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    LION
    Earnings call· Jun 2026(Q1 FY27)

    Lionsgate Studios Q1 FY27 earnings call LION

    Aug 6, 2026 Source

    Executive summary

    Lionsgate Q1 FY27 — Strong Film Performance and Accelerated Deleveraging

    Lionsgate Studios delivered a strong Q1 FY27, driven by exceptional film performance and strategic library monetization. The company's pure-play content strategy and franchise-driven IP portfolio are strengthening its balance sheet and increasing strategic optionality in a consolidating media landscape. Management expressed confidence in continued growth and accelerated deleveraging, despite a temporary dip in television segment performance.

    Highlights

    5

    • Lionsgate Studios revenue grew 48% year-over-year to $777 million.

    • Motion Picture Group reported its best first quarter results ever, with revenue more than doubling to $587 million and segment profit reaching $105 million.

    • Adjusted OIBDA improved to $79 million.

    • Free cash flow was $129 million in the period.

    • Net debt improved by $121 million sequentially, with leverage reaching 4.3x, ahead of target.

    Concerns

    1

    • Television revenue was $189 million and segment profit was $10 million, down versus the prior year due to the timing of episodic deliveries.

    Guidance & targets

    7
    CategoryTargetConfidence
    Adjusted OIBDA and Free Cash Flow
    Significant growth
    high materiality
    High
    TV segment profit
    Improve sequentially in the second quarter and then accelerate in the back half of the year
    medium materiality
    High
    Leverage ratio
    Low to mid-4x
    high materiality
    High
    Leverage ratio
    3x to 3.5x
    high materiality
    High
    Leverage ratio
    Below 3x
    high materiality
    High
    Backlog
    Translate into growth in upcoming library quarters
    medium materiality
    High
    Television segment year-over-year growth
    Significant year-over-year growth
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Lionsgate Studios (Consolidated)
    Revenue grew 48% year-over-year. Studio segment profit increased significantly year-over-year, generally comparable to studio adjusted OIBDA figures reported by peers.
    Adjusted OIBDA: $79 millionOperating income: $26 millionDiluted loss per share: $0.10Diluted adjusted earnings per share: $0.06Free cash flow: $129 millionStudio segment profit: $115 million
    		$777 million48%——
    Motion Picture
    Achieved highest first quarter Motion Picture segment profit in the company's history, driven by exceptional performance of 'Michael' and continued strength in ancillary contributions from 'The Housemaid'.
    Domestic box office market share: over 10% (first half of calendar year)
    		$587 millionmore than double—$105 million
    Television
    Revenue and segment profit were expectedly down versus the prior year due to the timing of episodic deliveries. Management expects sequential improvement in Q2 and acceleration in H2 FY27.
    		$189 million——$10 million

    Operational metrics

    8
    Trailing 12-month library revenue
    $987 millionroughly in line with prior year
    TTM

    Demonstrates the enduring value of intellectual property and provides a source of recurring revenue.

    Film and television backlog
    $1.5 billionup 21% year-over-year
    Q1 FY27

    Expected to translate into growth in upcoming library quarters.

    Net debt
    $1.5 billion$121 million sequential improvement
    Q1 FY27

    Primary driver was better-than-expected free cash flow performance.

    Leverage ratio
    4.3xdown nearly 2 turns since the end of March
    Q1 FY27

    Reached mid-4x leverage target earlier than anticipated.

    Unrestricted cash
    $426 million
    Q1 FY27

    Balance sheet position at quarter end.

    Available capacity on revolver
    $800 million
    Q1 FY27

    Capital structure remains well positioned with no significant near-term corporate debt maturities.

    Current scripted series renewals
    13 for 13
    Q1 FY27

    Reflects the company's diversified television strategy across a wide range of platforms.

    AI employee adoption
    95%
    Current

    Every employee is trained in AI and using it, contributing to efficiency and potential revenue enhancement.

    Product announcements

    13
    ProductTypeDetails
    Michaellaunch
    The Housemaidlaunch
    The Hunger Games: Sunrise on the Reapingmilestone
    The Resurrection of the Christroadmap
    John Rambomilestone
    Cainemilestone
    The Housemaid's Secretroadmap
    The Blair Witchroadmap
    Narutoroadmap
    DINKSlaunch
    Traumalaunch
    Power: Originslaunch
    Power: Legacylaunch

    Deals & partnerships

    6
    NetflixLicensing deal for 'Power' series3 years

    Licensed the first 4 Power series (all 4 internationally and the original Power worldwide) for the next 3 years, beginning in November.

    Publicis GroupeInnovative partnership for TV series 'DINKS'

    Partnership for Amazon's pickup of Marta Kauffman's improvisational comedy 'DINKS'.

