Sign in

You're signed outSign in or to get full access.

LG

LIONS GATE ENTERTAINMENT CORP /CN/ (LGF-A)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 FY25 consolidated revenue was $834.7M with operating income of $18.8M; adjusted diluted EPS was $0.09 and Adjusted OIBDA was $104.5M, while reported diluted EPS was $(0.25) .
  • Studio performance was mixed: Motion Picture segment profit rose 24% YoY on efficient P&A and robust home entertainment, while Television Production profit fell on timing of deliveries in a “heavily backloaded” year; Media Networks North American segment profit rose 54% YoY on lower content amortization .
  • STARZ enacted a $1 U.S. monthly price increase (to $10.99) shortly after the quarter, supporting ARPU amid sequential subscriber softness (NA OTT down 180K; total NA subs down 500K); management reiterated plans to complete the full separation of Studio and STARZ by calendar year-end, pending regulatory timing .
  • Trailing 12‑month library revenue remained elevated at $882M (vs. $886M in Q4), underscoring resilient catalog demand that helped offset TV timing headwinds .

What Went Well and What Went Wrong

  • What Went Well

    • Motion Picture profit rose 24% YoY to $86.1M on “strong theatrical results from The Strangers: Chapter One,” robust home entertainment, and lower P&A/content amortization .
    • Media Networks (North America) segment profit increased 54% YoY to $58.5M, driven primarily by lower content amortization; a price increase was also implemented shortly after the quarter to bolster ARPU .
    • CEO emphasized continued progress toward full separation by calendar year-end and cited solid performance at Motion Picture, STARZ, and the library: “We’re pleased to report a solid quarter despite unprecedented industry disruption and the aftereffects of the strikes…taking a number of steps toward full separation by calendar year-end” .

  • What Went Wrong

    • Television Production profit decreased 53% YoY to $10.7M as deliveries were pushed into later quarters in a “heavily backloaded year,” with lingering strike impacts affecting timing .
    • Consolidated adjusted free cash flow was $(88.9)M, reflecting working capital and production timing, versus $34.8M in the prior-year quarter .
    • Sequentially, STARZ North America OTT subscribers fell by 180K and overall NA subs decreased by 500K, evidencing near-term pressure ahead of ARPU benefits from pricing .

Financial Results

Results vs prior two quarters (oldest → newest)

MetricQ3 FY2024Q4 FY2024Q1 FY2025
Revenue ($MM)$975.1 $1,117.7 $834.7
Reported Diluted EPS ($)$(0.45) $(0.22) $(0.25)
Adjusted Diluted EPS ($)$0.27 $0.27 $0.09
Operating Income (Loss) ($MM)$(43.5) $(60.9) $18.8
Adjusted OIBDA ($MM)$150.9 $140.3 $104.5
Adjusted Free Cash Flow ($MM)$63.9 $(2.7) $(88.9)

Year-over-year (Q1 FY2025 vs Q1 FY2024)

MetricQ1 FY2024Q1 FY2025
Revenue ($MM)$908.6 $834.7
Reported Diluted EPS ($)$(0.31) $(0.25)
Net Loss Attributable to Shareholders ($MM)$(70.7) $(59.4)
Operating Income (Loss) ($MM)$(16.8) $18.8
Adjusted Diluted EPS ($)$(0.04) $0.09
Adjusted OIBDA ($MM)$85.7 $104.5

Segment breakdown (Q1 FY2025 vs Q1 FY2024)

SegmentQ1 FY2024 Revenue ($MM)Q1 FY2025 Revenue ($MM)Q1 FY2024 Segment Profit ($MM)Q1 FY2025 Segment Profit ($MM)
Motion Picture$406.5 $347.3 $69.2 $86.1
Television Production$218.5 $241.1 $22.9 $10.7
Media Networks (Total)$381.1 $350.1 $31.9 $57.5
Intersegment Eliminations$(97.5) $(103.8) $(7.9) $(11.3)

Media Networks detail

Media NetworksQ1 FY2024 Revenue ($MM)Q1 FY2025 Revenue ($MM)Q1 FY2024 Segment Profit ($MM)Q1 FY2025 Segment Profit ($MM)
Starz Networks (U.S. & Canada)$341.6 $345.3 $38.1 $58.5
Other (International excl. exited)$39.5 $4.8 $(6.2) $(1.0)

