Lionsgate Reports Lower Revenues and Wider Losses in Q1 Fiscal 2026 Amid Strategic Shifts and Upcoming Releases
Lionsgate Reports Mixed Q1 Results Amid Strategic Shifts
Hollywood, CA – October 12, 2023 – Lionsgate, the renowned entertainment studio, unveiled its first-quarter fiscal 2026 results on Thursday, revealing a complex financial landscape marked by lower revenues and a widened loss, now without the contributions from its former subsidiary, Starz.
Under the leadership of CEO Jon Feltheimer, Lionsgate reported a net profit attributable to shareholders of $108.9 million, a significant turnaround from the $59.4 million loss recorded in the same period last year. However, overall studio business revenue dipped to $556 million, down from $590.7 million a year earlier. Notably, this total revenue figure surpassed Wall Street expectations by $3 million.
Despite the positive net profit, Lionsgate faced challenges, posting an earnings per share loss of 40 cents, compared to a 24-cent loss in the previous year. The adjusted operating income before depreciation and amortization (OIBDA) reflected a loss of $3.7 million, underscoring the hurdles the studio is navigating in a competitive market.
The newly-formed Lionsgate Studios, which encompasses the Motion Picture Group and Television Studio business alongside a vast library of 20,000 films and TV shows, is now operating independently from Starz, which has become a standalone publicly traded entity.
The Motion Picture division saw revenues decline to $267.3 million, down from $349.6 million in the previous year, attributed to the absence of carry-over profits from blockbuster titles like The Hunger Games: The Ballad of Songbirds & Snakes. The studio’s recent theatrical release, Ballerina, a spin-off from the popular John Wick franchise, has garnered nearly $140 million globally, although it has underperformed at the domestic box office.
Looking ahead, Feltheimer expressed optimism about the studio’s future, highlighting three major upcoming releases that are expected to anchor Lionsgate’s fiscal 2027 slate: The Hunger Games: Sunrise on the Reaping, currently in production in Spain for a Thanksgiving 2026 release; the Michael Jackson biopic Michael, set for April 24, 2026; and Mel Gibson’s highly anticipated sequel, Resurrection of the Christ, which will debut in two parts in March and May 2027.
In the television sector, Lionsgate reported a revenue increase to $288.5 million, up from $241.1 million the previous year, driven by a rise in episodic deliveries and successful new series. Feltheimer pointed to premium offerings like The Studio for Apple TV+ and The Hunting Wives on Netflix as key contributors to this growth.
The Motion Picture division’s segment profit fell sharply to $2.4 million from $85.2 million a year earlier, while the TV Production segment saw profits rise to $26 million from $10.7 million.
During the analyst call, Feltheimer discussed potential partnerships to enhance the management and production of 3 Arts Entertainment, which Lionsgate holds a 75 percent stake in, as a strategy to alleviate debt and fuel growth. He also defended the recent separation from Starz, asserting that it opens up new strategic avenues in an evolving entertainment landscape.
As Lionsgate navigates these challenges and opportunities, Feltheimer emphasized the value of the studio’s content library, its established franchises, and its interests in ancillary markets such as video gaming and Broadway shows, all of which he believes will bolster the studio’s future earnings potential.
With a keen eye on strategic transactions, Feltheimer remains focused on maximizing Lionsgate’s appeal to potential suitors, hinting at the studio’s robust position in a rapidly consolidating industry.
