LION earnings call transcript, November 5, 2026

Thank you for joining us for the Lionsgate Studios.

on CBS and our recent licensing deal with Netflix is indicative of the kind of value we're creating for the Power franchise ten years after the original Power series launched. As you may have seen Netflix announced the third season renewal of The Hunting Wives even before its second season launched. The Hunting Wives was a breakout hit on the platform in its first season, topping their global charts and attracting 35 million viewers worldwide. Its second season will debut on Thanksgiving Day, and we will begin shooting the third season at our Lionsgate studio sound stages in Atlanta next month. Second, we're continuing to extend... ...and our franchises into new growth areas. We launch the North American tour of the Dirty Dancing musical to rave reviews in August, and as it heads for Broadway in February 2027, ticket sales are outpacing expectations. We announce the full creative team for the La La Land stage musical and... ...begin workshopping it early next year for a 2028 opening. We opened Now You See Me Live at the MGM Grand in Las Vegas to sold-out shows last month, and we'll be opening a limited run on Broadway next Friday. And earlier this week, we announced the expansion of one of our newest franchises, The Housemaid... ...to a stage play shepherded by Tony Award-winning Life of Pi producer Simon Friend that will open in the UK next September. We're also working on the Saw Genesis multiplayer video game, launching in 2027, and the John Wick AAA game in partnership with leading developer Sabre.

All told... By the end of fiscal 2028, we expect to have at least eight stage plays, four concert tours, ten live experiences, and nine interactive video games across our global products and experiences group. Third, we're continuing to grow our verticals in categories where we have historically... ...excelled. During the quarter, we began principal photography on an exciting new chapter of the found-footage horror classic, Blair Witch. We announced Mike P. Nelson to direct the next installment of our billion-dollar horror franchise, Saw, in partnership with Blumhouse Atomic. Our adaptation of the horror thriller, Magic... produced and directed by Spider-Man and Evil Dead filmmaker Sam Raimi, and our recent acquisition of Portrait of God, starring Chase Infinity, with Jordan Peele and Sam Raimi producing, round out our strongest lineup of horror films since the early days of the studio. Contributing to this strength... Our Three Arts Talent Management Company is a leader in representing the top voices of the next generation of horror, with clients Dylan Clark, who is directing both Blair Witch and Portrait of God, Back Rooms director Kane Parsons, and Undertone director Ian Tuasun. You'll be hearing more about what Three Arts... ...is doing in the horror space soon. We're also continuing our focus on the action space, wrapping production on the John Rambo prequel starring Noah Centineo, and the next installment of the John Wick universe, Kane, directed by and starring Donnie Yen. Both films have had strong early test scores.

screenings, and we've begun pre-production on the John Wick animated prequel, returning Keanu Reeves to his iconic role. Fourth, we're continuing to monetize our library in new ways as we scale our licensing business across a changing portfolio of buyers. We've rolled out more than 50 global fast channels on track for a billion hours of viewership by the end of the fiscal year. We have SVOD add-on channels in 36 territories, approaching the 2 million subscriber mark. Together, they comprise a global channels business that has tripled its annual revenue to well over $100 million. in the past two years, giving us greater control over where and how we license our content. Our channels have become one of the drivers of our library's continued growth, and in that regard, we reported our second-best trailing 12-month library revenue ever this quarter, returning to over $1 billion. with approximately 60% cash flow margins. The growth of our library is coming from many different places. Drivers in the quarter included the Hunger Game franchise, as you might expect, but also Heartland, a Canadian family drama TV series that has been on the air for nearly 20 years, and Kill Bill, The Whole Blood. The Affair from legendary filmmaker Quentin Tarantino. Fifth, we're finding new ways to monetize our content with new partners outside of our traditional media ecosystem. In September, we announced a joint partnership with Meta to support the launch of their new Meta VR glasses with a number of

