Earnings call transcript: Lionsgate Q1 2025 reveals strategic expansions

Lionsgate Studios Holding Corp reported its Q1 FY2026 earnings, revealing a revenue of $556 million and an operating loss of $10.6 million. Despite these figures, the company is focusing on strategic expansions and new content projects, which has kept investor sentiment stable. The stock closed at $5.91, showing a slight increase of 0.68% in the aftermarket session. According to InvestingPro data, the company currently carries a substantial debt burden of $4.76 billion, with short-term obligations exceeding liquid assets, as reflected in a current ratio of 0.36.

Key Takeaways

• Lionsgate reported Q1 FY2026 revenue of $556 million.
• The company experienced a 12% YoY growth in its library revenue.
• New film and TV projects are in development, including a new Hunger Games film.
• Lionsgate is expanding its global products and experiences group.
• The company is focusing on digital platforms and interactive experiences.

Company Performance

Lionsgate’s Q1 FY2026 performance showed resilience despite an operating loss of $10.6 million. The company’s trailing 12-month library revenue increased by 12% year-over-year, reaching $989 million. Motion Picture and TV revenues were $267 million and $289 million, respectively, with the latter showing a notable 20% increase YoY. The company continues to navigate a challenging market environment with a focus on strategic content development and expansion into digital platforms.

Financial Highlights

• Revenue: $556 million
• Adjusted OIBDA: Loss of $3.7 million
• Operating Loss: $10.6 million
• Trailing 12-month library revenue: $989 million (12% YoY growth)
• Motion Picture Revenue: $267 million
• TV Revenue: $289 million (20% YoY increase)
• Net Debt: $1.5 billion

Market Reaction

Lionsgate’s stock saw a modest increase of 0.68% in the aftermarket, closing at $5.91. The stock remains within its 52-week range, with a high of $9.14 and a low of $5.55, though currently trading near its 52-week low. Analyst consensus suggests potential upside, with price targets ranging from $8.00 to $10.71. Based on InvestingPro’s Fair Value analysis, the stock appears to be overvalued at current levels. This assessment, along with detailed valuation metrics, is available in the comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks.

Outlook & Guidance

Looking forward, Lionsgate anticipates a back-end loaded fiscal year 2026, projecting solid two-year adjusted OIBDA growth from FY2025 to FY2027. The company has three major tentpole films planned for FY2027 and expects a significant increase in TV episodic deliveries, underscoring its commitment to expanding its content library and audience reach.

Executive Commentary

CEO John Feltheimer emphasized the company’s strong position in content ownership: "We own most of our library in perpetuity in both film and television." He also highlighted the company’s diverse content strategy, stating, "We’re delivering content to every audience, every demo, and every kind of platform."

Risks and Challenges

• The return of blockbuster box office levels remains uncertain post-pandemic.
• Streaming platforms are increasingly focusing on profitability, which may affect distribution deals.
• The company carries a significant net debt of $1.5 billion, posing financial challenges.
• Competition in digital and interactive content spaces is intensifying.

Q&A

During the earnings call, analysts inquired about potential strategic transactions and the company’s library monetization strategies. Lionsgate confirmed its ongoing focus on IP-driven content and the exploration of FAST platforms and alternative distribution methods.

Full transcript - Lionsgate Studios Holding Corp (LION) Q1 2026:

Conference Operator: Good day, and welcome to the Lions Gate First Quarter twenty twenty six Earnings Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mele Shah, Head of Investor Relations.

Please go ahead.

Mele Shah, Head of Investor Relations, Lions Gate: Good afternoon. Thank you for joining us for the Lions Gate Studios Corporation’s fiscal twenty twenty six first quarter conference call. We’ll begin with opening remarks from our CEO, John Feltheimer followed by remarks from our CFO, Jimmy Barge. After their remarks, we’ll open the call for questions. Also joining us on the call today are Vice Chairman, Michael Burns COO, Brian Goldsmith Chairman of the TV Group, Kevin Beggs Chairman of the Motion Picture Group, Adam Fogleson President of Worldwide TV and Digital Distribution, Jim Packer and Senior Advisor to the Office of the CEO at Lionsgate and Co CEO of 3Arts, Brian Weinstein.

