Lionsgate: Record revenue from TV, film library
February 10, 2023
Lionsgate has reported Q3 (quarter ended December 31st 2022) revenue of $1 billion (€0.93bn), operating income of $7.8 million and net income attributable to Lionsgate shareholders of $16.6 million.
“We reported a strong financial quarter with record trailing 12-month library revenues affirming the value of our intellectual properties,” said Lionsgate CEO Jon Feltheimer. “We enter our fourth quarter with encouraging signs across all of our businesses: a rebounding domestic box office just as we bring our biggest slate in years to theatres; renewals of six key Lionsgate Television series during or immediately after the close of the quarter; and improved Starz economics due to its international reorganisation.”
Revenue from Lionsgate’s 17,000-title film and television library rose to a record $845 million for the trailing 12 months. Lionsgate ended the quarter with $425 million in available cash and an undrawn revolving credit facility of $1.25 billion. During the quarter, the Company purchased $124 million of its bonds for $82 million, a $42 million reduction in its net debt. In addition, during the quarter the Company sold a partial interest in Starzplay Arabia and recognised a $43 million cash gain.
Segment Results
Media Networks segment revenue was at $380.3 million compared to $388.9 million in the prior year quarter. Segment revenue reflected growth in domestic streaming revenue and Lionsgate+ (previously Starzplay International) revenue partially offset by lower domestic linear revenue. Segment profit increased to $49.5 million compared to segment profit of $28.5 million in the prior year quarter, driven by lower domestic marketing costs and an improved international cost structure. Total global subscribers, including Starzplay Arabia (a non-consolidated equity method investee), decreased sequentially to 37.2 million, driven by linear and OTT pressures domestically. Excluding the international subscribers in the seven markets that Lionsgate+ is exiting, total global subscribers were up 2.9 per cent year-over-year but down sequentially to 28.7 million.
During the quarter, as part of Lionsgate’s global assessment and curation of its Media Networks cost structure and content strategy, the company recognised an $80.8 million restructuring charge primarily associated with its Domestic Media Networks’ decision to remove certain series from its service.
The Studio Business, comprised of the Motion Picture and Television Production segments, reported revenue of $894.2 million, an increase of 25 per cent from $713.9 million in the prior year quarter. Segment profit of $148 million increased by 71 per cent from $86.8 million in the prior year quarter. The year-over-year increase in revenue and segment profit was driven primarily by strong library sales and the timing of scripted content deliveries.
Motion Picture segment revenue increased by 5 per cent to $288.8 million compared to $275.3 million in the prior year quarter. Segment profit increased by 13 per cent to $76.5 million compared to $67.5 million in the prior year quarter. Motion Picture revenue and segment profit growth represented strength in multi-platform and direct-to-platform businesses, and segment profit growth also reflected favourable foreign exchange rates.
Television Production segment revenue increased by 38 per cent to $605.4 million compared to $438.6 million in the prior year quarter. Segment profit increased by 270 per cent to $71.5 million compared to $19.3 million in the prior year quarter. The revenue and segment profit increases were driven by growth in content deliveries to Media Networks and third parties as well as strength in library sales.