Lionsgate announced its second-quarter financial results after spinning off the media giant’s studio business into a standalone stock earlier this year.
The studio, led by CEO John Feltheimer, posted a net loss of $887.9 million in the year-ago period, due to the impact of non-cash goodwill and intangible asset write-downs and media network restructuring charges. The loss narrowed to $177.8 million. Split.
Lionsgate is the studio behind “John Wick,” “The Hunger Games” and other film franchises, and Mr. Feltheimer spoke in prepared remarks to Wall Street analysts on a post-market conference call. It said the latest financial results come “at a time when industry turmoil continues and the impact of last year’s strike lingers.” And it had disappointing theatrical box office results. ”
In its most recent financial quarter, Lionsgate’s overall revenue fell to $948.6 million, compared to $1.01 billion in the year-ago period. The latest financial frame beat analyst consensus for second-quarter revenue of $921 million. Adjusted loss per share was 43 cents, beating analyst consensus by 5 cents.
In the first quarter, the company’s studio business, which combines film and television production divisions, reported film revenue of $407.1 million, up from $396 million in the same period in 2023, and television production revenue of $416.6 million. reached the dollar. In the same period last year, it was $394 million.
Revenue from the Media Networks division, dominated by Starz Networks, fell to $347 million from $416.5 million in the year-ago period.
Faced with industry-wide turmoil, Lionsgate CEO John Feltheimer did not elaborate on his company’s latest financial results. “During a transitional, turbulent and difficult year for our industry, we reported disappointing financial results for the quarter. Diversification and stricter adherence to strict financial discipline The combination of a return to solid content, continued strong performance in our film and television library, and solid execution puts us on a path to solid growth and shareholder value creation. I will be back,” he said in a statement.
Feltheimer expanded on these comments to analysts, adding: In our film group, the weak box office performance of Borderlands, combined with the weaker-than-expected results of other films in the quarter, reflected an environment with less margin for error than ever before. ”
“Pretty much everything that could go wrong went wrong,” the Lionsgate boss said of Eli Roth’s Borderlands, the live-action adaptation of the popular video game, which was shelved for too long during the pandemic. , it took time to reshoot and the interest rate went up.” It’s outside the comfort zone of our usual rigid financial models. Several of our other releases during the quarter were tempered by financial models that worked as intended but did not meet our standards or expectations. ”
Lionsgate Chief Financial Officer Jimmy Burge said Borderlands’ box office success was “beyond our expectations given the underlying IP cast and the size of the film’s budget.” I was so disappointed that I added in the loss due to Borderlands. The film’s A-list cast includes Cate Blanchett, Kevin Hart, Jack Black, Edgar Ramirez, Ariana Greenblatt, Gina Gershon, and Jamie Lee Curtis, which makes possible Lionsgate’s business model of keeping budgets as low as possible and selling theatrical release rights to foreign countries has been expanded. A title that offsets the risk.
“As always, we have learned valuable lessons from every release, and Borderlands is no exception. We are confident that our processes going forward will help reduce the likelihood of similar outcomes occurring in the future.” ” Burge added.
To mitigate the impact of industry disruption, Lionsgate has completed the separation of its studio operations from Starz, strengthened its theatrical release schedule with an expected three to four films per year starting in fiscal 2026, and strengthened its television production schedule. We are launching a new free movie. Ad-supported streaming channels.
But Feltheimer added that his studio’s business model, which positions Lionsgate as a more cost-conscious studio than its larger Hollywood rivals, remains valuable to investors.
“Despite the above, our business model remains functional: reduced-risk film and television planning, efficient production and marketing spend, a diversified asset portfolio, and a ballast for our business. It is a powerful library that operates as a library, generating nearly $900 million in trailing-twelve-month revenues for the quarter. But emphasizing the success of a financial model is no substitute for acquiring creative rights,” Feltheimer argued.
Now, Lionsgate and its Motion Picture Group are “returning to an even stronger and more diverse film vision in 2026, led by the strong production of Michael, the Ballerina, and Now You See Me 3.” Preparations are progressing well,” Feltheimer told analysts. “Additionally, Francis Lawrence will direct the sixth Hunger Games movie after completing The Long Walk, an adaptation of Stephen King’s classic novel. “We are a business focused on and making the most of one of our most valuable brand and franchise portfolios,” he added.
Lionsgate recently announced that Paul Feig will direct the thriller The Housemaid, starring Sidney Sweeney and Amanda Seyfried, and Challengers director Luca Guadagnino will direct Lionsgate’s classic American Psycho. The Amazing Spider-Man filmmaker Marc Webb has announced that he will direct Johnny Depp and Penelope Cruz. With Daydrinker.
Motion Picture Group Chairman Adam Fogelson said the studio will continue to be financially disciplined, but will make even bigger moves to bring commercial hits to market. “There are so many franchises that we’re trying to focus on because our audiences are asking us to do that,” he said, citing the John Wick franchise expanding into TV and gaming as an example. he said.
Regarding television, Feltheimer said the “market correction” that followed the collapse of Hollywood’s peak TV era affected the studio’s scripted and unscripted television business as buyers ordered fewer shows and destroyed long-standing business models. He said that he is giving.
Until streaming platforms change their content strategies for sustainable profitability and reach the “new normal” that Lionsgate expects, Feltheimer told analysts that his company’s television business “is not expected to meet our expectations.” “We’re doing everything that’s expected of us: cutting costs, cutting costs, cutting costs.” We will continue to evaluate combinations of scripted business models to consolidate smaller labels and increase the efficiency of our unscripted business, reducing risk and maximizing profits. ”
At the same time, Lionsgate Television Group Chairman Kevin Beggs insisted that the division is making major changes of its own to keep up with industry rivals and changes in TV ratings. Lionsgate searches for and finds a new network buyer as major studios like Warner Bros. Discovery and Paramount Global move under the Skydance Media umbrella and grapple with their own changing businesses. “We are certainly seeing a lot of green shoots on the development front,” he added. A model amidst industry turmoil.
Beggs added that the company is cutting its own TV series budgets to allow networks and streaming partners to cut costs. “Our first choice is to create as many originals as possible to make money and build our library, but we have to be flexible and adapt to the market,” he added.
The launch of Lionsgate Studios on Nasdaq will give the Hollywood studio options such as raising new capital or merging with existing operations before completing the long-awaited separation of the film and television studio and Starz. purpose.
Asked about the possibility that Donald Trump’s new administration in Washington, D.C., will promise to deregulate and consolidate the industry, Feltheimer said the turmoil in Hollywood would likely lead to an increase in merger and acquisition activity. “Certainly we’re going to see a lot of companies move away from these conglomerates,” he predicted.
Lionsgate Studios consists of Lionsgate’s film group and television studio operations and a 20,000-strong film and television library.