The matters discussed on the call also include forward looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward looking statements as a result of various factors. This includes the risk factors set forth in our public filings for Lions Gate Studios Corp. The company undertakes no obligation to publicly release the result of any revisions to these forward looking statements that may be made to reflect any future events or circumstances.

I’ll now turn the call over to John.

John Feltheimer, CEO, Lions Gate: Thank you, Neele, good afternoon, everyone. Thank you for joining us. We’re reporting a quarter in line with expectations in what will be a busy transitional year for our studio as we continue to refill our film and television pipelines, expand key franchises, create fresh revenue streams for our library and extend our IP to a new generation of consumers. During the quarter and throughout this fiscal year, we’re taking a number of important steps towards returning to the solid and significant growth in fiscal twenty seven that we’ve previously projected. The Hunger Games Sunrise on the Reaping began shooting in Spain last week with Francis Lawrence directing one of our strongest Hunger Games cast ever for a 11/20/2026 release.

Together with our partners at Universal, we dated our global theatrical event film, Michael, for release in theaters and on IMAX on 04/24/2026, kicking off our fiscal year with a major tentpole and giving an early start to next summer’s box office. As you read earlier this week, we will release Mel Gibson’s Resurrection of the Christ, his long awaited follow-up to The Passion of the Christ in two parts six weeks apart. The first film will open on Good Friday in March 2027, and the second film will be released on Ascension Day in May 2027. Our fiscal twenty seven is now anchored by three major tentpoles, The Hunger Games, Michael and the first Resurrection film. The second Resurrection film allows us a tentpole start to fiscal twenty eight.

During the quarter we announced a new SAW deal partnering with Blumhouse and Atomic Monster and putting the franchise back in the hands of its original co creators James Wan and Leigh Whannell. The deal elevates Saw to a new level of potential box office performance while maintaining our existing ownership and distribution. Our Seth Rogen, Evan Goldberg produced comedy, The Studio for Apple TV plus earned 23 Emmy nominations, the most ever for a freshman comedy, and the series has already been renewed for a second season. The Hunting Wives from Lionsgate Television and Three Arts Entertainment has entered the zeitgeist, debuting at number three on Netflix’s top 10 list in its first week. Remarkably it has moved up to number two on their global list of English speaking shows though it is only playing in The US.

Finally, our library driven by a significant lift in the John Wick titles due to the release of Ballerina reported strong quarterly revenues on its way to setting yet another record with nearly a billion dollars in trailing twelve month revenue. Turning to our individual businesses, the Motion Picture Group’s results in the quarter were impacted by the domestic box office performance of Ballerina. However, the film is approaching a 140,000,000 at the worldwide box office, overperforming in the ancillary markets, and most importantly, satisfied our John Wick fans. This year’s slate is backloaded with Francis Lawrence’s gripping adaptation of the Stephen King novel, The Long Walk, the feel good comedy, Good Fortune, starring Keanu Reeves, Seth Rogen, and Aziz Ansari, and the third installment of the Now You See Me franchise with Ruben Fleischer directing. The wildly entertaining thriller, The Housemaid, directed by Paul Feig and starring Sidney Sweeney and Amanda Seyfried, based on the New York Times best selling novel, is testing exceptionally well and is all the earmarks of a holiday season breakout.

But our slate extends far beyond the theatrical box office to engage a new generation of audiences who want to watch and experience their content. We’ve expanded the focus of our global products and experiences group to include virtual experiences, interactive games and partnerships with leading digital platforms that complement our ongoing initiatives. In the virtual world, we recently announced a partnership with Roblox, which has more than a 100,000,000 daily active users to license our franchises to the next generation of talent in the creator economy. As part of our effort to extend our franchise into real world experiences, we opened the John Wick Experience in Las Vegas in March and received a 4.9 Google rating from visitors. We’re currently in talks to expand it to other cities.

