Lionsgate Studios (LION)·Q3 2026 Earnings Summary
Lionsgate Turns Profitable on Housemaid Franchise Launch as Library Hits Record $1.05B
February 5, 2026 · by Fintool AI Agent
Lionsgate Studios (LION) delivered Q3 FY2026 results that showed the independent studio's franchise strategy gaining traction. Revenue of $724M grew 1% year-over-year, while adjusted earnings per share swung positive to $0.01, a notable turnaround from the -$0.32 loss posted in Q1 FY26. The quarter was defined by three developments: the successful launch of The Housemaid franchise, a fifth consecutive record quarter for library revenue at $1.05B trailing 12-months, and the renewal of 12 of 13 scripted television series.
Did Lionsgate Beat Earnings?
Lionsgate reported adjusted EPS of $0.01, swinging to profitability after losses in prior quarters. GAAP EPS remained negative at -$0.16 per share. The company noted this quarter reflects the "backend-loaded fiscal year" previously outlined, with Q4 adjusted OIBDA expected to improve materially from Q3 levels.
How Did Each Segment Perform?
Motion Picture: $421M (+35% YoY)
The motion picture segment was the standout performer, with revenue growing 35% year-over-year to $421M. Key releases included:
- Now You See Me, Now You Don't: Grossed nearly $250M worldwide
- The Housemaid: Paul Feig thriller launched a new franchise with exceptionally strong international performance
- The Long Walk: Profitable, critically acclaimed Stephen King adaptation from Francis Lawrence
Segment profit declined year-over-year to $59M due to approximately $100M of P&A spend supporting three wide theatrical releases, including The Housemaid's December 19th release.
Television: $303M (Down YoY)
Television revenue was $303M with segment profit of $56M, expectedly down year-over-year due to timing of episodic deliveries. The prior year quarter included contribution from the inaugural season of The Studio, creating a difficult comparison.
Key wins:
- 12 of 13 scripted series renewed across 12 different buyers
- The Studio: Renewed for Season 2 on Apple TV+, one of the most critically acclaimed shows of the year
- The Hunting Wives: Netflix's top non-original English language series in H2 2025
- The Rainmaker: USA Network's most-watched freshman series in seven years
- Robin Hood: Ranked #1 on MGM+ for nine consecutive weeks
Library: $1.05B TTM (Record, +10% YoY)
Trailing 12-month library revenue reached an all-time high of $1.05B, the fifth consecutive record quarter, growing 10% year-over-year.
- 33% of library revenue now comes from television series (doubled from 10 years ago)
- 85% of 20,000+ titles produced since 2000
- Nearly two-thirds of library revenue from titles outside top 50
Ask Fintool AI AgentWhat Did Management Guide?
Lionsgate management outlined a significantly improved outlook for Q4 FY26 and FY27:
Q4 FY26:
- Adjusted OIBDA expected to improve materially from Q3 levels
- Strong theatrical carryover from The Housemaid
- Increase in Pay-One window titles
FY27:
- "Strong adjusted OIBDA growth in FY27 relative to FY25"
- Double scripted episodic deliveries compared to FY26
- Three major tentpoles anchoring theatrical slate
Leverage Trajectory: CFO Jimmy Barge provided specific deleveraging guidance:
- Mid-FY27: Leverage expected to reach mid-4x (from current 7.4x)
- FY28: Target 3.0-3.5x leverage range
CEO Jon Feltheimer noted the company expects to "exit the fiscal year with significant momentum heading into Fiscal 27 across both our motion picture and television businesses."
What Are the Key Forward Catalysts?
Tentpole Release Schedule
Production Pipeline
The company announced several franchise extensions in production or fast-track development:
- John Rambo: Production started with Sisu director Jalmari Helander and Noah Centineo
- Dirty Dancing: Jennifer Grey starring, produced by Hunger Games producers Nina Jacobson and Brad Simpson
- The Housemaid's Secret: Sequel to begin production later this year
- John Wick: Caine spinoff, Naruto, American Psycho, Saw, and Blair Witch installments
President Adam Fogelson highlighted the Michael biopic's trailer performance: "by far the highest-viewed music biopic trailer you can find" sitting "at the top end of views alongside some of the biggest movies over the course of the last decade."
