Summary of Lionsgate Q1 Fiscal 2027 Earnings Call

1Key Financial Results and Metrics

Revenue: Grew 48% year-over-year to $777 million.

Adjusted OIBDA: Improved to $79 million.

Operating Income: Reported at $26 million.

Diluted Loss per Share: $0.10; Diluted Adjusted Earnings per Share: $0.06.

Free Cash Flow: Strong performance at $129 million.

Trailing 12-Month Library Revenue: $987 million, consistent with the prior year.

Backlog: Increased by 21% year-over-year to $1.5 billion.

Motion Picture Revenue: More than doubled year-over-year to $587 million, with segment profit reaching $105 million.

2Strategic Updates and Business Highlights

Content Strategy: Focus on a pure-play content strategy with a growing portfolio of franchise-driven intellectual properties.

Film Releases: Successful launches of "Michael" and "The Housemaid," with significant box office contributions.

Upcoming Films: Strong anticipation for "The Hunger Games: Sunrise on the Reaping," with early indicators suggesting potential for high performance.

Television Strategy: Achieved 13 for 13 in scripted series renewals across 12 different buyers, indicating strong demand and diversification.

Library Monetization: Continued strength in library revenue, with "Dirty Dancing" being a notable contributor.

AI Utilization: Emphasis on leveraging AI for cost reduction and revenue enhancement in production processes.

3Forward Guidance and Outlook

Fiscal 2027 Expectations: Anticipate significant growth in adjusted OIBDA and free cash flow, supported by strong theatrical releases and television deliveries.

Leverage Improvement: Net debt reduced to approximately $1.5 billion, with leverage improving to 4.3x, expected to trend towards 3 to 3.5x in fiscal 2028.

Continued Library Strength: The backlog and library monetization are expected to contribute positively to future revenues.

4Bad News, Challenges, or Points of Concern

Television Revenue Decline: Television segment revenue and profit were down compared to the prior year due to timing of episodic deliveries.

M&A Speculation: While Lionsgate remains a compelling asset in a consolidating market, management has not engaged in substantive discussions regarding potential M&A.

Market Uncertainty: Concerns regarding the competitive landscape and the impact of ongoing industry consolidation.

5Notable Q&A Insights

IP Relevance: Management emphasized the importance of audience demand in selecting projects, with a focus on characters and storylines that resonate with fans.

Power Licensing Deal: The Netflix deal for the "Power" franchise is expected to enhance global exposure and revenue potential, benefiting both Lionsgate and Starz.

Michael's Profitability: Profit sharing for "Michael" is structured traditionally, with expectations of strong long-term profitability from various revenue streams.

AI and Technology: Management is optimistic about the role of AI in enhancing production efficiency and revenue generation, with a commitment to responsible deployment alongside creative talent. Overall, Lionsgate reported a strong first quarter with significant growth in revenue and strategic initiatives that position the company favorably in a competitive media landscape. However, challenges in television revenue and market uncertainty remain areas to watch.