And several of our key properties are being readied for launch on Broadway and other stages around the world with advanced tickets selling well in anticipation of the Hunger Games on stage opening in London in October and La La Land shepherded by Wicked producer Mark Platt targeting a Broadway opening next year to be followed by Dirty Dancing and then Wonder. Turning to television. We reported a strong quarter driven by higher episodic deliveries, higher margins on our new series, and lower G and A as we continue to cut costs. During the quarter, we continued to lean into the high end premium series that have always been our core strength. The studio and the Hunting Wives join a slate that includes the comedy Ghosts and the procedural The Rookie, which continue to be perennial ratings leaders on CBS and ABC respectively.

Coming up, we have the epic gladiator drama Spartacus House of Asher and the spin off Power Origins for Starz, the Twilight TV series adaptation Midnight Sun for Netflix, and John Wick under the high table for a major streamer. The Rainmaker adapted from John Grisham’s bestseller debuts on USA Network next week. Though we continue to see pressure in the broader TV operating environment, we’re continuing to deliver noisy properties that resonate across every genre, economic model, and type of platform. Whether it’s our partnership with Roblox unlocking opportunities for creators or restructuring our SAW deal to take it to the next level of box office performance, rolling out three dozen proprietary fast channels to create new revenue streams for our library or partnering with Roku earlier this week on the new SVOD service, Howdy. Collaborating with YouTube on branded channels for Gen Z and Gen Alpha audiences, amassing 6,000,000 TikTok followers for our movies ranking second only to Disney among Hollywood studios or earning a record 23 Emmy nominations for the studio on Apple TV plus.

We’re delivering content to every audience, every demo, and every kind of platform in our capacity as a content arms dealer of choice. In closing, there are a lot of things we cannot control in the current operating environment. Streamers cutting back as they focus on profitability rather than subscriber growth, a blockbuster centric box office that has yet to return to pre pandemic levels, and a new generation of audiences who look at content in completely different ways than their predecessors. But there are also a lot of things we can control extending our brands to reach the critical Gen Z and Gen Alpha audiences on the platforms where they live, Operating as a first mover in incorporating AI technology across our businesses increasing efficiency, creating significant cost savings and helping us program our self directed channels. Cutting costs and streamlining our organization to align with where the business is headed and continuing to exploit and strengthen our core asset, our library and portfolio of IP with more than 30 franchise properties in active development and production through prequels, sequels, spin offs and adaptations.

If we execute well in these areas, we will return to the kind of growth in fiscal twenty seven that our shareholders expect. Now I’d like to turn things over to Jimmy.

Jimmy Barge, CFO, Lions Gate: Thanks John and good afternoon everyone. I’ll briefly discuss our fiscal first quarter twenty twenty six studio financial results and provide an update on the balance sheet. For the quarter, Lionsgate Studios revenue was $556,000,000 adjusted OIBDA was a loss of $3,700,000 and operating loss was $10,600,000 Reported fully diluted loss per share was $35 and fully diluted adjusted loss per share was $0.32 Net cash flow used in operating activities was $109,000,000 while use of adjusted free cash flow for the quarter was $112,000,000 Trailing twelve month library revenue grew 12% year over year to $989,000,000 reaching record levels for the third consecutive quarter. Breaking down our performance in the quarter, let’s start with Motion Picture. Motion Picture revenue was $267,000,000 and segment profit was $2,400,000 Revenue and segment profit expectedly declined year over year in comparison to the prior year, which benefited from the carryover of fiscal twenty twenty four films, including The Hunger Games, Ballad of Songbirds and Snakes, and Saw 10.

Additionally, this past quarter included P and A for the June release of Ballerina, which we expect to be recouped in the next few quarters. Moving to TV. Revenue of $289,000,000 was up 20% year over year, while segment profit of $26,000,000 was up nearly a 150%. TV continues to rebound from the strikes with revenue strength driven by growth in episodic deliveries for new and returning series, including Spartacus, Pea Valley and Hunting Wives. Now let’s take a look at the balance sheet.

