Lionsgate Studios Corp.: Form 10-Q for the period ended Dec 31, 2025
Filed with the SEC on Feb 5, 2026 and accepted by EDGAR at Feb 5, 2026, 16:29 ET.
Management's discussion and analysis
As filed, 125,315 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Overview
Lionsgate Studios Corp. (NYSE: LION) (the “Company,” “Lionsgate,” “New Lionsgate,” “we,” “us” or “our”) is one of the world’s leading standalone, pure play content companies. It brings together diversified motion picture and television production and distribution businesses, a world-class portfolio of valuable brands and franchises, a talent management and production powerhouse and a more than 20,000-title film and television library, all driven by Lionsgate’s bold and entrepreneurial culture.
Prior to the Starz Separation, as further discussed below, Lions Gate Entertainment Corp. (formerly listed on the New York Stock Exchange (“NYSE”): LGF.A, LGF.B) (“Old Lionsgate”) encompassed the motion picture and television studio operations (formerly referred to as the “Studio Business”) and the STARZ premium global subscription platform. Following the Studio Separation, as discussed in Note 3 to our unaudited condensed consolidated financial statements, Lionsgate Studios Corp. (formerly listed on the NASDAQ Global Select Market (“NASDAQ”): LION) (“Legacy Lionsgate Studios”) comprises the Studio Business and the STARZ business remained with Lions Gate Entertainment Corp.
We classify our continuing operations through two reportable segments: Motion Picture and Television Production (see further discussion below).
Starz Separation
On May 6, 2025, through a series of transactions contemplated by a certain arrangement agreement, dated as of January 29, 2025, as amended by an amending agreement, dated as of March 12, 2025 (collectively, the “Arrangement Agreement”), the separation of the businesses of Legacy Lionsgate Studios, of which Old Lionsgate owned approximately 87.8%, and the Starz Business (the “Starz Separation”) was completed. As a result of the Arrangement Agreement, the pre-transaction shareholders of Old Lionsgate own shares in two separately traded public companies: (1) New Lionsgate, which was renamed “Lionsgate Studios Corp.” and holds, directly and through subsidiaries, the Studio Business previously held by Old Lionsgate, and is owned by Old Lionsgate shareholders and Legacy Lionsgate Studios shareholders, and (2) Old Lionsgate, which was renamed “Starz Entertainment Corp.” and holds, directly and through subsidiaries, the Starz Business that was previously held by Old Lionsgate (see Note 2 to our unaudited condensed consolidated financial statements).
Notwithstanding the legal form of the Starz Separation, for accounting and financial reporting purposes, in accordance with United States generally accepted accounting principles (“U.S. GAAP”), due to the relative significance of the Studio Business as compared to the Starz Business and the continued involvement of Old Lionsgate’s senior management with the Company following the completion of the Starz Separation, Old Lionsgate is considered the accounting spinnor or divesting entity and Starz is considered the accounting spinnee or divested entity. As a result, Old Lionsgate is the accounting predecessor to the Company, and the pro rata distribution of the Starz Business has been recorded through equity with no gain or loss recorded. The Starz Business is reflected as discontinued operations in the financial statements following the completion of the Starz Separation. See Note 2 to our unaudited condensed consolidated financial statements for further information.
See also “Liquidity and Capital Resources” for discussion of the Starz Separation financing transaction.
Business Combination
On May 13, 2024, Old Lionsgate consummated the business combination agreement (the “Business Combination Agreement”) with Screaming Eagle Acquisition Corp., a Cayman Islands exempted company (“SEAC”), SEAC II Corp., a Cayman Islands exempted company and a wholly-owned subsidiary of SEAC (“New SEAC”), LG Sirius Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of Old Lionsgate (“Studio HoldCo”), LG Orion Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of Old Lionsgate (“StudioCo”) and other affiliates of SEAC (the “Closing”). Pursuant to the terms and conditions of the Business Combination Agreement, the Studio Business was combined with SEAC through a series of transactions, including an amalgamation of StudioCo and New SEAC under a Canadian plan of arrangement (the “Business Combination”). In connection with the closing of the Business Combination, New SEAC changed its name to “Lionsgate Studios Corp.” (referred to as “Legacy Lionsgate Studios”) and continued the existing business operations of StudioCo, which consisted of the Studio Business of Old Lionsgate. The “Studio Business” consists of the businesses of Old Lionsgate’s Motion Picture and Television Production segments, together with substantially all of Old Lionsgate’s corporate general and administrative functions and costs. Legacy Lionsgate Studios became a separate publicly-traded company, and its common shares commenced trading on NASDAQ under the symbol “LION” on May 14, 2024.
In connection with and prior to the Business Combination, Old Lionsgate and StudioCo entered into a separation agreement pursuant to which the assets and liabilities of the Studio Business were transferred to StudioCo such that StudioCo held, directly or indirectly, all of the assets and liabilities of the Studio Business (the “Studio Separation”).
Immediately following the Business Combination through immediately prior to the Starz Separation, approximately 87.8% of the total shares of Legacy Lionsgate Studios were held by Old Lionsgate, while 12.2% were owned by former SEAC public shareholders, SEAC founders and common equity financing investors. In addition to establishing Legacy Lionsgate Studios as a standalone publicly-traded entity, the transaction resulted in approximately $330.0 million of gross proceeds to Old Lionsgate. Net proceeds of $278.2 million, inclusive of transaction costs that remained accrued at March 31, 2025 and which were paid during the nine months ended December 31, 2025 totaling $3.5 million, were used to partially pay down amounts outstanding under Old Lionsgate's corporate debt. See Note 7 to our unaudited condensed consolidated financial statements for further detail.
The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, SEAC was treated as the acquired company and the Studio Business was treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of Legacy Lionsgate Studios represented a continuation of the financial statements of the Studio Business, with the Business Combination treated as the equivalent of the Studio Business issuing stock for the historical net assets of SEAC, substantially consisting of cash held in the trust account, accompanied by a recapitalization of the Studio Business equity. The historical net assets of SEAC were stated at fair value, which approximated historical cost, with no goodwill or other intangible assets recorded. Prior to the Starz Separation, the Studio Business was a consolidated subsidiary of Old Lionsgate.
Revenues
Our revenues are derived from the Motion Picture and Television Production segments, as described below. Our revenues are derived from the U.S., Canada, the United Kingdom and other foreign countries. None of the non-U.S. countries individually comprised greater than 10% of total revenues for the three and nine months ended December 31, 2025 and 2024.
Motion Picture: Our Motion Picture segment includes revenues derived from the following:
- Theatrical. Theatrical revenues are derived from the domestic theatrical release of motion pictures licensed to theatrical exhibitors on a picture-by-picture basis (distributed by us directly in the U.S. and through a sub-distributor in Canada). The revenues from Canada are reported net of distribution fees and release expenses of the Canadian sub-distributor. The financial terms that we negotiate with our theatrical exhibitors in the U.S. generally provide that we receive a percentage of the box office results. Theatrical revenues also include revenues from licenses to direct-to-platform customers where the initial license of a motion picture is to a direct-to-platform customer.
- Home Entertainment. Home entertainment revenues are derived from the sale or rental of our film productions and acquired or licensed films and certain television programs (including theatrical and direct-to-video releases) on packaged media and through digital media platforms (including pay-per-view and video-on-demand platforms, electronic sell through, and digital rental). In addition, we have revenue sharing arrangements with certain digital media platforms which generally provide that, in exchange for a nominal or no upfront sales price, we share the rental or sales revenues generated by the platform on a title-by-title basis.
- Television. Television revenues are primarily derived from the licensing of our theatrical productions and acquired films to the linear pay, basic cable and free television markets. In addition, when a license in our traditional pay television window is made to a subscription video-on-demand (“SVOD”) or other digital platform, the revenues are included here.
- International. International revenues are derived from (1) licensing of our productions, acquired films, our catalog product and libraries of acquired titles to international distributors, on a territory-by-territory basis; and (2) the direct distribution of our productions, acquired films, and our catalog product and libraries of acquired titles in the United Kingdom.
- Other. Other revenues are derived from, among others, the licensing of our film and television and related content (games, music, location-based entertainment royalties, etc.) to other ancillary markets.
Television Production: Our Television Production segment includes revenues derived from the following.
- Television. Television revenues are derived from the licensing to domestic markets (linear pay, basic cable, free television and syndication) of scripted and unscripted series, television movies, mini-series and non-fiction programming. Television revenues also include revenue from licenses to SVOD platforms in which the initial license of a television series is to an SVOD platform. Television revenues include fixed fee arrangements as well as arrangements in which we earn advertising revenue from the exploitation of certain content on television networks.
- International. International revenues are derived from the licensing and syndication to international markets of scripted and unscripted series, television movies, mini-series and non-fiction programming.
- Home Entertainment. Home entertainment revenues are derived from the sale or rental of television production movies or series on packaged media and through digital media platforms.
- Other. Other revenues are derived from, among others, the licensing of our television programs to other ancillary markets, the sales and licensing of music from the television broadcasts of our productions, and from commissions and executive producer fees earned related to talent management.
Expenses
Our primary operating expenses include direct operating expenses, distribution and marketing expenses and general and administration expenses.
Direct operating expenses include amortization of film and television production or acquisition costs, participation and residual expenses, provision for doubtful accounts, and foreign exchange gains and losses.
Participation costs represent consideration payable based on the performance of the film or television program to parties associated with the film or television program, including producers, writers, directors and actors. Residuals represent amounts payable to various unions or “guilds” such as the Screen Actors Guild - American Federation of Television and Radio Artists, Directors Guild of America, and Writers Guild of America, based on the performance of the film or television program in certain ancillary markets or based on the individual’s (i.e., actor, director, writer) salary level in the television market.
Distribution and marketing expenses primarily include the costs of theatrical prints and advertising (“P&A”) and premium video-on-demand (“Premium VOD”) expense and of DVD/Blu-ray duplication and marketing. Theatrical P&A includes the costs of the theatrical prints delivered to theatrical exhibitors and the advertising and marketing cost associated with the theatrical release of the picture. Premium VOD expense represents the advertising and marketing cost associated with the Premium VOD release of the picture.
General and administration expenses include salaries and other overhead costs. Corporate general and administrative expenses include certain corporate executive expenses (such as salaries and wages for the office of the Chief Executive Officer, Chief Financial Officer, General Counsel and other corporate officers), investor relations costs, costs of maintaining corporate facilities, and other unallocated common administrative support functions, including corporate accounting, finance and financial reporting, internal and external audit and tax costs, corporate and other legal support functions, and certain information technology and human resources expense. Corporate general and administrative expenses also include costs that were previously incurred in support of the Media Networks segment but are not directly attributable to it and thus were not recorded in discontinued operations, see Note 2 to our unaudited condensed consolidated financial statements for further information.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our financial statements in conformity with accounting principles generally accepted in the U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. As described more fully below, these estimates bear the risk of change due to the inherent uncertainty of the estimate. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 1 to the audited consolidated financial statements and related notes included as Exhibit 99.1 to the Legacy Lionsgate Studios Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on May 30, 2025 (the “Form 10-K”).
Film and Television Costs. Capitalized costs for films or television programs are predominantly monetized individually.
Amortization. Film cost amortization as well as participations and residuals expense are based on management’s estimates. Costs of acquiring and producing films and television programs and of acquired libraries that are amortized and estimated liabilities for participations and residuals costs are accrued using the individual-film-forecast method, based on the ratio of the current period's revenues to management’s estimated remaining total gross revenues to be earned (“ultimate revenue”). Management’s judgment is required in estimating ultimate revenue and the costs to be incurred throughout the life of each film or television program.
Management estimates ultimate revenues based on historical experience with similar titles or the title genre, the general public appeal of the cast, audience test results when available, actual performance (when available) at the box office or in markets currently being exploited, and other factors such as the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, general economic conditions and other tangible and intangible factors, many of which we do not control and which may change.
For motion pictures, ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release of the motion picture. The most sensitive factor affecting our estimate of ultimate revenues for a film intended for theatrical release is the film's theatrical performance, as subsequent revenues from the licensing and sale in other markets have historically been highly correlated to its theatrical performance. After a film is released, our estimates of revenue from succeeding markets are revised based on historical relationships and an analysis of current market trends.
