Lionsgate Studios (NYSE: LION) revenue jumps 41% and operating loss flips to profit
by Sarita Garza · The Markets DailyWhat happened
Lionsgate Studios Corp. (NYSE: LION) lifted second-quarter revenue 41% to $668.8 million and turned an operating loss into a profit.
Operating income for the quarter ended Sept. 30 was $29.1 million, against an operating loss of $46.0 million a year earlier. Adjusted OIBDA was $72.0 million, up from $14.1 million. That is an increase of $57.9 million, or 410.6%, by OptimistFi's calculation. The company adds back share-based compensation, restructuring costs and unallocated rent to reach this non-GAAP measure.
The bottom line stayed negative. Net loss from continuing operations attributable to shareholders was $15.5 million, or $0.05 per diluted share. A year earlier the loss was $111.9 million, or $0.39. Interest expense of $57.8 million, down from $67.3 million, still exceeded operating income.
A separate adjusted measure adds back items including share-based compensation and restructuring costs. It put net income from continuing operations attributable to shareholders at $20.3 million, or $0.07 per share.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| Revenue | $668.8 million | from $475.1 million, +41% | SEC 8-K, Exhibit 99.1 |
| Operating income (loss) | $29.1 million | from -$46.0 million | SEC 8-K, Exhibit 99.1 |
| Adjusted OIBDA (non-GAAP) | $72.0 million | from $14.1 million, +410.6% | Calculated from SEC 8-K, Exhibit 99.1 |
| Net loss from continuing operations attributable to shareholders | -$15.5 million | from -$111.9 million | SEC 8-K, Exhibit 99.1 |
| Trailing 12-month library revenue | $1.04 billion | SEC 8-K, Exhibit 99.1 | |
| Leverage (change shown versus June quarter) | 3.7x | -0.6x | SEC 8-K, Exhibit 99.1 |
Read more: Lionsgate Studios (LION) company research
Where the growth came from
Both segments grew, and the film side carried the profit. Motion Picture revenue rose 30% to $359.3 million. Segment profit reached $88.7 million, up from $30.5 million. The company credits the ongoing contribution of Michael and continued library strength.
Television Production revenue rose 56% to $309.5 million, and segment profit rose 73% to $21.6 million. The company says more scripted episodic deliveries drove the gain, including Power Origins and the second seasons of The Studio and The Hunting Wives. It expects to double scripted deliveries in fiscal 2027 from fiscal 2026.
Total segment profit was $110.3 million, up from $43.0 million. Corporate general and administrative expenses rose to $38.3 million from $28.9 million. Those costs come out of segment profit before adjusted OIBDA.
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Why it matters
OptimistFi has argued that Lionsgate Studios is a leveraged content bet. It works if the library keeps selling and the studio turns that demand into repeatable operating cash flow. This quarter supports the first half of that view. Trailing 12-month library revenue was $1.04 billion, the studio's second highest ever. Filmed entertainment backlog, which is contractual future revenue not yet recognized, was $1.5 billion.
The profit rise also rests on named items. The company ties the Motion Picture gain to Michael as well as the library. It ties the television gain to scripted deliveries it expects to double this fiscal year. Those are specific titles and delivery schedules, not library sales alone.
Cash flow and leverage
Cash generation improved but did not turn positive for the quarter. Operating cash flow from continuing operations was an outflow of $52.7 million, compared with an outflow of $104.1 million a year earlier. Over six months it was a $1.4 million inflow, versus an outflow of $213.1 million in the same period of 2025.
Adjusted free cash flow was an outflow of $8.2 million for the quarter, against an outflow of $128.8 million a year earlier. This measure adds net borrowing on production loans, so it is not the same as cash earned from operations.
Leverage improved by 0.6x from the June quarter to 3.7x. The company credits growth in trailing 12-month adjusted OIBDA. Noncurrent debt was $1.69 billion at Sept. 30, down from $1.78 billion at March 31. Current film related obligations rose to $1.61 billion from $1.29 billion.
What's next
CEO Jon Feltheimer said the quarter reaffirms confidence in this year's forecast of adjusted OIBDA growth. He said it also gives the company growing visibility into growth in fiscals 2028 and 2029. Management was set to discuss the results on a call at 5:00 p.m. ET on Nov. 5. The quarterly report on Form 10-Q for the period ended Sept. 30 will carry the full financial statements.
The next test is the fiscal 2027 third-quarter report. Three things would strengthen the case: adjusted OIBDA holding above the year-earlier level, operating cash flow from continuing operations turning positive for the quarter, and leverage falling below 3.7x. A slide back toward operating losses or a rise in leverage would weaken it.
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Sources
- Lionsgate Studios Corp. second quarter fiscal 2027 earnings release (SEC 8-K, Exhibit 99.1) — Press release dated Nov. 5, 2026 covering the quarter ended Sept. 30, 2026, with financial statements, segment results and non-GAAP reconciliations.
- SEC filing
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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.