We ended the quarter with $1,500,000,000 of net debt in line with the prior quarter and down from the $1,650,000,000 at the date of separation in May. Studio leverage at the end of the quarter increased to six times as lower adjusted OIBDA expectedly impacted trailing twelve month figures. Looking forward, we continue to anticipate that fiscal twenty twenty six will be a back end loaded year. We expect the upcoming wide theatrical titles in fiscal twenty six to drive strong carryover profits and long term library value in fiscal twenty seven and beyond. Coupling this with a fiscal twenty seven slate that includes three tentpole films and a TV business is expected to see a significant increase in episodic deliveries next year, we remain confident that we are still on track to deliver solid two year adjusted OIBDA growth from fiscal twenty twenty five through fiscal twenty twenty seven as we previously discussed.

Now,

Brian Goldsmith, Chairman of TV Group, Lions Gate: I’d like

Jimmy Barge, CFO, Lions Gate: to turn the call over to Nilay for Q and A.

Speaker 5: Thanks, Jimmy. Operator, can we open the call up for Q and A?

Conference Operator: Yes, sir. We will now begin the question and answer session. And our first question will come from Brent Pitzer with Raymond James. Please go ahead.

Speaker 6: Hey, everyone. Thanks for taking the questions. First one for me is, can you all update us on Three Arts and how core is that asset to Lionsgate strategically? Or is that something that you’d be willing to sell some or all of your stake to help bring down leverage?

John Feltheimer, CEO, Lions Gate: Yes, it’s John. Look, they’re doing a great job. They’re on a role in a really hot sector and there’s lots of investor interest in it. We’ve spent some money on acquiring two terrific management companies. I’m going have Brian Weinstein expand on that in a minute.

But for sure, we’re cognizant of our balance sheet and if we can bring in the right partner to help us fund the growth and help us a little on the balance sheet, think that’s something we would certainly and are considering. And Brian, why don’t you go from there?

Brian Weinstein, Senior Advisor/Co-CEO of 3Arts, Lions Gate: Sure. Thanks, John. Look, as John stated, the sector has a lot of investor interest and there’s a real commitment to the space of representation. 3Rs has long been a clear market leader in management and production and we do have quite a bit of momentum, which is exciting. We’ve acquired two businesses recently, a sports business called ANA Management and two, a broadcast news and personality business called O Management, which just further deepen our commitment to those spaces and growing the company.

We have momentum with six new shows sold, I should say renewed and a bunch of new shows sold. And in particular, the relationship with Lions Gate strong as we’ll talk about later. Hunting Wives is a project that we share together with Lionsgate as well as Los Colosorisas, which is a new show, which is currently number one on Peacock. So it’s been a productive operating time period for us and John addressed the strategic possibilities.

Speaker 6: Okay. And then the library and the IP are clearly good parts of Lionsgate’s value. Can you talk a little bit about your ownership of the library in terms of obviously you license out the international rights. So how should investors think about that record library revenue? What portion of it you own?

What portion of it you control, as we try to value Lions Gate?

John Feltheimer, CEO, Lions Gate: Yes, great question. And I’m happy to clear up together with Jim Packer who runs our global distribution,

Jim Packer, President of Worldwide TV and Digital Distribution, Lions Gate: sort of what seems to

John Feltheimer, CEO, Lions Gate: be a misconception. We own most of our library. We’ve been producing for twenty five years now. We’ve put $20,000,000,000 into production and really pretty much own all of our library at various times. We like every studio licenses out our product.

But at the end of the day, you even looked at the library results for this quarter, 29 out of the top 30 titles are titles that we own. And so, Jim, maybe you could expand on that a little bit.

Jim Packer, President of Worldwide TV and Digital Distribution, Lions Gate: Yes. I think overall, if you look at the big picture, I don’t think we’d be at $1,000,000,000 or close to $1,000,000,000 of trailing 12 if we didn’t own A big significant portion, I think if you break it down a bit. On the TV side, we control and distribute 20,000 episodes of television and we control those globally. So that part is very easy. On the film side, we released theatrically direct or directed in The U.

