Net Loss for Lionsgate in “Disappointing” Quarter

Lionsgate posted a net loss of $163.3 million on revenues of $948.6 million in what CEO Jon Feltheimer referred to as a “disappointing” second quarter.

“In a transitional, disrupted and difficult year for our industry, we reported disappointing financial results in the quarter,” said Feltheimer. “Our performance underscores the need to adhere even more rigorously to the risk mitigated business models, slate diversification and strict financial discipline that have always served us well. The combination of a return to strong content slates, the continued stellar performance of our film and television library and sure-handed execution will put us back on the path to solid growth and shareholder value creation. We’re pleased to report STARZ remains on track to reach its full year target of $200 million adjusted OIBDA and remains well-positioned for the upcoming separation of our studio and STARZ businesses.”

Reporting consolidated results for Lionsgate and Lionsgate Studios (consisting of the film and TV production segments), the company said it is on track for the full separation of its studio and STARZ businesses by the end of the calendar year.

Amid the challenging quarter, 8 percent of eligible employees opted for voluntary severance and early retirement packages as the firm “continues to streamline its business by adjusting to the economic realities of the marketplace.”

The studio business delivered revenues of $823.7 million, a 4 percent gain, with an operating loss of $34.8 million. Motion picture revenues increased by 3 percent to $407.1 million, while profit fell to $2.6 million, driven by the underperformance of Borderlands as well as the soft performance of other theatrical releases in the period. Television production revenues were up 6 percent to $416.6 million, bolstered by series deliveries to STARZ, while segment profit decreased to $24.4 million amid ongoing impacts from the 2023 Hollywood strikes.

At the media networks, revenues were stable at $343 million, with higher ARPU offsetting subs losses. Higher content amortization resulted in the lower segment profit of $26.9 million. OTT subs in North America fell by 2.6 percent to 12.4 million.