For an episodic television series, the period over which ultimate revenues are estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later. The most sensitive factors affecting our estimate of ultimate revenues for a television series is whether the series will be ordered for a subsequent season and estimates of revenue in secondary markets other than the initial license fee, which may depend on a number of factors, including, among others, the ratings or viewership the program achieves on the customers’ platforms. The initial estimate of ultimate revenue may include estimates of revenues outside of the initial license window (i.e., international, home entertainment and other distribution platforms) and are based on historical experience for similar programs (genre, duration, etc.) and the estimated number of seasons of the series. Ultimates of revenue beyond the initial license fee are generally higher for programs that have been or are expected to be ordered for multiple seasons. We regularly monitor the performance of each season, and evaluate whether impairment indicators are present (i.e., low ratings, cancellations or the series is not reordered), and based upon our review, we revise our estimates as needed and perform an impairment assessment if impairment indicators are present.
For titles included in acquired libraries, ultimate revenue includes estimates over a period not to exceed twenty years following the date of acquisition.
Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates have differed in the past from actual results and are likely to differ to some extent in the future from actual results. In addition, in the normal course of our business, some films and titles are more successful or less successful than anticipated. Management regularly reviews and revises when necessary, its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or a write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value.
An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also periodically results in an impairment requiring a write-down of the film cost to the title’s fair value. These write-downs are included in amortization expense within direct operating expenses in our unaudited condensed consolidated statements of operations. See further discussion under Impairment Assessment below.
Impairment Assessment. An individual film or television program is evaluated for impairment when events or changes in circumstances indicate that the fair value of an individual film or television program is less than its unamortized cost. If the result of the impairment test indicates that the carrying value exceeds the estimated fair value, an impairment charge will then be recorded for the amount of the difference.
Estimate of Fair Value. The fair value is determined based on a discounted cash flow analysis of the cash flows directly attributable to the title. For motion pictures intended for theatrical release, the discounted cash flow analysis used in the impairment evaluation prior to theatrical release is subjective and the key inputs include estimates of future anticipated revenues and estimates of box office performance, which may differ from future actual results. These estimates are based in part on the historical performance of similar films, test audience results when available, information regarding competing film releases, and critic reviews. For television programs, the discounted cash flow analysis used in the impairment evaluation includes key inputs such as estimates of future anticipated revenue, as discussed above. See further discussion of Valuation Assumptions below.
Valuation Assumptions. The discounted cash flow analysis includes cash flows estimates of ultimate revenue and costs as well as a discount rate (a Level 3 fair value measurement, see Note 9 to our unaudited condensed consolidated financial statements). The discount rate utilized in the discounted cash flow analysis is based on the weighted average cost of capital of the Company plus a risk premium representing the risk associated with producing a particular film or television program. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in management’s future revenue estimates.
Revenue Recognition. Our Motion Picture and Television Production segments generate revenue principally from the licensing of content in domestic theatrical exhibition, home entertainment (e.g., digital media), television, and international marketplaces.
Our content licensing arrangements include fixed fee and minimum guarantee arrangements, and sales or usage-based royalties. Our fixed fee or minimum guarantee licensing arrangements in the television, digital media and international markets may, in some cases, include multiple titles, multiple license periods (windows) with a substantive period in between the windows, rights to exploitation in different media, or rights to exploitation in multiple territories, which may be considered distinct performance obligations. When these performance obligations are considered distinct, the fixed fee or minimum guarantee in the arrangement is allocated to the title, window, media right or territory as applicable, based on estimates of relative standalone selling prices. The amounts related to each performance obligation (i.e., title, window, media or territory) are recognized when the content has been delivered, and the window for the exploitation right in that territory has begun, which is the point in time at which the customer is able to begin to use and benefit from the content.
Sales or usage-based royalties represent amounts due to us based on the “sale” or “usage” of our content by the customer, and revenues are recognized at the later of when the subsequent sale or usage occurs, or the performance obligation to which some or all the sales or usage-based royalty has been allocated has been satisfied (or partially satisfied). Generally, when we license completed content (with standalone functionality, such as a movie, or television show), our performance obligation will be satisfied prior to the sale or usage. When we license intellectual property that does not have stand-alone functionality (e.g., brands, themes, logos, etc.), our performance obligation is generally satisfied in the same period as the sale or usage. The actual amounts due to us under these arrangements are generally not reported to us until after the close of the reporting period. We record revenue under these arrangements for the amounts due and not yet reported to us based on estimates of the sales or usage of these customers and pursuant to the terms of the contracts. Such estimates are based on information from our customers, historical experience with similar titles in that market or territory, the performance of the title in other markets and/or available data in the industry. While we believe these estimates are reasonable estimates of the amounts due under these arrangements, such estimated amounts could differ from the actual amounts to be subsequently reported by the customer, which could be higher or lower than our estimates, and could result in an adjustment to revenues in future periods.
Revenue from the theatrical release of feature films is treated as sales or usage-based royalties and recognized starting at the exhibition date and based on our participation in box office receipts of the theatrical exhibitor.
Digital media revenue sharing arrangements are recognized as sales or usage-based royalties.
Revenue from commissions is recognized as such services are provided.
Goodwill. As of December 31, 2025, the carrying value of goodwill was $846.8 million. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (component level). Reporting units are determined by the discrete financial information available for the component and whether that information is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances as of December 31, 2025, were Motion Picture (goodwill of $396.9 million) and our Television (goodwill of $318.9 million) and Talent Management (goodwill of $131.0 million) businesses, both of which are part of our Television Production segment.
Goodwill is not amortized but is reviewed for impairment each fiscal year or between the annual tests if an event occurs or circumstances change that indicates it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. We perform our annual impairment test as of January 1 in each fiscal year. A goodwill impairment loss would be recognized for the amount that the carrying amount of a reporting unit exceeds its fair value. An entity may perform a qualitative assessment of the likelihood of the existence of a goodwill impairment. The qualitative assessment is an evaluation, based on all identified events and circumstances which impact the fair value of the reporting unit of whether or not it is more-likely-than-not that the fair value is less than the carrying value of the reporting unit. If we believe that as a result of our qualitative assessment it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, a quantitative impairment test is not required but may be performed at the option of the Company. A quantitative assessment requires determining the fair value of our reporting units. The determination of fair value requires considerable judgment and requires assumptions and estimates of many factors, including revenue and market growth, operating margins and cash flows, market multiples and discount rates.
In performing a quantitative assessment of goodwill, we determine the fair value of our reporting units by using a combination of discounted cash flow (“DCF”) analyses and market-based valuation methodologies. The models rely on significant judgments and assumptions surrounding general market and economic conditions, short-term and long-term growth rates, discount rates, income tax rates, and detailed management forecasts of future cash flow and operating margin projections, and other assumptions, all of which are based on our internal forecasts of future performance as well as historical trends. The market-based valuation method utilizes EBITDA multiples from guideline public companies operating in similar industries and a control premium. The results of these valuation methodologies are weighted as to their relative importance and a single fair value is determined. The fair value of our reporting units is reconciled to the market value of our equity, determined based on the average prices of our common shares just prior to the valuation date. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual or interim goodwill impairment tests will prove to be an accurate prediction of the future.
Goodwill Impairment Assessments:
During the three and nine months ended December 31, 2025, no events or circumstances occurred that would indicate it is more-likely-than not that the fair value of any reporting unit is less than its carrying value. Accordingly, an impairment test was not required during the current reporting period.
Fiscal 2025. For our annual goodwill impairment test for fiscal 2025, given the length of time since our last quantitative assessment and considering the separation of the Studio Business from the Starz Business, we performed quantitative goodwill impairment assessments for all of our reporting units (Motion Picture, and our Television and Talent Management businesses, both of which are part of our Television Production segment), based on the most recent data and expected growth trends, using a combination of DCF analyses and market-based valuation methodologies to estimate the fair value of the Company’s reporting units. The DCF analysis components of the fair value estimates were determined primarily by discounting estimated future cash flows, which included weighted average perpetual nominal growth rates ranging from 2.0% to 3.5%, at a weighted average cost of capital (discount rate) ranging from 8.5% to 10.0%, which considered the risk of achieving the projected cash flows, including the risk applicable to the reporting unit, industry and market as a whole. Based on our quantitative impairment assessment, the Company determined that the fair value of our reporting units significantly exceeded the carrying values for all of our reporting units.
Management will continue to monitor all of its reporting units for further changes in the business environment that could impact the recoverability in future periods. The recoverability of goodwill is dependent upon the continued growth of revenue and cash flows from our business activities. Examples of events or circumstances that could result in changes to the underlying key assumptions and judgments used in our goodwill impairment tests, and ultimately impact the estimated fair value of our reporting units may include the global economy; consumer consumption levels of our content; adverse macroeconomic conditions related to higher inflation and interest rates and currency rate fluctuations, and the impact on the global economy from wars, terrorism and multiple international conflicts, and future bank failures; volatility in the equity and debt markets which could result in higher weighted-average cost of capital; capital market transactions; the duration and potential impact of union strikes on our ability to produce, acquire and distribute our content; the commercial success of our television programming and motion pictures; our continual contractual relationships with our customers; and changes in consumer behavior. If our assumptions are not realized, it is possible that additional impairment charges may need to be recorded in the future.
Income Taxes. We are subject to federal and state income taxes in the U.S., and in several foreign jurisdictions. We record deferred tax assets related to net operating loss carryforwards and certain temporary differences, net of applicable reserves in these jurisdictions. We recognize a future tax benefit to the extent that realization of such benefit is more likely than not on a jurisdiction-by-jurisdiction basis; otherwise, a valuation allowance is applied. In order to realize the benefit of our deferred tax assets, we will need to generate sufficient taxable income in the future in each of the jurisdictions which have these deferred tax assets. However, the assessment as to whether there will be sufficient taxable income in a jurisdiction to realize our net deferred tax assets in that jurisdiction is an estimate which could change in the future depending primarily upon the actual performance of our Company. We will be required to continually evaluate the more likely than not assessment that our net deferred tax assets will be realized, and if operating results deteriorate in a particular jurisdiction, we may need to record a valuation allowance for all or a portion of our deferred tax assets through a charge to our income tax benefit (provision). As of December 31, 2025, we had a valuation allowance of $1,545.3 million against certain U.S. and foreign deferred tax assets that may not be realized on a more likely than not basis.
Our quarterly income tax provision and our corresponding annual effective tax rate are based on expected income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate. For interim financial reporting, we estimate the annual effective tax rate based on projected taxable income for the full year and record a quarterly tax provision in accordance with the expected annual effective tax rate. As the year progresses, we refine the estimates of the year’s taxable income as new information becomes available, including year-to-date financial results. This continual estimation process often results in a change to our expected annual effective tax rate for the year. When this occurs, we adjust our income tax provision during the quarter in which the change in estimate occurs so that the year-to-date income tax provision reflects the expected annual effective tax rate. Significant judgment is required in determining our expected annual effective tax rate and in evaluating our tax positions.
Our effective tax rates differ from the U.S. federal statutory income tax rate and is affected by many factors, including the overall level of income (loss) before taxes and its mix across the jurisdictions in which we conduct operations, changes in tax laws and regulations, changes in valuation allowances against our deferred tax assets, changes in unrecognized tax benefits, tax planning strategies available to us, and other discrete items.