S, Canada, U. K, LatAm and India, which is really the majority of the global box office ex China. And in those territories we control and distribute all downstream ancillary rights. So those are a very significant portion of our revenue. For the rest of world outside of The U.

S. And Canada, we do deploy a risk mitigation model where we license. We don’t sell, but we license our rights various term lengths. We do get overages from those from our third party partners. And given as John said that since the company has been around since 2000 many of those rights a very significant portion are into our machine and being licensed by our teams.

Some other notes on the rest of world. As John mentioned, own them all, but more importantly most of them, but also through self distribution of rights and reversions this is a key stat. 75% of the top 20 franchises we control in our licensing now or will sell in the next few years. So those are the drivers of our library and I think we’re really in good shape with that.

John Feltheimer, CEO, Lions Gate: Yes. To wrap it up really the bottom line is we own most of our library in perpetuity in both film and television period.

Speaker 6: Okay. And then one final question for me. That’s super helpful. Jimmy, you talked about the impact in 1Q of some of last year’s slate. Can you quantify for us in any way kind of how much fiscal twenty twenty five benefited from the fiscal twenty twenty four slate and how much the year over year impact would be since fiscal twenty twenty six, you’re getting the later windows from the fiscal twenty twenty five slate, if that makes sense?

Mele Shah, Head of Investor Relations, Lions Gate0: Yes. There was significant carryover in the prior year quarter from the 2024 slate as you noted. And the ’25 slate obviously didn’t have the same kind of carryover in Q1. You’re talking about maybe $40,000,000 $50,000,000 if you really kind of ballpark that. And so we’re feeling good.

In fact we knew that was coming. So that was expected. We said we were back end loaded. That was one of the reasons. And similarly don’t overlook we had three releases this quarter including Ballerina.

So we had P and A, we probably had a $20,000,000 uptick in terms of P and A relative to the prior year quarter where there were two releases. So we saw that and factored it in and I think it’s in a lot of your projections for those of you on the call and it’s a back end loaded year. And when we get this ’26 slate, which we’re very proud of rolling, we’re going to have replenished the pipeline of film and TV, which is going to really propel us into that solid growth in fiscal twenty twenty seven we’re talking about. And don’t overlook the fact that Michael Jackson will release early in April of our fiscal twenty twenty seven. So there’ll be some pre spend on that in 2026 which we’re factoring in.

Again propels us into 2027. We’ve got three tentpole films with Michael Jackson in April, Hunger Games in November, Resurrection in March and we have a significant increase in our TV episodic deliveries including season two renewal, we’re very excited about for the studio, which is moved from 2026 into 2027 as well. So we really feel good about where we are.

Speaker 6: Great. Thanks everyone. Thank you.

Conference Operator: The next question will come from Thomas Yeh with Morgan Stanley. Please go ahead.

Mele Shah, Head of Investor Relations, Lions Gate1: Thanks so much. Hope you’re well. I was hoping to revisit the strategic optionality that you were hoping to unlock with the separation Hope and fully acknowledging you probably won’t comment on any M and A rumors. I thought I’d just take a shot anyway and ask how the tenor or nature of conversations around being a participant of M and A has changed pre or post separation? Is there an increased sense of urgency there?

John Feltheimer, CEO, Lions Gate: Look, I would say the whole idea about the separation was to create optionality for both sides. I think that’s exactly what’s happening. Know the Starz folks are looking at their various potential paths, especially in this really disruptive and interesting ecosystem we’re dealing with. And obviously, so are we. So I think the rationale was absolutely right.

I would say in the world we’re in, we’re the only really major with the scale that’s significantly less than the other majors. And I would say that does speak to the potential for us to look to figure out a way to take advantage of our earnings power but without some of the overhead that we have. And obviously, we are working every single day on overhead and we are cutting it. We think we’re doing a really good job on it. But I think that there’s no doubt about it that we’re focused on how to crystallize the value of our earnings power of our library of our array of intellectual property.

