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$LGF Lionsgate Earnings Analysis: Strong performance in the library revenue.

By sagebytes in Lifestyle —

Business Model

Lionsgate generates revenue through its Studio Business (Motion Picture and Television Production) and Media Networks (STARZ). The Studio Business produces and distributes films and television content, while Media Networks generates revenue through subscriptions and licensing.

Revenue Sources

  • Motion Picture: Theatrical releases, home entertainment, and television distribution.
  • Television Production: Production and worldwide distribution of television series, movies, and non-fiction programming.
  • Media Networks (STARZ): Subscription revenue from OTT platforms and MVPDs.
  • Library Revenue: Licensing existing film and television content.

Income Statement Analysis

  • Revenue decreased slightly by 0.47% year-over-year.
  • Operating income improved significantly from a loss of $43.5 million to a profit of $35.8 million.
  • Net loss attributable to Lions Gate Entertainment Corp. shareholders decreased substantially from $106.6 million to $21.9 million.

Balance Sheet Analysis

  • Cash and cash equivalents decreased significantly by 36.18%.
  • Total assets increased slightly by 1.05%.
  • Total liabilities increased slightly by 0.60%.
  • Total shareholders' equity deficit improved significantly, decreasing from -$312.7 million to -$171.8 million, indicating a stronger financial position.

Cash Flow Analysis

  • Operating cash flow decreased significantly year-over-year.
  • Investing activities used less cash compared to the previous year.
  • Financing activities provided significantly less cash compared to the previous year.
  • Cash and cash equivalents at the end of the period decreased year-over-year.

Capital Allocation

Lionsgate is focused on reinvesting in content, managing debt, and returning value to shareholders. They have secured financing for the studio and STARZ separation, which will provide flexibility for future investments.

Management Commentary

I'm pleased to report a solid quarter in which our businesses performed well in a challenging environment.

Our Motion Picture business is back on track, converting our last three mid budget films to significant profitability with solid box office performance, strong business models and steady execution.

STARZ returning to domestic OTT subscriber growth on a sequential basis and continued to expand its distribution footprint with key partner renewals and new bundling deals.

The TV market remains the original content market scripted and unscripted under some pressure.

Overall Sentiment: Positive with cautious optimism due to market challenges, but confident in the company's strategy and execution.

Recommendation

Rating: Hold

Reason for Rating: The company shows potential for growth in specific areas but faces ongoing challenges in certain segments.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.

Generated on: 2/7/2025, 1:39:59 PM