.10.
  • Net Cash Flow Used in Operating Activities: $107 million.
  • Adjusted Free Cash Flow: Positive $89 million.
  • Trailing 12-Month Library Revenue: Record $956 million, up 8% year-over-year.

Business Segment Performance (Q4 2025)

• Motion Picture:
  • Revenue: Up 28% year-over-year to $526 million.
  • Segment Profit: $135 million, up 65% year-over-year.
  • Driven by successful theatrical releases (Den of Thieves II, Flight Risk), strong performances from direct-to-platform releases, and robust library demand.
• Television:
  • Revenue: Up 16% year-over-year to $543 million.
  • Segment Profit: Down 23% year-over-year to $41 million (faced a tough comparison with the prior year's quarter).
  • Revenue strength driven by continued growth and episodic deliveries.

Balance Sheet

• Net Debt (Studio): $1.5 billion at the end of the quarter, down from $1.8 billion in Q3.
• Trailing 12-Month Studio Leverage: Declined to 4.9 times.
• Post-Separation: Term Loan A was paid off, $390 million of 2030 unsecured bonds were assumed, and a new $800 million revolver was established. Net debt at separation was just under $1.6 billion.

Outlook

• A strong film and TV slate in fiscal 26 is expected to replenish the pipeline and provide the financial underpinning for a strong fiscal 27.
• The company anticipates solid two-year Adjusted OIBDA growth from fiscal 25 through fiscal 27.
• Free cash flow is expected to be positive over the next two years, with a back-end-loaded cadence.
• Long-term leverage target is 3 to 3.5 times.
• The company is focused on realizing the value of its assets and driving shareholder value following the separation.