As I said in my remarks, it’s pretty incredible. When I look at the other companies, look at the intellectual property. We have 30 different pieces of significant intellectual property already in development in so many different ways in ancillary markets markets in reaching out to this sort of new generation of Gen Z and Gen Alpha folks, different platforms that we’re able to take it, different merchandising and licensing opportunities, really 30 significant pieces plus of intellectual property. So at the end of the day, we know what our earnings power is. As Jimmy said, we’ve got a slate going three tent poles in 2017, three tent poles in 2018 and Kevin should probably double the deliveries of scripted television into next year.

Some of the shows were pushed back a little in terms of delivery. And we’re turning around and Craig and his team are very proud to turn around the unscripted era and you’re going to see the benefit of that next year. So we understand our earnings power, but also understand with the scale we have that I think doing some kind of strategic transaction down the road is something that’s probably going to be happen. I think there’s a lot of ways that could happen and we’re pretty focused on it.

Mele Shah, Head of Investor Relations, Lions Gate1: Okay. That’s super helpful. And then as the film slate starts to line up and TV builds momentum on production, Jimmy, can you just revisit the cash spending needs for the studio on a standalone basis? Is it still kind of around that 1.6, 1.7 run rate that we’re looking at historically? And dovetailing that with just free cash flow and how to think about that for the year conversion would be helpful.

Thank you.

Mele Shah, Head of Investor Relations, Lions Gate0: Sure. Look I think on the content spend, there’ll be a little less content spend just the cycle of productions a little less in fiscal twenty twenty six probably like 1.3% then more going back to that 1.5, 1.6 level as you go into fiscal twenty twenty seven. Keep in mind next quarter, which is the current quarter right Q2, we’re in production on Hunger Games. We’ve got some prepping going on for Resurrection, of course. So a little use of continuing use of cash into Q2.

So I think on the free cash flow side of things, we’re looking at a use of cash as we go from Q1 as you saw again the P and A spend in Q1 as well as content spend going into Q2. And then mitigating the use of cash as we go through the 2026 and then accelerating into positive free cash flow into 2027. Very strong conversion again once you set aside the timing of P and A spend and the timing of the content spend, you’ve got a really strong conversion factor. Again, no real significant cash taxes, no CapEx. You have some cash interest, but the capability really to turn that for into very strong conversions.

Mele Shah, Head of Investor Relations, Lions Gate1: Thank you so much.

Conference Operator: The next question will come from Omar Magayas with Wells Fargo. Please go ahead.

Mele Shah, Head of Investor Relations, Lions Gate2: Good evening and thanks for the question. First John or Jimmy, I know this is a down year with Ballerina underperforming and Michael shifting to next year. But how should we think about adjusted OIBDA for next year and beyond once you’re back with a full slate? Just curious on how do you think about the earnings power of the business?

Mele Shah, Head of Investor Relations, Lions Gate0: Well, with regards to ’27 without putting specifics on it, I think you can look back just more broadly about the earnings power of this company. And you’ve seen we delivered 300,000,000 to $350,000,000 adjusted EBITDA. We’ve got if you really exclude the corporate overhead and look at it kind of on a gross basis you’re talking about close to 500,000,000 So the earnings power is significant. I think we move into ’27 like we said, we’re looking more specifically at as we frame very solid two year growth, right coming off the fiscal twenty twenty five. So I would just reiterate that as we’ve talked about the tent poles, we’ve talked about the episodic deliveries.

I would also say we’re significantly saving on cost across the board all categories G and A you’re going to start to see that on our distribution, on our marketing across the board. So likewise as we go throughout 2026 and into 2027, you’re going to see cost savings also as a contributing factor.

Mele Shah, Head of Investor Relations, Lions Gate2: That’s very helpful. And maybe along those same line of thinking, you have a lot of strategic value here. When looking beyond the poison pill, how do you think about the asset value of the business on a sum of the park basis? Just curious how internally you guys are thinking about the business and any color you can provide on that, that would be great. Thanks.

