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    LION
    Earnings call· Mar 2026(Q4 FY26)

    Lionsgate Studios Q4 FY26 earnings call LION

    May 21, 2026 Source

    Executive summary

    Lionsgate Studios Q4 FY26 — Strong Film Performance Drives Growth and Deleveraging

    Lionsgate Studios concluded fiscal 2026 with robust Q4 results, primarily driven by exceptional film performance and resilient library revenue, despite a year-over-year decline in total revenue. The company is strategically positioned for significant growth in fiscal 2027, underpinned by a strong content pipeline, anticipated increase in TV episodic deliveries, and a clear path to natural deleveraging. Management highlighted the increasing value of repeatable intellectual properties and the strategic integration of AI across operations.

    Highlights

    5

    • Adjusted OIBDA reached a 12-year high of $165 million, up 17% year-over-year.

    • Operating income of $118 million, up over 50% compared to last year.

    • Free cash flow for the quarter was a strong positive $190 million.

    • Motion Picture revenue increased 23% year-over-year to $652 million, with segment profit growing 39% to $187 million.

    • Secured renewals for 12 of 13 scripted series, setting the stage for TV episodic deliveries to nearly double in fiscal 2027.

    Concerns

    3

    • Lionsgate Studios revenue was down year-over-year to $907 million.

    • Television revenue was $255 million and segment profit was $31 million, reflecting lower volume of scripted deliveries versus the prior year.

    • Year-end leverage improved to 6.1x, still a high ratio despite significant improvement.

    Guidance & targets

    8
    CategoryTargetConfidence
    Adjusted OIBDA growth
    significant growth
    high materiality
    High
    Free cash flow growth
    substantial growth
    high materiality
    High
    Deleveraging
    continuation of significant deleveraging
    high materiality
    High
    TV episodic scripted deliveries
    double the number of episodic scripted deliveries
    medium materiality
    High
    Backlog conversion
    90% of backlog will come within the next 24 months
    medium materiality
    High
    Michael worldwide box office
    over $1 billion
    high materiality
    High
    The Housemaid Secret release
    December 17, 2027 release
    medium materiality
    High
    Leverage ratio
    4x, 4.5x
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Studio Segment (Motion Picture and Television)
    Studio segment profit, which reflects Motion Picture and Television segment profits before corporate overhead, increased 24% year-over-year to $218 million. This increase was driven primarily by strong Motion Picture performance and is comparable to peer adjusted OIBDA figures.
    Profit growth YoY: 24%
    		———$218 million
    Motion Picture
    Revenue increased 23% year-over-year to $652 million, while segment profit grew 39% to $187 million. This was driven by the outstanding performance of 'The Housemaid' and continued carryover from 'Now You See Me: Now You Don't'. Results were strong despite incremental pre-release P&A spend for 'Michael', 'Hunger Games', and 'John Rambo'.
    Segment profit growth YoY: 39%The Housemaid PVOD performance: highest grossing among films with up to $150 million domestic box office
    		$652 million23%—$187 million
    Television
    Revenue was $255 million and segment profit was $31 million. Year-over-year comparisons reflect the timing of episodic deliveries and lower volume of scripted deliveries versus the prior year. Segment profit remained resilient, benefiting from continued strength in library performance, including 'The Rookie' and 'Mad Men'.
    		$255 million——$31 million

    Operational metrics

    12
    Adjusted OIBDA
    $165 millionup 17% year-over-year
    Q4 FY26

    Adjusted OIBDA reached a 12-year high, indicating strong operating performance.

    Operating income
    $118 millionup over 50% compared to last year
    Q4 FY26

    Operating income showed significant year-over-year growth.

    Diluted earnings per share
    $0.23
    Q4 FY26

    Reported diluted EPS for the quarter.

    Diluted adjusted earnings per share
    $0.37
    Q4 FY26

    Diluted adjusted EPS for the quarter.

    Trailing 12-month library revenue
    above $1 billiongrowing 5% year-over-year
    TTM Q4 FY26

    Demonstrates durability and growing value of content portfolio.

    Net debt
    $1.6 billionimproved by nearly $150 million relative to prior quarter
    FY26 year-end

    Improvement driven by strong free cash flow.

    Net Debt / Adjusted OIBDA leverage ratio
    6.1ximproved well over a full turn
    FY26 year-end

    Reflects higher trailing 12 months adjusted OIBDA and strength in free cash flow.

    Unused revolver capacity
    $800 million
    Q4 FY26

    Available capacity on the company's revolver.

    Unrestricted cash
    $341 million
    Q4 FY26

    Cash balance on the balance sheet at quarter end.

    Backlog (contractual future revenues and cash flows)
    $1.3 billion
    Q4 FY26

    Provides strong visibility for future periods.

    AI deployment across workforce
    over 80%
    current

    Utilized for productivity, advanced analytics, pre-production, and post-production.

    Michael 2 footage already shot
    25% to 30%
    future production

    Footage from prior production activity will materially benefit the sequel.

