Lionsgate released its latest financial results on Thursday with sharply higher overall revenues and a narrowed loss in a first quarter lifted by Antoine Fuqua’s Michael global box office.
The studio, led by CEO Jon Feltheimer, posted a first quarter net loss attributable to shareholders at $28.8 million, compared to a year-earlier $109 million loss, on overall revenue rising 48 percent to $776.6 million, against a year-earlier $526 million.
That revenue line blew past a Wall Street forecast for $693.1 million in overall revenue. The Michael Jackson biopic has to date brought in $1.013 billion in global box office after the studio tapped Universal to handle the Antoine Fuqua’s movie overseas.
The Michael and Hunger Games studio became a standalone company after splitting from the Starz premium cable and streaming service. Lionsgate also saw its adjusted OIBDA come to $79.3 million, beating an analyst forecast for $65.5 million.
During the latest quarter, the company’s studios business saw its motion picture revenue jump to $587.3 million, against a year-earlier $267.3 million, with box office from Michael and strong ancillary business with The Housemaid providing a lift. Michael becoming the highest-grossing biopic of all time and highest-grossing Lionsgate title ever worldwide helped drive the Lionsgate Motion Picture Group segment profit to $105 million, the best first quarter ever for the studio.
Adam Fogelson, chair of Lionsgate’s Motion Picture Group, on an after-market analyst call discussed the timing for a Michael Part 2 production and release. “While we are not ready to announce everything at the moment, I would tell you that we are targeting a production start towards the end of this year and early next, and think that somewhere between the end of calendar 27 and the first half of calendar 28 would be a current thought of roughly where the movie could go,” he said.
Fogelson said some dance sequences earlier shot will make it into the second Michael film, “but we are mostly focused right now on how to make sure we can deliver at the right price the biggest, best sequel.”
The film group performance helped offset television production revenue dropping to $189.3 million during the first quarter, against a year-earlier $288.5 million, due to the timing of episodic deliveries. The studio is projecting full-year 2027 TV revenue and profits to grow on a near doubling of scripted series deliveries, compared to the prior year, and the recent licensing of four Power series to Netflix.
“I’m pleased to report another quarter of strong financial results and growing momentum across our business,” Lionsgate CEO Jon Feltheimer said in a statement that accompanied his first quarter results. “As we continue to execute our franchise strategy across a deep portfolio of branded intellectual properties, generate increased visibility and stability from our film and television library, and benefit from continued improvement in our operating environment, we are positioned to deliver strong growth in fiscal 2027 and beyond.”
During an after-market analyst call, Feltheimer focused on Lionsgate’s deep bench strength in movie titles, especially with sequels and revivals. The stuidio has upcoming releases for The Hunger Games: Sunrise on the Reaping, the latest in the Hunger Games franchise; Mel Gibson’s epic, two-part Resurrection of the Christ to premiere in September; John Rambo, directed by Jalmari Helander and starring Noah Centineo as the studio aims for a film and TV franchise potential as it brings back the classic Rambo property; and Lionsgate have just completed production on Caine, with Donnie Yen directing and starring in a movie that expands the John Wick universe.
On the roll-out of The Hunger Games: Sunrise on the Reaping in the studio’s third quarter financial period, Fogelson said the latest franchise release, with its strong cast and in-built audience, “is one of the best testing movies that we’ve ever had at the studio. So we think we have all of the tools necessary to deliver an incredible result.”
Given the current Hollywood box office rebound, Feltheimer predicted domestic multiplex ticket sales was “heading for its first $10 billion year since before the pandemic.”
On the TV side, Feltheimer said an evolving strategy was casting a wide net for buyers as new ones emerge in an increasingly disrupted industry landscape. “The name of the game in TV used to be deep relationships with a handful of major buyers: first the broadcast networks, then the leading cable platforms and more recently the streamers. But today there are many new players throughout the television ecosystem, and our strategy is focused on diversification: having the creative strengths, pricing flexibility and innovative business models to play across a wide range of different platforms and different types of series in an increasingly fragmented world,” he told analysts in prepared remarks.
In the search for new buyers, Lionsgate landed Amazon to acquire Friends co-creator Marta Kauffman’s improvisational comedy DINKS via a partnership with media giant Publicis Groupe, and has a pickup of the medical action thriller Trauma by Prime Video in the U.K. and Paramount+ in the U.S. and the rest of the world.
The sale of Trauma to Paramount+ also comes as Lionsgate has managed to sell a series to a Hollywood studio in Paramount in limbo until it looks to close its megadeal with Warner Bros. Discovery with hurdles standing in its way. “Uncertainty is the worst thing for our business, and uncertainty and delay is not good for anybody,” Feltheimer argued, as his studio still looks ahead to a merged Paramount-WBD entity to possibly jointly invest in premium content and do a possible movie slate deal together.
“That would be good for us and that would be good for the industry. And I would say, overall, the more movies that are in the marketplace, while it’s competitive, it’s good as you know the rising tide moves all boats up,” Feltheimer added.
Michael Burns, Lionsgate vice-chairman, discussed possible mergers and acquisition activity amid industry consolidation. “In spite of what the headline suggests, we haven’t engaged in any substantive conversations. What I will say is this gives us strength and the breadth of our IP and our franchises, and we remain one of the most compelling assets in a rapidly consolidating marketplace,” he added as Lionsgate as a standalone studio after having separated from Starz now has “strategic optionality” for possible dealmaking.
Feltheimer also talked about the introduction of artificial intelligence tools across the studio. “There are just some tremendous use cases right now that we’re playing with, and a year from now it’s going to be a whole different world there. But I can tell you, it’s saving us money now. It’s making us more efficient across the board,” he argued.
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