RESULTS OF OPERATIONS
Three Months Ended December 31, 2025 Compared to Three Months Ended December 31, 2024
Consolidated Results from Continuing Operations
The following table sets forth our unaudited condensed consolidated results from continuing operations for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Revenues Studio Business | Three Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Motion Picture(1) | $421.2 | $311.4 | $109.8 | 35.3% |
| Television Production | 303.1 | 404.6 | (101.5) | (25.1)% |
| Total Studio Business | 724.3 | 716.0 | 8.3 | 1.2% |
| Intersegment eliminations | — | (87.8) | 87.8 | nm |
| Total revenues | 724.3 | 628.2 | 96.1 | 15.3% |
| Expenses: | ||||
| Direct operating | 427.3 | 397.7 | 29.6 | 7.4% |
| Distribution and marketing | 153.2 | 80.2 | 73.0 | 91.0% |
| General and administration | 94.1 | 85.7 | 8.4 | 9.8% |
| Depreciation and amortization | 4.4 | 4.4 | — | —% |
| Restructuring and other | 9.3 | 32.5 | (23.2) | (71.4)% |
| Total expenses | 688.3 | 600.5 | 87.8 | 14.6% |
| Operating loss | 36.0 | 27.7 | 8.3 | 30.0% |
| Interest expense | (65.0) | (63.7) | (1.3) | 2.0% |
| Interest and other income | 4.0 | 3.1 | 0.9 | 29.0% |
| Other income (losses), net | (7.6) | 10.2 | (17.8) | nm |
| Losses on extinguishment of debt | — | (0.3) | 0.3 | nm |
| Equity interests income (loss) | (5.1) | 7.6 | (12.7) | nm |
| Loss from continuing operations before income taxes | (37.7) | (15.4) | (22.3) | nm |
| Income tax provision | (6.7) | (4.3) | (2.4) | 55.8% |
| Net loss from continuing operations | (44.4) | (19.7) | (24.7) | nm |
| Net income (loss) from discontinued operations, net of income taxes | — | 1.2 | (1.2) | nm |
| Less: Net (income) loss from continuing operations attributable to noncontrolling interests | (1.8) | (3.4) | 1.6 | (47.1)% |
| Net loss attributable to Lionsgate Studios Corp. shareholders | $(46.2) | $(21.9) | $(24.3) | nm |
(1) During the first quarter of fiscal 2026, the Company began reflecting the results of operations of its streaming platform in India within the Motion Picture segment as such operations are not a part of the disposal group of the Starz Business. Accordingly, the following amounts were reclassified from the former Media Networks segment to the Motion Picture segment in the three months ended December 31, 2024 to conform to the current period presentation: (i) revenue of $2.2 million; (ii) direct operating expense of $1.6 million; (iii) distribution and marketing expense of $0.8 million; and (iv) general and administration expense of $0.7 million, which resulted in gross contribution loss of $0.2 million and segment loss of $0.9 million. Additionally, the Company sold its streaming platform in India in December 2025, see Note 15 to our unaudited condensed consolidated financial statements.
Revenues. Consolidated revenues increased $96.1 million in the three months ended December 31, 2025 reflecting an increase of $109.8 million from Motion Picture revenue and no intersegment eliminations recorded in the current quarter compared to the prior year quarter of $87.8 million, offset by a decrease of $101.5 million from Television Production. Intersegment eliminations relate to the licensing of products from our Studio Business to the former Media Networks segment prior to the Starz Separation. Following the Starz Separation, revenue from licenses to Starz were not eliminated from our consolidated results from continuing operations. See further discussion in the Segment Results of Operations section below.
Motion Picture revenue increased $109.8 million, primarily due to an increase in theatrical, international and digital home entertainment revenue.
Television Production revenue decreased $101.5 million, primarily due to a decrease in domestic television revenue, partially offset by an increase in international revenue.
Direct Operating Expenses. Direct operating expenses by segment were as follows for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Direct operating expenses Studio Business | Three Months Ended December 31, 2025 Amount | % of Segment Revenues | 2024 Amount | % of Segment Revenues | Change Amount | Percent |
|---|---|---|---|---|---|---|
| Motion Picture(1) | $197.6 | 46.9% | $134.2 | 43.1% | $63.4 | 47.2% |
| Television Production | 221.8 | 73.2% | 320.4 | 79.2% | (98.6) | (30.8)% |
| Total Studio Business | 419.4 | 57.9% | 454.6 | 63.5% | (35.2) | (7.7)% |
| Other | 7.9 | nm | 4.1 | nm | 3.8 | nm |
| Intersegment eliminations | — | nm | (61.0) | nm | 61.0 | nm |
| $427.3 | 59.0% | $397.7 | 63.3% | $29.6 | 7.4% |
nm - Percentage not meaningful
(1) Direct operating expenses for Motion Picture in the three months ended December 31, 2024 reflect the reclassification of $1.6 million from the former Media Networks segment to conform to the current period presentation.
Total direct operating expenses increased in the three months ended December 31, 2025. The increase was primarily due to increased revenue from the Motion Picture segment, partially offset by a decrease in revenue from the Television Production segment. The decrease in intersegment eliminations is due to there being no Motion Picture and Television Production intersegment revenue from licenses of motion pictures and original series to the former Media Networks segment following the Starz Separation, as discussed above. See further discussion in the Segment Results of Operations section below.
Other. Other direct operating expenses in the three months ended December 31, 2025 and December 31, 2024 primarily consist of rent costs for production facilities that were unutilized due to lower demand following the industry strikes amounting to $7.9 million and $4.1 million, respectively. The costs are included in direct operating expense and are not allocated to the segments.
Distribution and Marketing Expenses. Distribution and marketing expenses by segment were as follows for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Distribution and marketing expenses Studio Business: | Three Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Motion Picture(1) | $140.2 | $71.4 | $68.8 | 96.4% |
| Television Production | 13.0 | 8.8 | 4.2 | 47.7% |
| Total Studio Business | $153.2 | $80.2 | $73.0 | 91.0% |
| U.S. theatrical P&A and Premium VOD expense included in Motion Picture distribution and marketing expense | $100.9 | $39.1 | $61.8 | nm |
nm - Percentage not meaningful
(1) Motion Picture distribution and marketing expense in the three months ended December 31, 2024 reflect the reclassification of $0.8 million from the former Media Networks segment to conform to the current period presentation.
Distribution and marketing expenses increased in the three months ended December 31, 2025, primarily due to higher Motion Picture theatrical P&A and Premium VOD expenses associated with the theatrical slate releases in the current quarter. See further discussion in the Segment Results of Operations section below.
General and Administrative Expenses. General and administrative expenses by segment were as follows for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| General and administrative expenses Studio Business | Three Months Ended December 31, 2025 | % of Revenues | 2024 | % of Revenues | Change Amount | Percent |
|---|---|---|---|---|---|---|
| Motion Picture(1) | $24.9 | $23.1 | $1.8 | 7.8% | ||
| Television Production | 12.6 | 14.5 | (1.9) | (13.1)% | ||
| Total Studio Business | 37.5 | 37.6 | (0.1) | (0.3)% | ||
| Corporate | 28.9 | 30.9 | (2.0) | (6.5)% | ||
| Share-based compensation expense | 25.1 | 14.3 | 10.8 | 75.5% | ||
| Purchase accounting and related adjustments | 2.6 | 2.9 | (0.3) | (10.3)% | ||
| Total general and administrative expenses | $94.1 | 13.0% | $85.7 | 13.6% | $8.4 | 9.8% |
(1) Motion Picture general and administrative expenses in the three months ended December 31, 2024 reflect the reclassification of $0.7 million from the former Media Networks segment to conform to the current period presentation.
General and administrative expenses increased in the three months ended December 31, 2025, primarily as a result of increased share-based compensation expense, offset by a decrease in Corporate general and administrative expenses. See further discussion in the Segment Results of Operations section below.
The increase in share-based compensation expense included in general and administrative expense in the three months ended December 31, 2025, as compared to the three months ended December 31, 2024 was primarily due to share-based bonuses granted in the current fiscal period, with no similar grants in the prior fiscal period, and higher fair values in the current fiscal period associated with performance-based stock option and other equity awards that are revalued at each reporting period until the stock option or equity award vests and the applicable performance goals are achieved.
(Amounts in millions)
| Share-based compensation expense by expense category | Three Months Ended December 31, 2025 | 2024 |
|---|---|---|
| General and administrative expense | $25.1 | $14.3 |
| Restructuring and other(1) | 0.9 | — |
| Total share-based compensation expense | $26.0 | $14.3 |
(1) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of vesting schedules for equity awards pursuant to certain severance arrangements.
Restructuring and Other. Restructuring and other decreased $23.2 million in the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. See Note 15 to our unaudited condensed consolidated financial statements. Restructuring and other includes restructuring and severance costs and certain transaction and other costs, when applicable and were as follows for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Restructuring and other: | Three Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Content and other impairments(1) | $5.0 | $7.3 | $(2.3) | (31.5)% |
| Severance(2) | 5.1 | 20.4 | (15.3) | (75.0)% |
| Transaction and other costs(3) | (0.8) | 4.8 | (5.6) | nm |
| $9.3 | $32.5 | $(23.2) | (71.4)% |
nm - Percentage not meaningful
(1) Content and other impairments primarily reflect $2.3 million in content impairment charges recorded during the three months ended December 31, 2025 in connection with the restructuring of the Motion Picture and Television Production businesses. In addition, the amounts in the three months ended December 31, 2025 and 2024 include impairment charges related to certain operating lease right-of-use and leasehold improvements within the Television Production segment. These impairments were recognized as a result of facilities that are no longer expected to be utilized by the Company, primarily related to the integration of eOne.
(2) Severance costs were primarily related to workforce reduction actions undertaken in connection with restructuring and acquisition integration activities, as well as other cost-reduction initiatives.
(3) Transaction and other costs primarily relate to transaction, integration and legal costs incurred in connection with certain strategic transactions and restructuring activities, as well as costs associated with certain legal matters. The three months ended December 31, 2025 include a gain of $2.6 million from the sale of our streaming platform in India.
Interest Expense. Interest expense of $65.0 million in the three months ended December 31, 2025 increased $1.3 million from the three months ended December 31, 2024.
The following table presents the components of interest expense for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Interest Expense | Three Months Ended December 31, 2025 | 2024 |
|---|---|---|
| Revolving credit facility | $6.6 | $13.4 |
| Term loans | — | 6.9 |
| Senior Notes | 5.8 | 5.4 |
| IP credit facilities(1) | 25.9 | 18.9 |
| Other(2) | 26.7 | 19.1 |
| Total interest expense | $65.0 | $63.7 |
(1) IP credit facility interest expense includes interest expense associated with the eOne IP Credit Facility and the LG IP Credit Facility.
(2) Other interest expense includes payments associated with certain film related obligations (Production loans, Production Tax Credit Facility, Film Library Facility, Backlog Facility and other - see Note 8 to our unaudited condensed consolidated financial statements), interest expense associated with our 3 Arts Entertainment Credit Facility, payments and receipts associated with interest rate swaps along with the noncash amortization of unrealized gains in accumulated other comprehensive income related to dedesignated interest rate swaps which are being amortized to interest expense (see Note 18 to our unaudited condensed consolidated financial statements), and noncash amortization of debt issuance costs.
Interest and Other Income. Interest and other income of $4.0 million in the three months ended December 31, 2025 increased, as compared to interest and other income of $3.1 million in the three months ended December 31, 2024.
Other Income (Loss), net. Other gain (losses) was net loss of $7.6 million in the three months ended December 31, 2025, compared to a net gain of $10.2 million in the three months ended December 31, 2024. The change was due to losses incurred related to foreign currency transactions during the three months ended December 31, 2025 as compared to income related to foreign currency transactions during the three months ended December 31, 2024
Loss on Extinguishment of Debt. During the three months ended December 31, 2024, a loss on extinguishment of debt of $0.3 million was recorded for the write-off of debt issuance costs associated with the voluntary prepayment of Term Loan B. There was no comparable loss in the three months ended December 31, 2025. See Note 7 to our unaudited condensed consolidated financial statements.
Equity Interests Income (Loss). Equity interests loss of $5.1 million in the three months ended December 31, 2025, compared to equity interests income of $7.6 million in the three months ended December 31, 2024.
Income Tax Provision. We had an income tax provision of $6.7 million in the three months ended December 31, 2025, compared to an income tax provision of $4.3 million in the three months ended December 31, 2024. Our income tax provision differs from the U.S. federal statutory income tax rate of 21% multiplied by income (loss) before taxes due to the mix of our earnings across the various jurisdictions in which our operations are conducted, changes in valuation allowances against our deferred tax assets, and certain minimum income and foreign withholding taxes.