    Industry KPIs

    1
    MetricValueDetails
    Content spend title performance—

    Product announcements

    7
    ProductTypeDetails
    The Housemaid Secretlaunch
    Rambo (new interpretation)milestone
    Resurrection of the Christ Parts 1 and 2milestone
    Blair Witch (reimagining)launch
    Magic (remake)launch
    The Rookie: Northlaunch
    Day Drinkerlaunch

    Deals & partnerships

    2
    Blumhouse and James Wan's Atomic MonsterPartnership for the reimagining of 'Blair Witch'.

    Collaboration to greenlight and produce a new version of the 'Blair Witch' franchise.

    UniversalInternational distribution partner for the film 'Michael'.

    Universal is a partner on the international side for the 'Michael' film, excluding Japan where Lionsgate handles presales.

    Risks & headwinds

    2
    Television segment performance impacted by delivery timing and volumeQ4 FY26

    Television revenue was $255 million and segment profit was $31 million, reflecting lower volume of scripted deliveries versus the prior year.

    Mitigation: Expect to double the number of episodic scripted deliveries in fiscal 2027, with 90% falling in Q2, Q3, and Q4.

    Incremental pre-release P&A spend impacting Motion Picture profitabilityQ4 FY26

    Incremental pre-release P&A spend for Michael as well as early P&A spend for Hunger Games, Sunrise on Reaping and John Rambo.

    Mitigation: Offset by outstanding performance of 'The Housemaid' and strong carryover from 'Now You See Me: Now You Don't', leading to 39% segment profit growth.

    What to watch in Q1 FY27

    5

    Adjusted OIBDA growth

    FY27
    Currentsignificant growth expected
    Targetsignificant growth

    Why it matters

    Management expects significant adjusted OIBDA growth in FY27, which is a key driver for deleveraging and overall financial health.

    We now have enhanced visibility and continue to expect significant adjusted OIBDA growth in fiscal 2027.

    Q&A highlights

    6

    What are the drivers behind the recent box office improvement, is it sustainable, and what is the expected profit cadence for fiscal '27?

    Management attributes box office growth to Gen Z audiences and enhanced large-screen formats, noting studios have learned to market effectively in a fragmented world. For FY27, the profit cadence is expected to be less back-end loaded than FY26, with TV being more back-end loaded due to normal episodic delivery cycles (90% of episodes in Q2-Q4).

    “the growth in the exhibition business, the moviegoing business is actually being driven by Gen Z, who are up to about a 30%, 34%, I think, share of that market.”

    asked by Vikram Kesavabhotla · answered by Jon Feltheimer

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Separation & Content Pipeline

    Lionsgate Studios successfully completed its separation from Starz, establishing itself as a focused content-driven public company. This strategic move has been validated by market response, with the company now boasting one of its strongest content pipelines ever. Over the next 2-3 years, more than half of its film, television, and live entertainment slates will consist of branded, repeatable intellectual properties that are owned or controlled, ensuring a consistent flow of valuable content.

    02

    Film Performance & Strategy

    The quarter highlighted exceptional film performance, notably with 'The Housemaid' and 'Michael.' 'The Housemaid' demonstrated a unique model with a risk-mitigated financial structure and high ancillary market conversion, becoming the industry's highest-grossing PVOD title for films under $150 million domestic box office. 'Michael' is on track to exceed $1 billion worldwide, showcasing the studio's ability to compete effectively. Upcoming titles include 'The Housemaid Secret,' 'Hunger Games' installment, 'Rambo,' 'Resurrection of the Christ,' and a 'Blair Witch' reimagining.

    03

    Television Business Resilience & Growth

    The television segment showed resilience, securing renewals for 12 out of 13 scripted series, including 'The Rookie' for its ninth season and the new spin-off 'The Rookie: North.' The hit comedy 'The Studio' on Apple TV continued its dominant award run. Management expects TV's growth to accelerate in fiscal 2027, with the number of episodic scripted deliveries projected to nearly double compared to fiscal 2026, driven by these renewals and new productions.

    04

    AI Integration & Fan Engagement

    Lionsgate Studios is actively leaning into AI, viewing it as a net positive for the business. The technology is being deployed across over 80% of the workforce for productivity and advanced analytics, and is also enhancing pre-production and post-production processes. The company plans to launch a new fan and creator site, providing digital toolkits to empower fans to interact with and extend its brands, fostering engagement and building new versions of its intellectual properties.

    05

    Balance Sheet Strengthening & Deleveraging

    The company reached a post-spin inflection point for its balance sheet, with net debt improving by nearly $150 million quarter-over-quarter to approximately $1.6 billion. Year-end leverage improved significantly to 6.1x. Management anticipates substantial adjusted OIBDA growth and strong positive free cash flow in fiscal 2027, which are expected to drive natural deleveraging, targeting a leverage ratio of 4x-4.5x by the fourth quarter of fiscal 2027.

    AI-generated summary of the company’s earnings call. Not investment advice.