our films. And earlier this week, we announced that we're again working with Meta to convert one of these films, The Hunger Games' Sunrise on the Reaping, for 3D theatrical release before becoming available on their glasses. And we're continuing to discuss with them additional content opportunities at the intersection of entertainment. and technology. Finally, the key to every element of our plan is our ability to replenish our content platform by sourcing, packaging, producing, and delivering exciting new IP that adds value to our portfolio. We announced earlier this week that after highly competitive bidding, Sony Pictures has come aboard as our international partner and co-financier on Naruto, the film adaptation of Kishimoto's iconic manga, one of the most beloved and successful entertainment properties in the world. Sony brings deep expertise in anime and tremendous strength in international distribution. to the film, which is helmed by Destin Daniel Cretton, the director of the biggest domestic box office hit of all time, Spider-Man, A Brand New Day. Naruto begins production in the spring. In closing, we're performing well against the backdrop of an operating environment that is showing a number. of encouraging signs. Audiences are coming back to the movie theaters. Scripted TV series orders are stabilizing with new creative and financial partners emerging across the media ecosystem. The close of the Skydance acquisition of Warner Discovery eliminates a layer of uncertainty that was hanging over.

the industry. And we bring to this environment not only strong content slates, a world-class library and a deep portfolio of branded IP, but a focus on monetizing it across a broader range of platforms than ever before. Now I'd like to turn things over to Jimmy. Thanks.

Including deliveries for the Hunting Wives, Power Origins, and the Studio, compared to seven episodic deliveries in the prior year quarter. Now turning to the balance sheet. We ended the quarter with net debt of approximately $1.5 billion. Leverage improved over a half turn. From 4.3 times to 3.7 times, driven by continued growth in trailing 12-month adjusted OEBIDA. We ended the quarter with $359 million of cash and $800 million of available capacity on our revolver. Our capital structure remains. It remains well positioned with no near-term corporate debt maturities. Additionally, last week, we announced that SP Media made an investment into the new joint venture that includes Lionsgate's interest in three yards. The proceeds from this investment will be reflected in our December quarter balance sheet. And we anticipate that it will primarily be used to help satisfy our put obligation in January of 2027. We remain ever more confident in our fiscal 2027 outlook. Our performance in the first half, combined with a highly compelling upcoming theatrical slate, and expectation for both an increase in TV deliveries and continued strength in library performance, supports our visibility into significant growth in adjusted OEBIDI and free cash flow for the full year and beyond. Now I'd like to turn the call over to Neelay for Q&A.

Today's first question comes from Vikram Kesvabota with Baird. Please go ahead.

Please go ahead.

Please go ahead.

Thanks. We are hard at work on breaking the story and on making sure that we've got the creative team fully in place, and hope that we'll be able to announce timing, both in terms of start a productive lease date in the not-too-diss. It's in future, but it's lining up to be incredibly exciting. We're making real progress. Okay, that's helpful. Thank you. And then maybe one for Jimmy. On the adjusted operating profit, any comments you can share in terms of what the second half could look like this year, and more specifically, just what the biggest drivers are that'll contribute? To the second half and your level of visibility into those components right now? Sure, Vikram. Look, if you're looking at the second half, right, we've got a third quarter, obviously, I think it's our peak quarter for the year in the context of absolute terms, right, with power Netflix deal coming through. licensing, you know, you see part of that in the backlog now, which will flow into third quarter earnings. Remember, when we get to Q4, though, we're lapping a really big, really big fourth quarter in fiscal 26, where that year was heavily back in loaded. So, and we're going to have two theatrical releases, Kuroshi as well as Day Drinker. Day Drinker's coming out March 26th. So, you're going to have the P&A spin associated with two films, one in the very last few days of the fourth quarter. In addition, we have Resurrection coming up May 7th in fiscal 28. We're all super excited about all of those.

There's going to be some pre-spend in the fourth quarter on Resurrection, which will be following the first quarter of 28. Great visibility. That's the cadence of the rest of the year. Again, with the backlog and everything else that we can see coming through with that visibility, it gives us great confidence. And finishing the year strong, like we said, significant growth in 27, as well as carrying that growth well into 28 to 29. Okay, that's very helpful.