KPIs and library

KPI3/31/20246/30/2024
Starz North America OTT subs (MM)13.38 13.20
Starz North America Linear subs (MM)8.42 8.10
Starz North America Total subs (MM)21.80 21.30
Global OTT (excl. exited territories) (MM)19.12 19.07
Global Linear (excl. exited territories) (MM)8.42 8.10
Global Total (excl. exited territories) (MM)27.54 27.17
STARZPLAY Arabia subs (MM)3.22 3.25
Trailing 12‑month Library Revenue ($MM)$886 (Q4) $882 (Q1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Separation of Studio and STARZTarget timing“By calendar year-end” (May 23, 2024) “By calendar year-end,” subject to regulatory timing (Aug 8, 2024) Maintained
STARZ U.S. monthly pricingEffective Sept 2024$9.99$10.99Raised
TV deliveries cadenceFY2025N/A“Heavily backloaded year” for Television (timing of deliveries) New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY2024, Q4 FY2024)Current Period (Q1 FY2025)Trend
Separation/SpinQ3: Plan to launch Lionsgate Studios as independent pure play . Q4: Full separation by CY year-end .Steps toward full separation by CY year-end reiterated .Progressing toward separation
STARZ pricing/ARPUQ3: NA OTT +700K seq; domestic rev up; LIONSGATE+ exit actions . Q4: Domestic revenue up seq third straight quarter .$1 U.S. monthly rate increase announced; NA OTT −180K seq; NA total −500K seq .Shift toward ARPU; subs mixed
Strikes/TV deliveriesQ3: Strikes impacted TV deliveries . Q4: Post-strike deliveries up .“Heavily backloaded” TV year with lingering strike effects .Back-end weighted FY25
Library monetizationQ3: TTM $784M . Q4: Record $339M quarter; TTM $886M .TTM $882M .Sustained elevated library rev
Motion Picture slateQ3: Hunger Games, Saw X drove results . Q4: MP FY profit highest in 10 years .The Strangers: Chapter One strong theatrical; robust HE; lower P&A/amortization .Execution on slate; efficiencies

Management Commentary

  • “We’re pleased to report a solid quarter despite unprecedented industry disruption and the aftereffects of the strikes. Our Motion Picture Group, STARZ and our library performed well, though financial results in our television segment reflected a heavily backloaded year. Importantly, we generated great momentum during and after the quarter by taking a number of steps toward full separation by calendar year-end, subject to the timing of normal regulatory approvals.” — Jon Feltheimer, CEO .
  • Media Networks North America: “Revenue grew 1%… and segment profit grew 54%… driven primarily by lower content amortization. North American OTT subscribers increased 5.5% YoY… Earlier this week, STARZ notified its U.S. customers of a $1.00 rate increase…” .
  • Motion Picture drivers: “strong theatrical results from The Strangers: Chapter One, robust home entertainment performances… and lower P&A spend and content amortization” .

Q&A Highlights

  • Themes emphasized on the call (seeking transcript reference): separation timing (calendar year-end goal), STARZ pricing/ARPU trajectory post $1 increase, and TV deliveries cadence/back-end weighting for FY25 .
  • Management reiterated that lingering strike impacts pushed TV deliveries later in the year and highlighted operational momentum toward separation while leveraging STARZ pricing to support profitability .
  • Note: Published transcript sources are third-party; company’s 8‑K/press release excerpts above anchor the commentary .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for Q1 FY2025 were unavailable due to missing CIQ mapping for LGF-A in the system at the time of query; as a result, we do not present beat/miss vs consensus this quarter. Values retrieved from S&P Global were unavailable due to mapping constraints.

Key Takeaways for Investors

  • Separation remains the core catalyst: management again guided to completing separation by calendar year-end, contingent on regulatory timing, which could unlock value between the Studio assets and STARZ .
  • Pricing power at STARZ: a $1 U.S. monthly increase (to $10.99) is in effect, supporting ARPU even as subs moderated sequentially; look for ARPU-driven margin support at Media Networks .
  • Film execution offsets TV timing: Motion Picture profit rose 24% YoY on disciplined P&A and robust home entertainment; continued mid-budget slate execution is a lever while TV deliveries are backloaded .
  • Library remains a shock absorber: TTM library revenue held near record territory at $882M, providing cash flow resilience amid episodic delivery timing variability .
  • Cash flow timing matters: Q1 adjusted FCF of $(88.9)M reflects production/working capital cadence; investors should expect back-half improvement as TV deliveries land and STARZ pricing flows through .
  • Media Networks mix shift: Despite sequential sub softness, North American segment profit rose 54% YoY on lower content amortization; pricing actions and content curation remain key .

Source Documents Reviewed

  • Q1 FY2025 8‑K earnings press release and detailed schedules (Aug 8, 2024) .
  • Prior quarters for trend: Q4 FY2024 8‑K (May 23, 2024) ; Q3 FY2024 8‑K (Feb 8, 2024) .
  • Earnings call transcript references (third-party): Seeking Alpha and Yahoo Finance transcript pages .
  • STARZ pricing reports: Variety; Cord Cutters News .