Net Loss Attributable to Lionsgate Studios Corp. Shareholders. Net loss attributable to our shareholders for the three months ended December 31, 2025 was $46.2 million, or basic and diluted net loss per common share of $0.16 on 290.0 million weighted average common shares outstanding. This compares to net loss attributable to our shareholders for the three months ended December 31, 2024 of $21.9 million, or basic and diluted net loss per common share of $0.09 on 250.2 million weighted average common shares outstanding.
Segment Results of Operations and Non-GAAP Measures
Our primary measure of segment performance is segment profit. Segment profit is defined as segment revenues, less segment direct operating and segment distribution and marketing expense, less segment general and administration expenses. Segment profit and total segment profit excludes, when applicable, corporate general and administrative expense, restructuring and other costs, share-based compensation, certain programming and content charges as a result of changes in management and/or programming and content strategy, certain benefits related to the COVID-19 global pandemic, unallocated rent cost and purchase accounting and related adjustments. Segment profit is a U.S. GAAP financial measure and is disclosed in Note 16 to our unaudited condensed consolidated financial statements.
We also present below our total segment profit for all of our segments. Total segment profit, when presented outside of the segment information and reconciliations included in Note 16 to our unaudited condensed consolidated financial statements, is considered a non-GAAP financial measure, and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. We use this non-GAAP measure, among other measures, to evaluate the aggregate operating performance of our business.
We believe the presentation of total segment profit is relevant and useful for investors because it allows investors to view total segment performance in a manner similar to the primary method used by our management and enables them to understand the fundamental performance of our businesses before non-operating items. Total segment profit is considered an important measure of the Company’s performance because it reflects the aggregate profit contribution from the Company’s segments and represents a measure, consistent with our segment profit, that eliminates amounts that, in management’s opinion, do not necessarily reflect the fundamental performance of our businesses, are infrequent in occurrence, and in some cases are non-cash expenses. Not all companies calculate segment profit or total segment profit in the same manner as defined by our management and similarly titled measures presented by other companies may not be comparable due to differences in the methods of calculation and excluded items.
The following table reconciles the operating loss, which is the most comparable U.S. GAAP measure to the total segment profit non-GAAP measure for the three months ended December 31, 2025 and 2024. In addition, each of segment direct operating expense, distribution and marketing expense and general and administrative expense is reconciled to the respective line items presented in the GAAP-based unaudited condensed consolidated statement of operations in the preceding section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations which discusses our unaudited condensed consolidated results of operations.
(Amounts in millions)
| Three Months Ended December 31, 2025 | 2024 | Change Amount | Percent | |
|---|---|---|---|---|
| Operating income | $36.0 | $27.7 | $8.3 | 30.0% |
| Corporate general and administrative expenses | 28.9 | 30.9 | (2.0) | (6.5)% |
| Adjusted depreciation and amortization | 3.4 | 3.3 | 0.1 | 3.0% |
| Restructuring and other | 9.3 | 32.5 | (23.2) | (71.4)% |
| Unallocated rent cost included in direct operating expense | 7.9 | 4.1 | 3.8 | 92.7% |
| Adjusted share-based compensation expense | 25.1 | 14.3 | 10.8 | 75.5% |
| Purchase accounting and related adjustments | 3.6 | 4.0 | (0.4) | (10.0)% |
| Total segment profit | $114.2 | $116.8 | $(2.6) | (2.2)% |
See Note 16 to our unaudited condensed consolidated financial statements for additional details on the reconciling line items presented above. Note 16 also includes reconciliations of depreciation and amortization and share-based compensation expense, as reported in our statements of operations, to the respective adjusted amounts shown above.
We refer to our Motion Picture and Television Production segments collectively as our Studio Business. The table below sets forth the revenues and segment profit of our collective Studio Business.
(Amounts in millions)
| Revenue Studio Business | Three Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Motion Picture(1) | $421.2 | $311.4 | $109.8 | 35.3% |
| Television Production | 303.1 | 404.6 | (101.5) | (25.1)% |
| Total Studio Business | $724.3 | $716.0 | $8.3 | 1.2% |
| Intersegment eliminations | — | (87.8) | 87.8 | nm |
| $724.3 | $628.2 | $96.1 | 15.3% | |
| Segment Profit | ||||
| Studio Business | ||||
| Motion Picture(1) | $58.5 | $82.7 | $(24.2) | (29.3)% |
| Television Production | 55.7 | 60.9 | (5.2) | (8.5)% |
| Total Studio Business | $114.2 | $143.6 | $(29.4) | (20.5)% |
| Intersegment eliminations | — | (26.8) | 26.8 | nm |
| $114.2 | $116.8 | $(2.6) | (2.2)% |
(1) Revenue and Segment profit of the Motion Picture segment reflect a reclassification from the former Media Networks segment to the Motion Picture segment in the three months ended December 31, 2024 to conform to the current period presentation as described in Note 16, for the following: (i) revenue of $2.2 million; (ii) direct operating expense of $1.6 million; (iii) distribution and marketing expense of $0.8 million; and (iv) general and administration expense of $0.7 million, which resulted in gross contribution loss of $0.2 million and segment loss of $0.9 million. Additionally, the Company sold its streaming platform in India in December 2025, see Note 15 to our unaudited condensed consolidated financial statements.
See the following discussion for further detail of our individual segments. The segment results of operations presented below do not include the elimination of intersegment transactions which are eliminated when presenting consolidated results.
Motion Picture
The table below sets forth Motion Picture gross contribution and segment profit for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Motion Picture Segment: | Three Months Ended December 31, 2025 | 2024 (1) | Change Amount | Percent |
|---|---|---|---|---|
| Revenue | $421.2 | $311.4 | $109.8 | 35.3% |
| Expenses: | ||||
| Direct operating expense | 197.6 | 134.2 | 63.4 | 47.2% |
| Distribution & marketing expense | 140.2 | 71.4 | 68.8 | 96.4% |
| Gross contribution | 83.4 | 105.8 | (22.4) | (21.2)% |
| General and administrative expenses | 24.9 | 23.1 | 1.8 | 7.8% |
| Segment profit | $58.5 | $82.7 | $(24.2) | (29.3)% |
| U.S. theatrical P&A and Premium VOD expense included in distribution and marketing expense | $100.9 | $39.1 | $61.8 | nm |
| Direct operating expense as a percentage of revenue | 46.9% | 43.1% | ||
| Gross contribution as a percentage of revenue | 19.8% | 34.0% |
(1) Revenue and Segment profit of the Motion Picture segment reflect a reclassification from the former Media Networks segment to the Motion Picture segment in the three months ended December 31, 2024 to conform to the current period presentation as described in Note 16, for the following: (i) revenue of $2.2 million; (ii) direct operating expense of $1.6 million; (iii) distribution and marketing expense of $0.8 million; and (iv) general and administration expense of $0.7 million, which resulted in gross contribution loss of $0.2 million and segment loss of $0.9 million. Additionally, the Company sold its streaming platform in India in December 2025, see Note 15 to our unaudited condensed consolidated financial statements.
Revenue. The table below sets forth Motion Picture revenue by media and product category for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Motion Picture Revenue | Three Months Ended December 31, 2025 Lionsgate Original Releases(1) | Other Film(2) | Total | 2024 Lionsgate Original Releases(1) | Other Film(2) | Total | Total Increase (Decrease) |
|---|---|---|---|---|---|---|---|
| Theatrical | $66.1 | $4.6 | $70.7 | $33.9 | $1.1 | $35.0 | $35.7 |
| Home Entertainment | |||||||
| Digital Media | 100.3 | 54.8 | 155.1 | 93.4 | 52.3 | 145.7 | 9.4 |
| Packaged Media | 8.2 | 5.9 | 14.1 | 9.8 | 6.2 | 16.0 | (1.9) |
| Total Home Entertainment | 108.5 | 60.7 | 169.2 | 103.2 | 58.5 | 161.7 | 7.5 |
| Television | 35.0 | 8.1 | 43.1 | 30.5 | 7.8 | 38.3 | 4.8 |
| International(3) | 95.4 | 25.2 | 120.6 | 48.2 | 22.2 | 70.4 | 50.2 |
| Other | 15.4 | 2.2 | 17.6 | 3.1 | 2.9 | 6.0 | 11.6 |
| $320.4 | $100.8 | $421.2 | $218.9 | $92.5 | $311.4 | $109.8 |
(1) Lionsgate Original Releases: Includes titles originally planned for a wide theatrical release by Lionsgate, including titles that have changed from a planned wide theatrical release to an initial direct-to-streaming release. These releases include films developed and produced in-house, films co-developed and co-produced and films acquired or licensed from third parties. In addition, Lionsgate Original Releases also includes multi-platform and direct-to-platform motion pictures originally released or licensed by Lionsgate, and the licensing of our original release motion picture content to other ancillary markets (location-based entertainment, games, etc.).
(2) Other Film: Includes acquired and licensed brands and libraries originally released by other parties such as third-party library product, including our titles released by acquired companies prior to our acquisition of the company (i.e., Summit Entertainment library), and titles released with our equity method investees, Roadside Attractions and Pantelion Films, and other titles.
(3) International revenue in the three months ended December 31, 2024 reflects the reclassification of $2.2 million from the former Media Networks segment to conform to the current period presentation.
Theatrical revenue increased $35.7 million in the three months ended December 31, 2025 as compared to the three months ended December 31, 2024, primarily due to higher revenue from Lionsgate Original Releases of $32.2 million driven by the theatrical releases of Now You See Me: Now You Don’t and The Housemaid in the current quarter.
Home entertainment revenue increased $7.5 million, or 4.6%, in the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, due to an increase in digital media revenue of $9.4 million, offset by a decrease in packaged media revenue of $1.9 million. The increase in digital media revenue was due to higher revenue of $6.9 million and $2.5 million generated from Lionsgate Original Releases and Other Films, respectively. The increase in revenue from Lionsgate Original Releases was driven by the theatrical slate title releases of The Long Walk and Good Fortune, partially offset by lower revenue from multi-platform releases.
Television revenue increased $4.8 million, or 12.5%, in the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, primarily due to higher revenue from our Lionsgate Original Releases of fiscal 2025 and 2026 theatrical slate titles with television window openings in the current quarter, compared to the fiscal 2025 television window openings for theatrical slate titles in the prior quarter.
International revenue increased $50.2 million, or 71.3%, in the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, due to higher revenue generated from Lionsgate Original Releases of $47.2 million, driven by the theatrical slate title releases of Now You See Me: Now You Don’t and The Housemaid in the current quarter.
Direct Operating Expense. The increase in direct operating expenses was due to higher Motion Picture revenue. The increase in direct operating expenses as a percentage of revenue is driven by the performance and costs of the titles released during the three months ended December 31, 2025. There were no write-downs in investments in film included in Motion Picture segment direct operating expense in the three months ended December 31, 2025, as compared to $0.2 million in the three months ended December 31, 2024.
Distribution and Marketing Expense. The increase in distribution and marketing expense in the three months ended December 31, 2025 was primarily due to higher theatrical P&A and Premium VOD expense associated with the theatrical slate releases in the current quarter. In the three months ended December 31, 2025 approximately $16.0 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $22.1 million in the three months ended December 31, 2024 in the Motion Picture segment.
Gross Contribution. Gross contribution of the Motion Picture segment for the three months ended December 31, 2025 decreased as compared to the three months ended December 31, 2024 as a result of higher Motion Picture distribution and marketing and direct operating expenses, partially offset by higher Motion Picture revenue.
General and Administrative Expense. General and administrative expenses of the Motion Picture segment in the three months ended December 31, 2025 increased $1.8 million, or 7.8%.
