Lionsgate Revenue Rises 41% as Studio Swings to Operating Profit

Lionsgate Studios Corp. (LION ) reported its fiscal second-quarter results on November 5, 2026, posting revenue of $668.8 million for the three months ended September 30, 2026, up 41% from $475.1 million a year earlier. The studio returned to operating income of $29.1 million, compared with an operating loss of $46.0 million in the prior-year quarter.

Net loss from continuing operations attributable to shareholders narrowed to $15.5 million, or $0.05 per diluted share, from $111.9 million, or $0.39. Lionsgate’s adjusted OIBDA rose to $72.0 million from $14.1 million; the non-GAAP measure adjusts operating income for adjusted depreciation and amortization, share-based compensation, restructuring and other specified items.

Film and Television Drive Growth

Motion Picture revenue increased 30% to $359.3 million from $276.4 million, while segment profit rose to $88.7 million from $30.5 million. Lionsgate attributed the improvement to the ongoing contribution of Michael and continued library strength and described trailing 12-month library revenue of $1.04 billion as the studio’s second-highest level ever.

Television Production revenue increased 56% to $309.5 million from $198.7 million, and segment profit rose 73% to $21.6 million from $12.5 million. The company credited a significant increase in scripted episodic deliveries, including Power: Origins and the second seasons of The Studio and The Hunting Wives, and projected that fiscal 2027 scripted deliveries would double the fiscal 2026 total.

Interest and Content Spending Limit Cash Generation

Interest expense declined to $57.8 million from $67.3 million, but it still exceeded operating income. That gap helps explain why stronger operating performance did not eliminate the net loss. The reported figures also separate operating progress from cash generation: continuing operations used $52.7 million of operating cash, although that was an improvement from $104.1 million used a year earlier.

The cash-flow statement included a $270.5 million net investment in films and television programs, partly offset by $91.9 million provided by accounts-receivable changes. Adjusted free cash flow was negative $8.2 million, compared with negative $128.8 million in the prior-year quarter. Lionsgate defines that measure as continuing operating cash flow less capital expenditures, adjusted for production and related loans and certain unusual or non-recurring items.

Lower Leverage and Contracted Future Revenue

Leverage improved by 0.6x from the June 2026 quarter to 3.7x. The company’s trending schedules show trailing 12-month adjusted OIBDA increasing to $402 million at quarter end from $344 million three months earlier, while net corporate debt rose to $1.499 billion from $1.482 billion. Because the ratio divides net corporate debt by trailing adjusted OIBDA, the improvement came from adjusted OIBDA growth rather than debt reduction; corporate debt excludes film-related obligations.

Filmed entertainment backlog stood at $1.5 billion, representing contractual future revenue not yet recognized. The schedules define backlog as fixed-fee or minimum-guarantee contracts under which revenue will be recognized and cash received in the future, excluding estimates of sales- or usage-based royalties. That offers visibility beyond the reported quarter, but it does not remove the timing demands of content investment.

CEO Jon Feltheimer said the quarter reflected “all of the pieces of our fiscal 2027 plan coming together,” reaffirmed management’s forecast of significant adjusted OIBDA growth for fiscal 2027 and cited growing visibility into fiscal 2028 and 2029 as Lionsgate puts film tentpoles in place for the next three years.

The quarter shows operating momentum across both businesses and a lower leverage ratio, alongside a remaining net loss and negative adjusted free cash flow. The central question for subsequent results is whether increased television deliveries and the contracted backlog can convert that momentum into sustained cash generation while interest expense remains above operating income.