    Amazon Prime VideoStreaming distribution for 'Trauma' and 'DINKS'

    Picked up 'DINKS' and will stream 'Trauma' in the U.K.

    Paramount+Streaming distribution for 'Trauma'

    Will stream 'Trauma' in the U.S. and the rest of the world.

    UniversalCo-financing and distribution for 'Michael'

    Partnership for global distribution of 'Michael' (save for Kino in Japan).

    Blumhouse and James Wan's Atomic MonsterPartnership for 'The Blair Witch' film

    Collaboration on a new chapter of 'The Blair Witch'.

    Risks & headwinds

    3
    Television segment revenue and profit declineQ1 FY27

    Revenue $189 million, Segment Profit $10 million

    Mitigation: Expected to improve sequentially in Q2 and accelerate in H2 FY27 due to increased episodic deliveries and the Netflix Power licensing deal.

    Uncertainty and delay in media M&A (Paramount/Warner Bros. deal)Ongoing

    Unquantified

    Mitigation: Management believes a better-financed, competitive streamer would be positive for Lionsgate, leading to more original programming and library sales. Expressed favor for certainty in the market.

    3 Arts put optionQ4 FY27

    Potential 0.5 turn increase in leverage

    Mitigation: Management expects to quickly delever after this potential event, moving to 3-3.5x leverage in FY28 and below 3x thereafter.

    What to watch in Q2 FY27

    5

    TV segment profit trajectory

    Q2 FY27
    Current$10 million (Q1 FY27), down YoY
    TargetSequential improvement

    Why it matters

    Indicates recovery and growth in the Television segment, which was down this quarter due to timing of📎 episodic deliveries.

    We expect TV segment profit to improve sequentially in the second quarter and then accelerate in the back half of the year.

    Q&A highlights

    8

    What influences the success of IP, and what gives Lionsgate confidence in its film slate, especially with sequels/revivals?

    Adam Fogelson explained that Lionsgate focuses on answering audience demand for specific characters or storylines, maintaining robust communication with fan bases, and making films for the right budget with the right filmmakers. He stated that their slate meets these threshold criteria.

    “the lens that we're looking at with these projects is does the movie in question answer an audience demand or interest about a particular character or a particular storyline or when we invite the audience to think about an idea that they may never have considered, do they get excited.”

    asked by Vikram Kesavabhotla · answered by Adam Fogelson

    2 min read5 chapters

    Detailed Narrative

    01

    Film Business Momentum and Strategic IP

    Lionsgate's film business demonstrated strong momentum, launching two new marquee branded properties, 'Michael' and 'The Housemaid,' which contributed to over 10% domestic box office market share in the first half of the calendar year. This performance is attracting new creative projects and expanding filmmaker relationships, reinforcing the Lionsgate brand. The company is building a slate of over a dozen branded repeatable properties for the next three years, including 'The Hunger Games: Sunrise on the Reaping,' 'John Rambo,' and 'Naruto,' with several already in production or post-production.

    02

    Television Strategy and Diversification

    The television landscape has shifted, with Lionsgate adapting its strategy to a fragmented ecosystem by diversifying across many new buyers. The company is on track for 13 out of 13 current scripted series renewals spread across 12 different buyers, showcasing its creative strengths, pricing flexibility, and innovative business models. Recent pickups like 'DINKS' (with Amazon and Publicis Groupe) and 'Trauma' (with Prime Video and Paramount+) exemplify this approach, moving beyond traditional sales channels.

    03

    Library Monetization and Key Licensing Deals

    Library monetization remains a significant competitive advantage for Lionsgate, with trailing 12-month revenue at $987 million. The company's film and television backlog grew to $1.5 billion, up 21% year-over-year, expected to drive future growth. A strategic licensing deal for the 'Power' series with Netflix (covering four series internationally and the original worldwide for three years) highlights the increasing value of Lionsgate's content and the strong demand from streamers for high-profile franchises.

    04

    Balance Sheet Strengthening and Deleveraging Ahead of Schedule

    Lionsgate significantly strengthened its balance sheet, reducing net debt by $121 million sequentially to $1.5 billion. This resulted in leverage improving to 4.3x, nearly two turns down since March and reaching the mid-4x target earlier than anticipated. Management expressed confidence in continued deleveraging, targeting 3-3.5x leverage in fiscal 2028 and below 3x thereafter, supported by strong operating performance and free cash flow generation.

    05

    AI Integration and Efficiency Gains

    Lionsgate views AI as a substantial opportunity to enhance revenue and reduce costs across content production and day-to-day operations. The company is actively experimenting with AI in pre-production, post-production, and creating new content formats, such as video versions of podcasts. With 95% employee adoption and ongoing training, AI is already contributing to increased efficiency and cost savings, with further potential expected.

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