John Feltheimer, CEO, Lions Gate: Yes. Look, I think if you look at the history of the studio business, you know that the value of that business has typically been the value of the library and the value of the franchises. And if you do some simple math, you’d say, well, we’re as Jimmy has said before, our cash flow off of our library revenues over 50% and if we’re close to $1,000,000,000 and I got to believe we’re going to continue growing with all of the movies and TV shows we have in the pipeline. If you’re looking at $1,000,000,000 and over 50%, you’re talking about $500,000,000 With a multiple again looking historically, you’ve seen multiples well in advance of 15 times. So if you start with that, you can do the math Omar.

Add to that the value of the franchise themselves, the value of 75% of three Arts, the value of some of our other minority interests and the value of the pipeline we’ve put in terms of the ancillaries, the Broadway shows, the video games, all of that ancillary business that we’ve been developing for the last three or four years. And I’m not going to put a number on it, but I would say that would be indicative to me of how you would value some of the parts.

Mele Shah, Head of Investor Relations, Lions Gate2: Very helpful. Appreciate it guys. Thanks.

Conference Operator: Your next question will come from Peter Cipino with Wolfe Research. Please go ahead.

Speaker 5: Hi, Jack Stead on for Peter. First, was curious with fast platforms getting market share, is fast or a lower cost service like Howdy incremental to monetizing your back catalog of IP? We noticed you recently published some full length films on your YouTube channel. I’d be curious to hear how that’s going?

Jim Packer, President of Worldwide TV and Digital Distribution, Lions Gate: Great. Thanks Peter. Yes, I would say first of all we look at all these businesses as not being cannibalistic. We will always license first. So these are rights that we’re very careful to make sure that we do not do anything that would affect our licensing business and they’re really starting to grow to a level that is meaningful.

If you just look at our Amazon add on channels and you look at our fast, we’ve gone from probably a 10,000,000 to $15,000,000 number in fiscal twenty twenty three up to about 60,000,000 this year and it continues to grow dramatically. So I think overall we feel it’s a strategic business. We really like what we did with Roku because nobody is really in

John Feltheimer, CEO, Lions Gate: that space.

Jim Packer, President of Worldwide TV and Digital Distribution, Lions Gate: It’s a very inexpensive space. It’s $3 easy add on. You look at Roku with 61,000,000 active users. We think that’s the right spot to be and we think it’s a really interesting thing to only have two other partners. So we can all three of us share in the upside with Roku.

Speaker 5: Thank you.

Conference Operator: The next question will come from Alan Gould with Loop Capital. Please go ahead.

Mele Shah, Head of Investor Relations, Lions Gate3: Thank you. Question about the film strategy. Question about the film strategy. How do you see the marketplace changing right now? Are you going to get back to your typical portfolio of 10 to 12 mid range releases per year?

And Adam, I don’t think your first film that you started that you greenlit has even come out yet. What changes once we see films that are directly from you? Thank you.

Brian Goldsmith, Chairman of TV Group, Lions Gate: Thanks for the question. First of all, I would say that I think 10 to 12 is a fair number, but we’re going to scale up or down depending on the size of the larger films that we’re working from. What we’re seeing in the marketplace right now is that well made films based on IP do have a significant advantage and as John just said, we’ve got so much great IP to work with now at the studio. Some of those are larger scale films like we’ve spoken about with Hunger Games or the John Wick franchise or things like that Resurrection, but also when you talk about Saw and films like that, they don’t require a significant expenditure for us to be able to deliver a great film and some great profitability for the studio. So we are trying to lean into IP.

We’re going to we’re getting screenplays in now on both Naruto and MONOPOLY. There’s

John Feltheimer, CEO, Lions Gate: a lot of

Brian Goldsmith, Chairman of TV Group, Lions Gate: other IP that we haven’t yet begun to monetize that’s available to us. So we’re excited about that. As it relates to what’s going to be different, you are correct. The first film that was greenlit under the new team is The Long Walk in September. And as I think I stated previously, we’re looking to make films that can be creatively great.