Television Production
The table below sets forth Television Production gross contribution and segment profit for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Television Production Segment: | Three Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Revenue | $303.1 | $404.6 | $(101.5) | (25.1)% |
| Expenses: | ||||
| Direct operating expense | 221.8 | 320.4 | (98.6) | (30.8)% |
| Distribution & marketing expense | 13.0 | 8.8 | 4.2 | 47.7% |
| Gross contribution | 68.3 | 75.4 | (7.1) | (9.4)% |
| General and administrative expenses | 12.6 | 14.5 | (1.9) | (13.1)% |
| Segment profit | $55.7 | $60.9 | $(5.2) | (8.5)% |
| Direct operating expense as a percentage of revenue | 73.2% | 79.2% | ||
| Gross contribution as a percentage of revenue | 22.5% | 18.6% |
Revenue. The table below sets forth Television Production revenue and changes in revenue by media for the three months ended December 31, 2025 and 2024:
(Amounts in millions)
| Television Production | Three Months Ended December 31, 2025 | 2024 Amount | Increase (Decrease) Percent | |
|---|---|---|---|---|
| Domestic Television | $134.2 | $259.9 | $(125.7) | (48.4)% |
| International | 85.4 | 59.3 | 26.1 | 44.0% |
| Home Entertainment | ||||
| Digital | 58.0 | 55.5 | 2.5 | 4.5% |
| Packaged Media | 1.2 | 1.7 | (0.5) | (29.4)% |
| Total Home Entertainment | 59.2 | 57.2 | 2.0 | 3.5% |
| Other | 24.3 | 28.2 | (3.9) | (13.8)% |
| $303.1 | $404.6 | $(101.5) | (25.1)% |
The primary component of Television Production revenue is domestic television revenue. Domestic television revenue decreased $125.7 million, or 48.4%, in the three months ended December 31, 2025, due to a lower number of television episodes delivered in the current quarter as compared to the prior quarter.
International revenue increased $26.1 million, or 44.0%, in the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, due to higher revenue generated internationally from episodes delivered in the current quarter as compared to lower revenue generated from international television episodes delivered in the prior quarter.
Home entertainment revenue increased $2.0 million, or 3.5% ,in the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, due to higher digital media revenues.
Direct Operating Expense. Direct operating expense of the Television Production segment in the three months ended December 31, 2025 decreased $98.6 million, or 30.8% due to the decrease in Television Production revenues. Direct operating expenses as a percentage of television production revenue decreased primarily due to the mix of titles generating revenue in the current quarter as compared to the prior quarter.
Gross Contribution. Gross contribution of the Television Production segment for the three months ended December 31, 2025 decreased as compared to the three months ended December 31, 2024, primarily due to lower Television Production revenue, offset by lower direct operating expenses.
General and Administrative Expense. General and administrative expenses of the Television Production segment in the three months ended December 31, 2025 decreased $1.9 million, or 13.1%.
RESULTS OF OPERATIONS
Nine Months Ended December 31, 2025 Compared to Nine Months Ended December 31, 2024
Consolidated Results from Continuing Operations
The following table sets forth our unaudited condensed consolidated results from continuing operations for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Revenues Studio Business | Nine Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Motion Picture(1) | $964.9 | $1,070.1 | $(105.2) | (9.8)% |
| Television Production | 790.3 | 1,062.5 | (272.2) | (25.6)% |
| Total Studio Business | 1,755.2 | 2,132.6 | (377.4) | (17.7)% |
| Intersegment eliminations | (29.9) | (413.5) | 383.6 | (92.8)% |
| Total revenues | 1,725.3 | 1,719.1 | 6.2 | 0.4% |
| Expenses: | ||||
| Direct operating | 1,066.6 | 1,159.1 | (92.5) | (8.0)% |
| Distribution and marketing | 373.9 | 308.2 | 65.7 | 21.3% |
| General and administration | 252.3 | 269.3 | (17.0) | (6.3)% |
| Depreciation and amortization | 13.2 | 13.2 | — | —% |
| Restructuring and other | 39.8 | 64.9 | (25.1) | (38.7)% |
| Total expenses | 1,745.8 | 1,814.7 | (68.9) | (3.8)% |
| Operating loss | (20.5) | (95.6) | 75.1 | (78.6)% |
| Interest expense | (200.9) | (195.1) | (5.8) | 3.0% |
| Interest and other income | 11.8 | 11.5 | 0.3 | 2.6% |
| Other losses, net | (21.5) | (5.2) | (16.3) | nm |
| Losses on extinguishment of debt | (2.2) | (4.5) | 2.3 | (51.1)% |
| Gain on investments, net | 8.8 | — | 8.8 | nm |
| Equity interests income (loss) | (8.2) | 8.5 | (16.7) | nm |
| Loss from continuing operations before income taxes | (232.7) | (280.4) | 47.7 | (17.0)% |
| Income tax provision | (14.9) | (13.8) | (1.1) | 8.0% |
| Net loss from continuing operations | (247.6) | (294.2) | 46.6 | (15.8)% |
| Net income (loss) from discontinued operations, net of income taxes | (16.5) | 34.7 | (51.2) | nm |
| Less: Net (income) loss from continuing operations attributable to noncontrolling interests | (4.4) | 14.8 | (19.2) | nm |
| Net loss attributable to Lionsgate Studios Corp. shareholders | $(268.5) | $(244.7) | $(23.8) | 9.7% |
(1) During the first quarter of fiscal 2026, the Company began reflecting the results of operations of its streaming platform in India within the Motion Picture segment as such operations are not a part of the disposal group of the Starz Business. Accordingly, revenue of $6.8 million was reclassified from the former Media Networks segment to the Motion Picture segment in the nine months ended December 31, 2024 to conform to the current period presentation. Additionally, the Company sold its streaming platform in India in December 2025, see Note 15 to our unaudited condensed consolidated financial statements.
Revenues. Consolidated revenues increased $6.2 million in the nine months ended December 31, 2025, reflecting a decrease of $105.2 million and $272.2 million from Motion Picture and Television Productions revenue, respectively, offset by lower intersegment eliminations recorded in the current period of $383.6 million. Intersegment eliminations relate to the licensing of products from our Studio Business to the former Media Networks segment prior to the Starz Separation.
Motion Picture revenue decreased $105.2 million due to a decrease in television revenue, international revenue and home entertainment revenue, offset by an increase in theatrical and other revenue.
Television Production revenue decreased $272.2 million due to a decrease in domestic television and other revenue, offset by an increase in home entertainment and international revenue.
The increase in intersegment eliminations of $383.6 million is due to lower Motion Picture and Television Production intersegment revenues from licenses of motion pictures and original series to the former Media Networks segment prior to the Starz Separation as discussed above. Following the Starz Separation, revenue from licenses to Starz are not eliminated from the consolidated results from continuing operations. See further discussion in the Segment Results of Operations section below.
Direct Operating Expenses. Direct operating expenses by segment were as follows for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Direct operating expenses Studio Business | Nine Months Ended December 31, 2025 Amount | % of Segment Revenues | 2024 Amount | % of Segment Revenues | Change Amount | Percent |
|---|---|---|---|---|---|---|
| Motion Picture(1) | $467.9 | 48.5% | $543.7 | 50.8% | $(75.8) | (13.9)% |
| Television Production | 620.9 | 78.6% | 889.9 | 83.8% | (269.0) | (30.2)% |
| Total Studio Business | 1,088.8 | 62.0% | 1,433.6 | 67.2% | (344.8) | (24.1)% |
| Other | 20.4 | nm | 12.6 | nm | 7.8 | nm |
| Intersegment eliminations | (42.6) | nm | (287.1) | nm | 244.5 | nm |
| $1,066.6 | 61.8% | $1,159.1 | 67.4% | $(92.5) | (8.0)% |
nm - Percentage not meaningful
(1) Direct operating expenses for Motion Picture in the nine months ended December 31, 2024 reflect the reclassification of $5.2 million from the former Media Networks segment to conform to the current period presentation.
Direct operating expenses decreased in the nine months ended December 31, 2025, primarily due to lower direct operating expenses for our Television Production and Motion Picture segments and a decrease in intersegment eliminations. The decrease of expenses for the Television Production and Motion Picture segments was due to decreased revenue generated in each segment as compared to the prior year period. The decrease in intersegment eliminations is primarily due to lower Motion Picture and Television Production intersegment revenue from licenses of motion pictures and original series, respectively, to the former Media Networks segment prior to the Starz Separation, as discussed above. See further discussion in the Segment Results of Operations section below.
Other. Other direct operating expense in the nine months ended December 31, 2025 and 2024 include rent costs for production facilities that were unutilized due to lower demand following the industry strikes amounting to $19.4 million and $14.6 million, respectively, which was not allocated to the segments, and is included in direct operating expense. In addition, other direct operating costs in the nine months ended December 31, 2024 include a benefit from insurance recoveries on COVID related charges.
Distribution and Marketing Expenses. Distribution and marketing expenses by segment were as follows for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Distribution and marketing expenses Studio Business: | Nine Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Motion Picture(1) | $334.7 | $280.9 | $53.8 | 19.2% |
| Television Production | 39.2 | 27.3 | 11.9 | 43.6% |
| Total Studio Business | $373.9 | $308.2 | $65.7 | 21.3% |
| U.S. theatrical P&A and Premium VOD expense included in Motion Picture distribution and marketing expense | $232.3 | $181.1 | $51.2 | 28.3% |
(1) Motion Picture distribution and marketing expense in the nine months ended December 31, 2024 reflects the reclassification of $2.2 million from the former Media Networks segment to conform to the current period presentation.
Distribution and marketing expenses increased in the nine months ended December 31, 2025, primarily due to higher expenses incurred in the Motion Picture and Television Production segments. See further discussion in the Segment Results of Operations section below.
General and Administrative Expenses. General and administrative expenses by segment were as follows for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| General and administrative expenses Studio Business | Nine Months Ended December 31, 2025 | % of Revenues | 2024 | % of Revenues | Change Amount | Percent |
|---|---|---|---|---|---|---|
| Motion Picture(1) | $70.6 | $75.7 | $(5.1) | (6.7)% | ||
| Television Production | 36.0 | 49.3 | (13.3) | (27.0)% | ||
| Total Studio Business | 106.6 | 125.0 | (18.4) | (14.7)% | ||
| Corporate | 90.0 | 96.3 | (6.3) | (6.5)% | ||
| Share-based compensation expense | 49.2 | 41.2 | 8.0 | 19.4% | ||
| Purchase accounting and related adjustments | 6.5 | 6.8 | (0.3) | (4.4)% | ||
| Total general and administrative expenses | $252.3 | 14.6% | $269.3 | 15.7% | $(17.0) | (6.3)% |
(1) Motion Picture general and administrative expenses in the nine months ended December 31, 2024 reflect the reclassification of $2.1 million from the former Media Networks segment to conform to the current period presentation.
General and administrative expenses decreased in the nine months ended December 31, 2025, resulting from decreased Studio Business and Corporate general and administrative expenses, partially offset by an increase in share-based compensation expense. See further discussion in the Segment Results of Operations section below.
Corporate general and administrative expenses decreased $6.3 million, or 6.5%, primarily due to decreases in rent and facility costs and professional fees.
The increase in share-based compensation expense included in general and administrative expense in the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024, was primarily due to share-based bonuses granted in the current year period, with no similar grants in the prior year period. The following table presents share-based compensation expense by financial statement line item:
(Amounts in millions)
| Share-based compensation expense by expense category | Nine Months Ended December 31, 2025 | 2024 |
|---|---|---|
| General and administrative expense | $49.2 | $41.3 |
| Restructuring and other(1) | 1.7 | 4.7 |
| Total share-based compensation expense | $50.9 | $46.0 |
(1) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of vesting schedules for equity awards pursuant to certain severance arrangements.
Restructuring and Other. Restructuring and other decreased $25.1 million in the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024. See Note 15 to our unaudited condensed consolidated financial statements. Restructuring and other includes restructuring and severance costs and certain transaction and other costs, when applicable and were as follows for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Restructuring and other: | Nine Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Content and other impairments(1) | $14.9 | $25.8 | $(10.9) | (42.2)% |
| Severance(2) | 19.8 | 24.6 | (4.8) | (19.5)% |
| Transaction and other costs(3) | 5.1 | 14.5 | (9.4) | (64.8)% |
| $39.8 | $64.9 | $(25.1) | (38.7)% |
(1) Content and other impairments primarily reflect $10.9 million in development cost write-offs recorded during the nine months ended December 31, 2025 for write-downs in connection with the restructuring of the Motion Picture and Television Production businesses. In addition, the amounts in the nine months ended December 31, 2025 and 2024 include impairment charges related to certain operating lease right-of-use assets and leasehold improvements within the Television Production segment. These impairments were recognized as a result of facilities that are no longer expected to be utilized by the Company, primarily related to the integration of eOne.
