Lionsgate narrows quarterly loss as "Michael" and a fuller TV slate drive 41% revenue jump

Lionsgate Studios Corp. reported Thursday that revenue for its fiscal second quarter rose 41 percent to $668.8 million, and that its net loss from continuing operations narrowed sharply, as the theatrical run of the Michael Jackson biopic "Michael" and a larger slate of scripted television deliveries lifted the studio's two main businesses. The results, filed with the Securities and Exchange Commission, cover the three months ended September 30, 2026, and were released after markets closed, ahead of a call with analysts and investors that evening, as the company had announced in mid-October.

The numbers

Operating income was $29.1 million, compared with a $46 million operating loss in the same quarter a year earlier. Adjusted operating income before depreciation and amortization, the metric Lionsgate emphasizes to investors, climbed to $72 million from $14.1 million. The net loss from continuing operations attributable to shareholders was $15.5 million, or 5 cents a diluted share, down from a $111.9 million loss, or 39 cents a share, a year ago. On an adjusted basis the company posted net income of $20.3 million, or 7 cents a share.

By segment, motion-picture revenue rose 30 percent to $359.3 million and segment profit nearly tripled to $88.7 million, a gain the company attributed to the continued box-office run of "Michael" and to its film library. Television production revenue rose 56 percent to $309.5 million, with segment profit up 73 percent to $21.6 million, which Lionsgate tied to a heavier schedule of scripted episodic deliveries, including the Starz drama "Power: Origins" and second seasons of "The Studio" and "The Hunting Wives." Trailing-twelve-month library revenue reached $1.04 billion, the studio's second-highest total on record, and its backlog of contracted, not-yet-recognized revenue stood at $1.5 billion. These figures were independently reported by the financial news site StockTitan.

The results came with caveats that a studio built on debt still has to manage. Operating cash flow from continuing operations was still negative, an outflow of $52.7 million, narrowed from a $104.1 million outflow a year earlier, and the company's leverage ratio, net debt measured against trailing adjusted earnings, stood at 3.7 times, improved from the prior quarter but still elevated. Lionsgate reported a shareholders' deficit of roughly $1.24 billion and total debt near $1.86 billion against $358.5 million in cash.

Context: a studio on its own

Lionsgate has operated as a standalone, publicly traded studio only since May 2025, when it completed the separation of its premium cable network Starz into an independent company trading under the ticker STRZ. Lionsgate itself began trading on the New York Stock Exchange under "LION," without the dual-class share structure the combined company had used for years. The split left Lionsgate as a pure film-and-television studio carrying a heavy debt load built up over a decade of financing theatrical slates and the Starz business, and its leverage and free cash flow have been the main questions for analysts in every quarterly report since. The quarter reported Thursday was the company's second as a fully independent studio to show positive operating income, after a first fiscal quarter in which revenue rose 48 percent to $776.6 million, per the company's own first-quarter release.

"Michael," a biographical film about the singer Michael Jackson, has been the central driver of that film-segment turnaround since its release earlier this year, becoming Lionsgate's highest-grossing film. Its continued contribution to library and theatrical revenue is explicitly cited in the company's earnings release as the reason for the motion-picture segment's profit gain this quarter.

Who is affected

The results matter most immediately to Lionsgate shareholders, whose stock has traded in the low teens for much of the year, and to the lenders whose covenants are tied to the company's leverage ratio. They also matter to the roughly 2,000 people Lionsgate employs across its film and television operations, where management said it expects scripted television deliveries to roughly double in fiscal 2027 compared with the prior year, implying a heavier production schedule for writers, crews and postproduction staff over the coming months. Starz, now a fully separate company, is unaffected directly, since its results are no longer consolidated with Lionsgate's; the earnings release treats the old pay-TV business strictly as discontinued operations for comparison purposes.

Reaction

Lionsgate chief executive Jon Feltheimer framed the quarter as validation of the company's post-spinoff strategy. "Our strong performance in the quarter reflects all of the pieces of our fiscal 2027 plan coming together," he said in the earnings release, adding that the company has "growing visibility into our continued growth trajectory in fiscals 2028 and 2029."

"Our strong performance in the quarter reflects all of the pieces of our fiscal 2027 plan coming together."

Lionsgate shares closed at $12.56 the day of the report, giving the company a market capitalization of roughly $3.74 billion, according to StockTitan's summary of the filing.

What's next

Lionsgate reaffirmed guidance for "significant" growth in adjusted operating earnings for the current fiscal year, without giving a specific numerical target, and said television deliveries are set to roughly double year over year as renewed series move into production. The next major theatrical test for the studio's film segment arrives November 20, when Lionsgate releases "The Hunger Games: Sunrise on the Reaping," a prequel to its highest-grossing franchise, in North American theaters, according to a release-date tracker maintained by What to Watch. That film's performance, together with the next installment of the "Power" television franchise and continued library licensing, will weigh heavily on whether Lionsgate can keep reducing leverage while still describing itself, as Feltheimer did Thursday, as a studio with visibility into growth two and three years out.