We’re looking to make films that have a clear marketing point of view and we’re looking to make films at the right price point. And I’m very proud of what those first films represent in that regard. Every single one of them, the price point is exactly where we believe it needs to be to create real profitability and to mitigate risk. The talent making these films is fantastic. Our screening results have shown that audiences are loving this batch of films.

And so, it is still the motion picture business. Each film comes with some degree of risk, but we’re excited that creatively from a marketability standpoint and from a price standpoint, we’ve got some really great films coming down the pipeline.

Conference Operator: I could just ask a

Mele Shah, Head of Investor Relations, Lions Gate3: quick follow-up there. I know horror has been a genre that’s been very successful for Lionsgate in the past, especially all the Saw films. But it seems like the horror films are just getting much more expensive as a lot of the major studios are also getting into it. Can we still produce horror films as inexpensively and hope to have that kind of performance you’ve had in the past?

Brian Goldsmith, Chairman of TV Group, Lions Gate: Yes. I don’t think that it is necessarily the case that these films have to be expensive. Some other studios have had real success with modestly budgeted horror films. Long Legs was modestly budgeted horror film. This last Terrifier film was a very modestly budgeted horror film.

So while I think there is room because horror has been able to deliver significant grosses, one can justify more expensive horror films today than you might have been able to do five or ten years ago. But by no means has it eliminated the opportunity for lower budget horror.

Mele Shah, Head of Investor Relations, Lions Gate3: Thank you.

Mele Shah, Head of Investor Relations, Lions Gate4: Thank you.

Conference Operator: Our last and final question today will come from Matthew Hargan with Benchmark. Please go ahead.

Mele Shah, Head of Investor Relations, Lions Gate5: Thank you. I was curious if you could update us on the Twilight animated series for Netflix. And is that indicative of you might look at doing something else on the animated side? And obviously, it’s a great opportunity to be involved with Netflix, but I don’t think you’ve done that much animation. So kind of what are the gives and takes there?

And I was going to ask about MONOPOLY. Adam addressed it saying you have a screenwriter pair. But is Margot Robbie still involved with that? Or any other comments on who else might be involved with that? Thank you.

Brian Goldsmith, Chairman of TV Group, Lions Gate: Hey, it’s Adam. I’ll just quickly handle monopoly before turning it over to Kevin. So Goldstein and Daley are the writers have delivered a first draft of the screenplay. We are making revisions now. They are very, very excited as are we, as is Hasbro.

And yes, Lucky Chap, Margo and her company are actively involved creatively as producers on the film. So we are well downfield on this first step in the creative process and I think we are excited about the possibility of getting this movie into production in the near future.

Mele Shah, Head of Investor Relations, Lions Gate4: It’s Kevin speaking. On the Twilight animated, yes, we’re working with Netflix who’ve had a lot of experience in multiple shows including Blue Eyed Samurai and many other adult animation, grown up primetime animation. We’ve had an amazing experience developing the scripts. We had an incredible table read with a full cast assembled recently. We’ve been seeing some early animatics.

Stephanie Meyer and her team, our producers at both Temple Hill and Picture Start and Lions Gate are all very enthused about what that is. And engaging with this incredible IP that continues years after the last movie came out to uplift library sales and fuel our experiences and other parts of the Lions Gate ecosystem just makes this animation idea all the more powerful. And obviously, as much as we can do with Stephanie and Twilight, we want to and she’s passionate about animation and thus we are as well and we’re looking forward to getting it on the air.

Conference Operator: Great. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mele Shah for any closing remarks. Please go ahead.

Mele Shah, Head of Investor Relations, Lions Gate1: Thanks, operator. Everyone, please refer to

Mele Shah, Head of Investor Relations, Lions Gate6: the Press Releases and Events tab under the Investor Relations section of our

Speaker 5: website for a discussion of certain non GAAP forward looking measures discussed on this call. Thank you.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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