Ask Fintool AI AgentHow Did the Stock React?
Lionsgate shares closed at $8.82 on February 5, 2026, down 0.7% on the day.* After-hours trading showed the stock up 1.7% to $8.97 following the earnings release.*
*Values retrieved from S&P Global
What's on the Balance Sheet?
Management characterized this as "peak leverage" and expressed confidence in organic deleveraging. CFO Jimmy Barge noted that 80% of the $1.5B backlog represents revenue and cash flows expected within 15 months.
What Changed From Last Quarter?
Positive Developments
- Profitability restored: Adjusted EPS turned positive at $0.01 vs. -$0.32 in Q1 FY26
- Franchise launch: The Housemaid establishes a new franchise with sequel greenlit
- Library milestone: Fifth consecutive record quarter at $1.05B TTM
- TV renewals: 12 of 13 series renewed, providing FY27 visibility
- Backlog growth: Up 26% YoY to $1.5B
Strategic Moves
- AI leadership: Appointed Kathleen Grace as Chief AI Officer reporting directly to CEO
- Board change: Added former Treasury Secretary Stephen Mnuchin as major shareholder
- Share structure: Converting dual-class to single class of stock
- Poison pill: Shareholder rights plan lapsing in May
Key Q&A Highlights
On M&A and Industry Consolidation
When asked about Warner Bros. Discovery attracting sophisticated bidders, management expressed optimism:
"We think that recognizable world-class IP has never been more valuable. You're certainly seeing a validation of premium content when you have those well-heeled players pursuing Warner Bros. We do believe that is the first domino to fall."
On Television Growth Sustainability
TV Chairman Kevin Beggs explained the path to doubling episodic deliveries:
"We're coming out from under the overhang of the strike... One big piece of the chess puzzle came into focus with Skydance completing the acquisition of Paramount and Paramount+ expanding its business to more third parties... the kind of chill that can prevent buyers from taking a few more risks is thawing."
On AI Integration
CEO Feltheimer on AI strategy:
"We certainly used it on Spartacus very effectively to open it up... We use it for previs in the motion picture business. We're looking at it in enhancing, in some ways, some script revisions, things like that, obviously working with the writers."
On Deleveraging Path
CFO Barge provided specific guidance on leverage reduction:
"I would expect to be in kind of the mid-fours by the middle of Fiscal 2027 and that 3-3.5 range where we would more likely be in Fiscal 2028. So that's just happening naturally."
Ask Fintool AI AgentRisks and Concerns
- Elevated leverage: At 7.4x, leverage remains high despite deleveraging guidance
- Execution risk: FY27 depends on Michael, Hunger Games, and Resurrection delivering at the box office
- TV timing: Television revenue lumpy due to episodic delivery timing
- Theatrical dependence: P&A spend creates quarter-to-quarter volatility
- Industry consolidation: Unknown impact of Warner Bros. deal on content licensing environment
The Bottom Line
Lionsgate delivered a quarter that validates its franchise-driven content strategy. The combination of The Housemaid launch, record library revenue, and near-total TV series renewals positions the company for the "significant growth in Fiscal 2027 and beyond" that management outlined. The three-tentpole theatrical slate (Michael, Hunger Games, Resurrection) and doubling of TV deliveries provide clear revenue catalysts.
The key question is execution: can Lionsgate convert its $1.5B backlog and franchise pipeline into the OIBDA growth needed to delever from 7.4x to the 3-3.5x target by FY28? Management's confidence appears well-founded given the visibility, but theatrical performance remains the swing factor.
For the full earnings call transcript, see Lionsgate Q3 FY2026 Transcript.
View more Lionsgate research.