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Lionsgate’s Q3 Fiscal 2026 Financial Overview

Overview of Financial Performance
On Thursday, Lionsgate reported its third-quarter financial results for fiscal 2026, reflecting a noteworthy increase in overall film and television studio revenues. However, the company also experienced a significant widening of its financial loss after the strategic decision to spin off its Starz streaming platform. This move is part of a broader strategy to realign its focus on core business areas.

Losses and Revenues
Lionsgate, under the leadership of CEO Jon Feltheimer, reported a net loss attributable to shareholders of $46.2 million. This represents a considerable increase from the previous year’s loss of $21.9 million. For the latest quarter ending December 31, 2025, the company’s overall revenue climbed to $724.3 million, surpassing last year’s figure of $628.2 million. This performance exceeded analysts’ expectations, which had predicted revenues to reach $705.9 million for that quarter.

Earnings Deductions
Despite the rise in revenues, Lionsgate experienced a loss of 16 cents per share, compared to a year-earlier loss of 9 cents per share. Adjusted diluted net income per share stood at just 1 cent, indicating challenges in profitability amidst rising revenues. The adjusted Operating Income Before Depreciation and Amortization (OIBDA) fell to $85.3 million, down from $115.2 million in the same period last year. However, the company did witness a 10 percent growth in trailing 12-month library revenue, reaching $1.05 billion.

Major Movie Franchises and Box Office Performance
Lionsgate continues to be a key player in the film industry, being the force behind highly successful franchises such as John Wick and The Hunger Games. The third quarter saw significant box office successes, particularly with Paul Feig’s The Housemaid and Ruben Fleischer’s Now You See Me: Now You Don’t. Anticipation builds for the production of the sequel, The Housemaid’s Secret, scheduled to start later this year, promising continued profit contributions heading into the fourth quarter and fiscal 2027.

Television Revenue Insights
The motion picture segment has driven Lionsgate’s revenue forward with a remarkable 35 percent increase to $421.2 million, up from $311.4 million the previous year. In contrast, TV production revenue declined to $303.1 million from $404.6 million, attributed to the timing of episodic deliveries. However, strong TV library revenue helped mitigate some losses. Noteworthy series include The Studio on Apple TV, The Hunting Wives on Netflix, and The Rainmaker on the rookie USA Network. Lionsgate has successfully secured renewals for 12 of its 13 current scripted series, anticipating a doubling of episodic deliveries for fiscal 2027.

Navigating Industry Disruption
In a media call following the financial report, CEO Jon Feltheimer addressed the various disruptive forces transforming the entertainment industry—such as the rise of artificial intelligence (AI) and the increasing influence of social media platforms. "Although many challenges confront our industry, we believe we are well-prepared to adapt dynamically and sustainably," he stated, reflecting Lionsgate’s commitment to navigate through these changes effectively.

Competitive Landscape and Future Outlook
Feltheimer commented on the competitive landscape, particularly the ongoing contest between Netflix and Paramount over Warner Bros. Discovery, which may lead to increased sales of Lionsgate films in a consolidating market. He suggested that the current conditions could pave the way for favorable opportunities for Lionsgate.

AI Integration into Filmmaking
In a bid to harness new technologies, Lionsgate has appointed Kathleen Grace as its first Chief AI Officer, underscoring the importance of generative AI in filmmaking. Feltheimer emphasized that Grace’s role signifies the studio’s intention to explore AI’s potential applications across all facets of its operations. "We already have AI integrated into our technical operations, including post-production," he confirmed, hinting at innovative uses in creative areas as well, though specifics were not disclosed.

Participation in Industry Consolidation
Discussions about Lionsgate’s potential role in industry consolidation were also raised. Michael Burns, the studio’s vice chairman, remarked on the escalating value of recognizable IP, acknowledging the competitive push to acquire premium content by larger players like Warner Bros. The unfolding narrative surrounding such mergers hints at potential future developments that could reshape the entertainment landscape.

Upcoming Releases and Marketing Strategies
On the analyst call, Adam Fogelson, chair of the Motion Picture Group, highlighted excitement for the upcoming Michael Jackson biopic, Michael, scheduled for a global rollout on April 24. He expressed confidence in the film, stating, “We believe that what has been created is exceptional,” while also noting that key marketing indicators are displaying strong metrics, positioning the project favorably in the lead-up to its release.

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