(2) Severance costs were primarily related to workforce reduction actions undertaken in connection with restructuring and acquisition integration activities, as well as other cost-reduction initiatives.
(3) Transaction and other costs primarily relate to transaction, integration and legal costs incurred in connection with certain strategic transactions and restructuring activities, as well as costs associated with certain legal matters. For the nine months ended December 31, 2025, transaction costs associated with the Starz Separation are excluded, as such amounts are classified within discontinued operations. The nine months ended December 31, 2025 include a gain of $2.6 million from the sale of our streaming platform in India.
Interest Expense. Interest expense of $200.9 million in the nine months ended December 31, 2025 increased by $5.8 million from the nine months ended December 31, 2024 due to higher average balances on variable rate corporate debt and film related obligations, offset by slightly lower average interest rates and a smaller benefit from the interest rate swaps. The following table presents the components of interest expense for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Interest Expense | Nine Months Ended December 31, 2025 | 2024 |
|---|---|---|
| Revolving credit facility | $18.4 | $44.9 |
| Term loans | 2.0 | 45.6 |
| Senior Notes | 19.1 | 16.1 |
| IP credit facilities(1) | 68.3 | 24.9 |
| Other(2) | 93.1 | 63.6 |
| Total interest expense | $200.9 | $195.1 |
(1) IP credit facility interest expense includes interest expense associated with the eOne IP Credit Facility and the LG IP Credit Facility.
(2) Other interest expense includes payments associated with certain film related obligations (Production loans, Production Tax Credit Facility, Film Library Facility, Backlog Facility and other - see Note 8 to our unaudited condensed consolidated financial statements), interest expense associated with our 3 Arts Entertainment Credit Facility, payments and receipts associated with interest rate swaps along with the noncash amortization of unrealized gains in accumulated other comprehensive income related to dedesignated interest rate swaps which are being amortized to interest expense (see Note 18 to our unaudited condensed consolidated financial statements), and noncash amortization of debt issuance costs.
Interest and Other Income. Interest and other income of $11.8 million for the nine months ended December 31, 2025 increased, as compared to interest and other income of $11.5 million for the nine months ended December 31, 2024.
Other Loss, net. Other losses, net of $21.5 million for the nine months ended December 31, 2025 increased as compared to other loss, net of $5.2 million for the nine months ended December 31, 2024. The change was due to losses incurred related to foreign currency transactions during the nine months ended December 31, 2025 as compared to income related to foreign currency transactions during the nine months ended December 31, 2024.
Loss on Extinguishment of Debt. Loss on extinguishment of debt of $2.2 million during the nine months ended December 31, 2025 resulted from the write-off of debt issuance costs following the termination and then modification of our revolving credit facility as part of the Starz Separation. Loss on extinguishment of debt of $4.5 million during the nine months ended December 31, 2024, related to the write-off of debt issuance costs associated with the voluntary prepayment of Term Loan A and Term Loan B. See Note 7 to our unaudited condensed consolidated financial statements.
Gain on Investments, net. Gain on investments, net of $8.8 million in the nine months ended December 31, 2025 represented a gain on the sale of our equity method ownership interest in Spyglass and other investments. There was no comparable gain in the nine months ended December 31, 2024.
Equity Interests Income (Loss). Equity interests loss of $8.2 million in the nine months ended December 31, 2025 compared to equity interests income of $8.5 million in the nine months ended December 31, 2024.
Income Tax Provision. We had an income tax provision of $14.9 million in the nine months ended December 31, 2025, compared to an income tax provision of $13.8 million in the nine months ended December 31, 2024. Our income tax provision differs from the U.S. federal statutory income tax rate of 21% multiplied by income (loss) before taxes due to the mix of our earnings across the various jurisdictions in which our operations are conducted, changes in valuation allowances against our deferred tax assets, and certain minimum income and foreign withholding taxes.
Net Loss Attributable to Lionsgate Studios Corp. Shareholders. Net loss attributable to our shareholders for the nine months ended December 31, 2025 was $268.5 million, or basic and diluted net loss per common share of $0.95 on 283.9 million weighted average common shares outstanding. This compares to net loss attributable to our shareholders for the nine months ended December 31, 2024 of $244.7 million, or basic and diluted net loss per common share of $0.99 on 248.4 million weighted average common shares outstanding.
Segment Results of Operations and Non-GAAP Measures
See “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Three Months Ended December 31, 2025 Compared to Three Months Ended December 31, 2024”, Segment Results of Operations and Non-GAAP Measures for a definition of the non-GAAP measure and total segment profit.
The following table reconciles the operating loss, which is the most comparable U.S. GAAP measure, to the total segment profit non-GAAP measure for the nine months ended December 31, 2025 and 2024. In addition, each of segment direct operating expense, distribution and marketing expense and general and administrative expense is reconciled to the respective line items presented in the GAAP-based unaudited condensed consolidated statement of operations in the preceding section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations which discusses our unaudited condensed consolidated results of operations.
(Amounts in millions)
| Nine Months Ended December 31, 2025 | 2024 | Change Amount | Percent | |
|---|---|---|---|---|
| Operating loss | $(20.5) | $(95.6) | $75.1 | (78.6)% |
| Corporate general and administrative expenses | 90.0 | 96.3 | (6.3) | (6.5)% |
| Adjusted depreciation and amortization | 10.2 | 10.1 | 0.1 | 1.0% |
| Restructuring and other | 39.8 | 64.9 | (25.1) | (38.7)% |
| COVID-19 related (benefit) charges | 1.0 | (2.1) | 3.1 | nm |
| Unallocated rent cost included in direct operating expense | 19.4 | 14.6 | 4.8 | 32.9% |
| Adjusted share-based compensation expense | 49.2 | 41.3 | 7.9 | 19.1% |
| Purchase accounting and related adjustments | 9.5 | 9.9 | (0.4) | (4.0)% |
| Total segment profit | $198.6 | $139.4 | $59.2 | 42.5% |
nm - Percentage not meaningful
See Note 16 to our unaudited condensed consolidated financial statements for additional details on the reconciling line items presented above. Note 16 to our unaudited condensed consolidated financial statements also includes reconciliations of depreciation and amortization and share-based compensation expense, as reported in our statements of operations, to the respective adjusted amounts shown above.
We refer to our Motion Picture and Television Production segments collectively as our Studio Business. The table below sets forth the revenues and segment profit of our collective Studio Business.
(Amounts in millions)
| Revenue Studio Business | Nine Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Motion Picture(1) | $964.9 | $1,070.1 | $(105.2) | (9.8)% |
| Television Production | 790.3 | 1,062.5 | (272.2) | (25.6)% |
| Total Studio Business | $1,755.2 | $2,132.6 | $(377.4) | (17.7)% |
| Intersegment eliminations | (29.9) | (413.5) | 383.6 | (92.8)% |
| $1,725.3 | $1,719.1 | $6.2 | 0.4% | |
| Segment Profit | ||||
| Studio Business | ||||
| Motion Picture(1) | $91.7 | $169.8 | $(78.1) | (46.0)% |
| Television Production | 94.2 | 96.0 | (1.8) | (1.9)% |
| Total Studio Business | $185.9 | $265.8 | $(79.9) | (30.1)% |
| Intersegment eliminations | 12.7 | (126.4) | 139.1 | nm |
| $198.6 | $139.4 | $59.2 | 42.5% |
(1) Revenue and Segment profit of the Motion Picture segment reflect a reclassification from the former Media Networks segment to the Motion Picture segment in the nine months ended December 31, 2024 to conform to the current period presentation as described in Note 16, for the following: (i) revenue of $6.8 million; (ii) direct operating expense of $5.2 million; (iii) distribution and marketing expense of $2.2 million; and (iv) general and administration expense of $2.1 million, which resulted in gross contribution loss of $0.6 million and segment loss of $2.7 million. Additionally, the Company sold its streaming platform in India in December 2025, see Note 15 to our unaudited condensed consolidated financial statements.
See the following discussion for further detail of our individual segments. The segment results of operations presented below do not include the elimination of intersegment transactions which are eliminated when presenting consolidated results.
Motion Picture
The table below sets forth Motion Picture gross contribution and segment profit for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Motion Picture Segment: | Nine Months Ended December 31, 2025 | 2024 (1) | Change Amount | Percent |
|---|---|---|---|---|
| Revenue | $964.9 | $1,070.1 | $(105.2) | (9.8)% |
| Expenses: | ||||
| Direct operating expense | 467.9 | 543.7 | (75.8) | (13.9)% |
| Distribution & marketing expense | 334.7 | 280.9 | 53.8 | 19.2% |
| Gross contribution | 162.3 | 245.5 | (83.2) | (33.9)% |
| General and administrative expenses | 70.6 | 75.7 | (5.1) | (6.7)% |
| Segment profit | $91.7 | $169.8 | $(78.1) | (46.0)% |
| U.S. theatrical P&A and Premium VOD expense included in distribution and marketing expense | $232.3 | $181.1 | $51.2 | 28.3% |
| Direct operating expense as a percentage of revenue | 48.5% | 50.8% | ||
| Gross contribution as a percentage of revenue | 16.8% | 22.9% |
(1) Revenue and Segment profit of the Motion Picture segment reflect a reclassification from the former Media Networks segment to the Motion Picture segment in the nine months ended December 31, 2024 to conform to the current period presentation as described in Note 16, for the following: (i) revenue of $6.8 million; (ii) direct operating expense of $5.2 million; (iii) distribution and marketing expense of $2.2 million; and (iv) general and administration expense of $2.1 million, which resulted in gross contribution loss of $0.6 million and segment loss of $2.7 million. Additionally, the Company sold its streaming platform in India in December 2025, see Note 15 to our unaudited condensed consolidated financial statements.
Revenue. The table below sets forth Motion Picture revenue by media and product category for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Motion Picture Revenue | Nine Months Ended December 31, 2025 Lionsgate Original Releases(1) | Other Film(2) | Total | 2024 Lionsgate Original Releases(1) | Other Film(2) | Total | Total Increase (Decrease) |
|---|---|---|---|---|---|---|---|
| Theatrical | $111.2 | $6.7 | $117.9 | $87.3 | $3.8 | $91.1 | $26.8 |
| Home Entertainment | |||||||
| Digital Media | 246.2 | 141.3 | 387.5 | 265.8 | 134.5 | 400.3 | (12.8) |
| Packaged Media | 19.1 | 13.3 | 32.4 | 22.8 | 15.0 | 37.8 | (5.4) |
| Total Home Entertainment | 265.3 | 154.6 | 419.9 | 288.6 | 149.5 | 438.1 | (18.2) |
| Television | 97.2 | 19.8 | 117.0 | 211.2 | 23.8 | 235.0 | (118.0) |
| International(3) | 217.6 | 60.7 | 278.3 | 225.1 | 66.0 | 291.1 | (12.8) |
| Other | 24.0 | 7.8 | 31.8 | 8.2 | 6.6 | 14.8 | 17.0 |
| $715.3 | $249.6 | $964.9 | $820.4 | $249.7 | $1,070.1 | $(105.2) |
(1) Lionsgate Original Releases: Includes titles originally planned for a wide theatrical release by Lionsgate, including titles that have changed from a planned wide theatrical release to an initial direct-to-streaming release. These releases include films developed and produced in-house, films co-developed and co-produced and films acquired or licensed from third parties. In addition, Lionsgate Original Releases also includes multi-platform and direct-to-platform motion pictures originally released or licensed by Lionsgate, and the licensing of our original release motion picture content to other ancillary markets (location-based entertainment, games, etc.).
(2) Other Film: Includes acquired and licensed brands and libraries originally released by other parties such as third-party library product, including our titles released by acquired companies prior to our acquisition of the company (i.e., Summit Entertainment library), and titles released with our equity method investees, Roadside Attractions and Pantelion Films, and other titles.
(3) International revenue in the nine months ended December 31, 2024 reflects the reclassification of $6.8 million from the former Media Networks segment to conform to the current period presentation.
Theatrical revenue increased $26.8 million, or 29.4%, in the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024, primarily due to higher revenue from Lionsgate Original Releases of $23.9 million driven by the theatrical releases of The Housemaid, Now You See Me: Now You Don’t, Ballerina: From the World of John Wick and The Long Walk in the current period as compared to the prior year period theatrical releases.
Home entertainment revenue decreased $18.2 million, or 4.2%, in the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024, due to decreases of $12.8 million and $5.4 million in digital media and packaged media revenue, respectively, primarily driven by lower multi-platform revenue of $20.4 million, offset by higher revenue of $5.1 million from Other Films.
Television revenue decreased $118.0 million, or 50.2%, in the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024, primarily due to lower revenue from Lionsgate Original Releases of $114.0 million from the fiscal 2025 and 2026 theatrical slate titles with television windows opening in the current period, as compared to the fiscal 2025 and 2024 theatrical slate titles with television windows opening during the prior year period, which included significant revenue from The Hunger Games: The Ballad of Songbirds & Snakes.
International revenue decreased $12.8 million, or 4.4%, in the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024, due to $7.5 million and $5.3 million of lower revenue generated from Lionsgate Original Releases and Other Film revenue, respectively. Lionsgate Original Releases decreased due to lower revenue from multi-platform releases and Other Film revenue decreased due to lower revenue from our acquired libraries.
Direct Operating Expense. The decrease in direct operating expenses was due to lower Motion Picture revenue as compared to the prior year period. The decrease in direct operating expenses as a percentage of revenue is driven by the performance and costs of the titles released during the nine months ended December 31, 2025. There were no write-downs in investments in film included in Motion Picture segment direct operating expense in the nine months ended December 31, 2025, as compared to $18.8 million in the nine months ended December 31, 2024.
Distribution and Marketing Expense. The increase in distribution and marketing expense in the nine months ended December 31, 2025 was primarily due to higher theatrical P&A and Premium VOD expense associated with the theatrical slate releases in the current period. In the nine months ended December 31, 2025, approximately $24.4 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $32.0 million in the nine months ended December 31, 2024 in the Motion Picture segment.
Gross Contribution. Gross contribution of the Motion Picture segment for the nine months ended December 31, 2025 decreased as compared to the nine months ended December 31, 2024 as a result of lower Motion Picture revenue and higher distribution and marketing expenses, partially offset by lower direct operating expenses.
General and Administrative Expense. General and administrative expenses of the Motion Picture segment in the nine months ended December 31, 2025 decreased $5.1 million, or 6.7%, primarily due to a decrease in salaries and related expenses.
Television Production
The table below sets forth Television Production gross contribution and segment profit for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Television Production Segment: | Nine Months Ended December 31, 2025 | 2024 | Change Amount | Percent |
|---|---|---|---|---|
| Revenue | $790.3 | $1,062.5 | $(272.2) | (25.6)% |
| Expenses: | ||||
| Direct operating expense | 620.9 | 889.9 | (269.0) | (30.2)% |
| Distribution & marketing expense | 39.2 | 27.3 | 11.9 | 43.6% |
| Gross contribution | 130.2 | 145.3 | (15.1) | (10.4)% |
| General and administrative expenses | 36.0 | 49.3 | (13.3) | (27.0)% |
| Segment profit | $94.2 | $96.0 | $(1.8) | (1.9)% |
| Direct operating expense as a percentage of revenue | 78.6% | 83.8% | ||
| Gross contribution as a percentage of revenue | 16.5% | 13.7% |
Revenue. The table below sets forth Television Production revenue and changes in revenue by media for the nine months ended December 31, 2025 and 2024:
(Amounts in millions)
| Television Production | Nine Months Ended December 31, 2025 | 2024 Amount | Increase (Decrease) Percent | |
|---|---|---|---|---|
| Domestic Television | $410.7 | $733.1 | $(322.4) | (44.0)% |
| International | 162.1 | 144.8 | 17.3 | 11.9% |
| Home Entertainment | ||||
| Digital Media | 148.6 | 108.7 | 39.9 | 36.7% |
| Packaged Media | 2.8 | 3.0 | (0.2) | (6.7)% |
| Total Home Entertainment | 151.4 | 111.7 | 39.7 | 35.5% |
| Other | 66.1 | 72.9 | (6.8) | (9.3)% |
| $790.3 | $1,062.5 | $(272.2) | (25.6)% |
The primary component of Television Production revenue is domestic television revenue. Domestic television revenue decreased $322.4 million, or 44.0%, in the nine months ended December 31, 2025, due to a lower number of television episodes delivered in the current period as compared to the prior year period.
International revenue increased $17.3 million, or 11.9%, in the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024, primarily due to higher revenue generated internationally from episodes delivered in the current period as compared to episodes delivered in the prior period.
Home entertainment revenue increased $39.7 million, or 35.5%, in the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024, primarily due to higher digital media revenue from the delivery of The Chosen Season 5 and Ghosts Season 4 in the current period.
Direct Operating Expense. Direct operating expense of the Television Production segment in the nine months ended December 31, 2025 decreased $269.0 million, or 30.2% due to the decrease in Television Production revenues. Direct operating expenses as a percentage of television production revenue decreased primarily due to the mix of titles generating revenue in the current period as compared to the prior year period.
Gross Contribution. Gross contribution of the Television Production segment for the nine months ended December 31, 2025 decreased as compared to the nine months ended December 31, 2024, due to lower Television Production revenue and higher distribution and marketing expenses, partially offset by lower direct operating expenses.
General and Administrative Expense. General and administrative expenses of the Television Production segment decreased by $13.3 million, or 27.0% as compared to the nine months ended December 31, 2024, primarily due to a decrease in salaries and related expenses.
LIQUIDITY AND CAPITAL RESOURCES
Sources of Cash
Our liquidity and capital requirements in the nine months ended December 31, 2025 were provided principally through cash generated from operations, corporate debt, our film related obligations (as further discussed below), and the monetization of trade accounts receivable. As of December 31, 2025, we had cash and cash equivalents of $182.4 million.
As discussed in Starz Separation, on May 6, 2025 the Starz Separation was completed and as a result the pre-transaction shareholders of Old Lionsgate own shares in two separately traded public companies: (1) New Lionsgate, which was renamed “Lionsgate Studios Corp.” and holds, directly and through subsidiaries, the Studio Business previously held by Old Lionsgate, and is owned by Old Lionsgate shareholders and Legacy Lionsgate Studios shareholders, and (2) Old Lionsgate, which was renamed “Starz Entertainment Corp.” and holds, directly and through subsidiaries, the Starz Business that was previously held by Old Lionsgate.
In connection with the Starz Separation, all outstanding obligations in respect of principal, interest and fees under the Old Lionsgate credit and guarantee agreement dated December 8, 2016, as amended (the “Old Lionsgate Credit Agreement”), were repaid in full and all commitments thereunder were terminated. The Company entered into a new credit agreement (the “Lionsgate Credit Agreement”) which provides for an $800.0 million senior secured revolving credit facility, which may be increased up to $1,200.0 million. The Company also assumed the Senior Notes and pursuant to the terms thereof, the Company assumed and agreed to perform as primary obligor all obligations of the initial issuer under the Senior Notes and the initial issuer, a wholly-owned subsidiary of Starz Entertainment Corp. was released and discharged.
Corporate Debt
Our corporate debt as of December 31, 2025, excluding film related obligations discussed further below, consisted of the following:
- Lionsgate Credit Agreement: We have an $800.0 million revolving credit facility ($30.0 million outstanding as of December 31, 2025), which may be increased to a total amount not in excess of $1,200.0 million, subject to the terms and conditions set forth therein. We maintain significant availability under our Revolving Credit Facility, which is currently used to meet our short-term liquidity requirements, and could also be used for longer term liquidity requirements.
- Senior Notes: We have $389.9 million outstanding of 6.0% senior notes due 2030 (the “Senior Notes”).
- eOne IP Credit Facility: In July 2024, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the “eOne IP Credit Facility”) based on and secured by the Company’s intellectual property rights primarily associated with certain titles acquired as part of the eOne acquisition. The maximum principal amount of the eOne IP Credit Facility is $340.0 million, subject to the amount of collateral available, which is based on the valuation of unsold rights from the libraries, with $294.9 million outstanding as of December 31, 2025. The eOne IP Credit Facility matures on July 3, 2029.
- LG IP Credit Facility. In September 2024, as amended in November 2024, December 2024, March 2025, June 2025 and September 2025, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the “LG IP Credit Facility”) based on and secured by the Company’s intellectual property rights primarily associated with certain titles. The maximum principal amount of the LG IP Credit Facility is $1,250.0 million as of December 31, 2025 subject to the amount of collateral available, which is based on the valuation of unsold rights from the libraries. As of December 31, 2025, $1,218.8 million was outstanding under the LG IP Credit Facility. The LG IP Credit Facility matures on September 30, 2029.
- 3 Arts Credit Facility. On May 29, 2025 in preparation for the A & A purchase (see Note 3 to our unaudited condensed consolidated financial statements), 3 Arts entered into a $50.0 million senior secured credit facility (the “3 Arts Credit Facility”) based on and secured by a security interest in substantially all of the assets of 3 Arts and guarantors as defined in the 3 Arts Credit Facility, subject to certain exceptions. As of December 31, 2025, $30.6 million was outstanding under the 3 Arts Credit Facility. Advances under the 3 Arts Credit Facility are payable at maturity, which is on May 29, 2029. As of December 31, 2025, there was $19.4 million available under the 3 Arts Credit Facility.
See Note 7 to our unaudited condensed consolidated financial statements for discussion of our corporate debt.
Film Related Obligations
We utilize our film related obligations to fund our film and television productions. Our film related obligations as of December 31, 2025 include the following:
- Production Loans: Production loans represent individual and multi-title loans for the production of film and television programs that the Company produces. The majority of the Company’s production loans have contractual repayment dates either at or near the expected completion or release dates, with the exception of certain loans containing repayment dates on a longer term basis. As of December 31, 2025, there was $1,471.9 million outstanding under the production loans.
- Production Tax Credit Facility: As of December 31, 2025, we had a $380.0 million non-recourse senior secured revolving credit facility due January 2028 based on and secured by collateral consisting solely of certain of the Company’s tax credit receivables (the “Production Tax Credit Facility”). Cash collections from the tax credit receivables are used to repay outstanding borrowings under the facility. As of December 31, 2025, $402.2 million in tax credit receivables served as collateral and $46.9 million remained available for borrowing. As of December 31, 2025, there was $333.1 million outstanding under the Production Tax Credit Facility.
- Film Library Facility: In July 2021, as amended in September 2022, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the “Film Library Facility”). The facility was collateralized exclusively by the Company’s rights in certain acquired film library titles. The maximum principal amount available under the Film Library Facility was $161.9 million, subject to the valuation of eligible collateral, which was based on projected cash flows from the libraries. During the nine months ended December 31, 2025, the outstanding balance of $59.7 million was fully repaid and all commitments were terminated.
- Backlog Facility and Other:
- Backlog Facility. In March 2022, as amended in June 2025, certain subsidiaries of the Company entered into a committed secured revolving credit facility (the “Backlog Facility”) based on and secured by collateral consisting solely of certain of the Company’s fixed fee or minimum guarantee contracts where cash will be received in the future. The maximum principal amount of the Backlog Facility as of December 31, 2025 is $175.0 million, subject to the amount of eligible collateral contributed to the facility. The Backlog Facility revolving period ends on May 30, 2028, at which point cash collections from the underlying collateral is used to repay the facility. The facility maturity date is up to 2 years, 90 days after the revolving period ends, currently August 28, 2030. As of December 31, 2025, there was $146.9 million outstanding under the Backlog Facility.
- Other. The Company has other loans, which are secured by accounts receivable and contracted receivables which are not yet recognized as revenue under certain licensing agreements. Outstanding loan balances under these “other” loans must be repaid with any cash collections from the underlying collateral if and when received by the Company and may be voluntarily repaid at any time without prepayment penalty fees. As of December 31, 2025, there was $111.5 million outstanding under the “other” loans, with remaining contractual repayment dates in April 2026, July 2026 and December 2027. As of December 31, 2025, accounts receivable amounting to $67.0 million and contracted receivables not yet reflected as accounts receivable on the balance sheet as of December 31, 2025 amounting to $60.4 million represented collateral related to the “other” loans.
See Note 8 to our unaudited condensed consolidated financial statements for discussion of our film related obligations.
Accounts Receivable Monetization and Governmental Incentives
Our accounts receivable monetization programs include individual agreements to monetize certain of our trade accounts receivable directly with third-party purchasers.
In addition, we utilize governmental incentives, programs and other structures from states and foreign countries (e.g., sales tax refunds, transferable tax credits, refundable tax credits, low interest loans, direct subsidies or cash rebates, calculated based on the amount of money spent in the particular jurisdiction in connection with the production) to fund our film and television productions and reduce financial risk.
See Note 19 to our unaudited condensed consolidated financial statements for our accounts receivable monetization programs and our tax credit receivables.
Uses of Cash
Our principal uses of cash in operations include the funding of film and television productions, film rights acquisitions, the distribution and marketing of films and television programs, and general and administrative expenses. We also use cash for debt service (i.e., principal and interest payments) requirements, equity method or other equity investments, quarterly cash dividends when declared, the purchase of common shares under our share repurchase program, capital expenditures, and acquisitions of or investment in businesses.
In addition, the Company has a redeemable noncontrolling interest balance of $113.7 million as of December 31, 2025 related to 3 Arts Entertainment, A & A Management and other and $89.4 million included in other liabilities, noncurrent, representing the compensatory portion of the 3 Arts Entertainment noncontrolling interest, which may require the use of cash in the event the holders of the noncontrolling interests require us to repurchase their interests (see Note 10 to our unaudited condensed consolidated financial statements).
We may from time to time seek to retire or purchase or refinance our outstanding debt through cash purchases, and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, refinancings, or otherwise. Such repurchases or exchanges or refinancings, if any, will depend on prevailing market conditions, our liquidity requirements, our assessment of opportunities to lower interest expense, contractual restrictions and other factors, and such repurchases, or exchanges could result in a charge from the early extinguishment of debt. The amounts involved may be material.
Anticipated Cash Requirements. The nature of our business is such that significant initial expenditures are required to produce, acquire, distribute and market films and television programs, while revenues from these films and television programs are earned over an extended period of time after their completion or acquisition. In addition to the cash requirements of any potential future redemption of our noncontrolling interests as discussed above, which we may fund with a combination of cash on hand, borrowings under our line of credit and/or new financing arrangements, we have other anticipated cash requirements outside of our normal operations.
In the short-term, we currently expect that our cash requirements for productions will be consistent, and our marketing spend will increase in fiscal 2026 as compared to fiscal 2025.
However, we currently believe that cash flow from operations, cash on hand, revolving credit facility availability, the monetization of trade accounts receivable, tax-efficient financing, the availability from other financing obligations and available production or intellectual property financing, will be adequate to meet known operational cash and debt service (i.e. principal and interest payments) requirements for the next 12 months and beyond, including the funding of future film and television production, film rights acquisitions and theatrical and home entertainment release schedules, and future equity method or other investment funding requirements. We monitor our cash flow liquidity, availability, fixed charge coverage, capital base, film spending and leverage ratios with the long-term goal of maintaining our credit worthiness.
Our current financing strategy is to fund operations and to leverage investment in films and television programs in the short-term and long-term through our cash flow from operations, our revolving credit facility, eOne IP Credit Facility, LG IP Credit Facility, 3 Arts Credit Facility, production loans, government incentive programs, the monetization of trade accounts receivable, our Production Tax Credit Facility, our Backlog Facility, and other obligations. In addition, we may acquire businesses or assets, including individual films or libraries that are complementary to our business. Any such transaction could be financed through our cash flow from operations, credit facilities, equity or debt financing. If additional financing beyond our existing cash flows from operations and credit facilities cannot fund such transactions, there is no assurance that such financing will be available on terms acceptable to us. Our ability to obtain any additional financing will depend on, among other things, our business plans, operating performance, the condition of the capital markets at the time we seek financing, and short and long-term debt ratings assigned by independent rating agencies. Additionally, circumstances related to inflation and rising interest rates and ongoing disruptions in financial markets and in commercial activity generally related to changes in monetary and fiscal policy, tariffs, United States political developments, geopolitical events and other sources of instability, could make financing more difficult and/or expensive, and we may not be able to obtain such financing. We may also dispose of businesses or assets, including individual films or libraries, and use the net proceeds from such dispositions to fund operations or such acquisitions, or to repay debt.
Material Cash Requirements from Known Contractual and Other Obligations. Our material cash requirements from known contractual and other obligations primarily relate to our corporate debt and film related obligations. The following table sets forth our significant contractual and other obligations as of December 31, 2025 and the estimated timing of payment:
(Amounts in millions)
| Future annual repayment of debt and other obligations recorded as of December 31, 2025 (on-balance sheet arrangements) Corporate debt(1): | Total | Next 12 Months | Beyond 12 Months |
|---|---|---|---|
| Revolving Credit Facility | $30.0 | $— | $30.0 |
| Senior Notes | 389.9 | — | 389.9 |
| eOne IP Credit Facility | 294.9 | 34.0 | 260.9 |
| LG IP Credit Facility | 1,218.8 | 125.0 | 1,093.8 |
| 3 Arts Credit Facility | 30.6 | — | 30.6 |
| Film related obligations(2) | 2,063.4 | 1,214.0 | 849.4 |
| Content related payables(3) | 21.4 | 20.6 | 0.8 |
| Operating lease obligations | 314.1 | 44.0 | 270.1 |
| 4,363.1 | 1,437.6 | 2,925.5 | |
| Contractual commitments by expected repayment date (off-balance sheet arrangements) | |||
| Film related obligations commitments(4) | 318.1 | 93.9 | 224.2 |
| Interest payments(5) | 478.9 | 183.5 | 295.4 |
| Other contractual obligations | 362.5 | 67.8 | 294.7 |
| 1,159.5 | 345.2 | 814.3 | |
| Total future repayment of debt and other commitments under contractual obligations (6) | $5,522.6 | $1,782.8 | $3,739.8 |
(1) See Note 7 to our unaudited condensed consolidated financial statements for further information on our corporate debt.
(2) See Note 8 to our unaudited condensed consolidated financial statements for further information on our film related obligations.
(3) Content related payables include minimum guarantees and accrued licensed program rights obligations included on our consolidated balance sheet, which represent amounts payable for film or television rights that we have acquired or licensed.
(4) Film related obligations commitments include distribution and marketing commitments, minimum guarantee commitments, and production loan commitments not reflected on the consolidated balance sheets as they did not then meet the criteria for recognition.
(5) Includes cash interest payments on our corporate debt and film related obligations, based on the applicable SOFR interest rates at December 31, 2025, net of payments and receipts from the Company’s interest rate swaps, and excluding the interest payments on the revolving credit facility as future amounts are not fixed or determinable due to fluctuating balances and interest rates.
(6) Not included in the amounts above are $89.4 million included in other liabilities, noncurrent representing the compensatory portion of the 3 Arts Entertainment noncontrolling interest and $87.5 million of redeemable noncontrolling interest, as future amounts and timing are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimations of future payments (see Note 10 to our unaudited condensed consolidated financial statements).
For additional details of contingencies, see Note 17 to our unaudited condensed consolidated financial statements.
Discussion of Operating, Investing, Financing Cash Flows
Cash, cash equivalents and restricted cash decreased by $45.9 million for the nine months ended December 31, 2025 and decreased by $113.6 million for the nine months ended December 31, 2024, before foreign exchange effects on cash. Components of these changes are discussed below in more detail.
Operating Activities. Cash flows used in operating activities attributable to continuing operations for the nine months ended December 31, 2025 and 2024 were as follows:
(Amounts in millions)
| Nine Months Ended December 31, 2025 | 2024 | Net Change | |
|---|---|---|---|
| Net Cash Flows Used In Operating Activities - Continuing Operations | $(321.7) | $(345.6) | $(23.9) |
Cash flows used in operating activities attributable to continuing operations for the nine months ended December 31, 2025 were $321.7 million compared to cash flows used in operating activities attributable to continuing operations of $345.6 million for the nine months ended December 31, 2024. The decrease in cash used in operating activities is primarily due to lower cash flows generated from operating activities before changes in operating assets and liabilities of $48.5 million. The change in operating assets and liabilities included lower cash used for investment in film and television programs, decreases in other assets and increases in accounts payable and accrued liabilities, offset by lower proceeds from accounts receivable and lower increases in deferred revenue.
Investing Activities. Cash flows used in investing activities attributable to continuing operations for the nine months ended December 31, 2025 and 2024 were as follows:
(Amounts in millions)
| Nine Months Ended December 31, 2025 | 2024 | |
|---|---|---|
| Acquisition of businesses, net of cash acquired (see Note 3) | $(29.4) | $— |
| Net proceeds from purchase price adjustments for eOne acquisition | — | 12.0 |
| Proceeds from the sale of equity method investments | 34.0 | 1.5 |
| Investment in equity method investees and other | (2.3) | (2.0) |
| Distributions from equity method investees and other | 0.3 | — |
| Acquisition of assets (film library and related assets) | — | (35.0) |
| Capital expenditures | (9.7) | (9.9) |
| Repayment of loans receivable | — | 0.8 |
| Net Cash Flows Used In Investing Activities - Continuing Operations | $(7.1) | $(32.6) |
Cash flows used in investing activities attributable to continuing operations were $7.1 million for the nine months ended December 31, 2025 compared to cash flows used in investing activities attributable to continuing operations of $32.6 million for the nine months ended December 31, 2024. The decrease was primarily due to proceeds from the sale of our equity method investment in Spyglass, partially offset by cash used for the acquisition of A&A in the current period, as compared to the cash used for the acquisition of a film library and related assets, partially offset by proceeds from the settlement of certain working capital items pursuant to the Purchase Agreement for eOne in the prior year period.
Financing Activities. Cash flows provided by financing activities attributable to continuing operations for the nine months ended December 31, 2025 and 2024 were as follows:
(Amounts in millions)
| Nine Months Ended December 31, 2025 | 2024 | |
|---|---|---|
| Debt - borrowings, net of debt issuance and redemption costs | $2,331.6 | $3,557.7 |
| Debt - repurchases and repayments | (2,396.3) | (3,493.0) |
| Net borrowings (repayments) of debt | (64.7) | 64.7 |
| Film related obligations - borrowings | 2,085.2 | 1,494.9 |
| Film related obligations - repayments | (2,033.9) | (1,582.4) |
| Net borrowings (repayments) of film related obligations | 51.3 | (87.5) |
| Cash settlement in connection with Starz Separation refinancing (see Note 7) | 262.8 | — |
| Sale of noncontrolling interest in Legacy Lionsgate Studios Corp. (see Note 3) | (3.5) | 281.7 |
| Purchase of noncontrolling interest | — | (7.4) |
| Tax withholding required on equity awards | (13.4) | (28.7) |
| Other financing activities | (3.6) | (6.0) |
| Net Cash Flows Provided By Financing Activities - Continuing Operations | $228.9 | $216.8 |
Cash flows provided by financing activities attributable to continuing operations were $228.9 million for the nine months ended December 31, 2025 compared to cash flows provided by financing activities attributable to continuing operations of $216.8 million for the nine months ended December 31, 2024. Cash flows provided by financing activities attributable to continuing operations for the nine months ended December 31, 2025 primarily reflect a net cash settlement received in connection with the Starz Separation refinancing of $262.8 million, partially offset by total net repayments of $13.4 million related to debt and film obligations and tax withholdings required on equity awards of $13.4 million. Cash used for other financing activities of $3.6 million primarily represents distributions to noncontrolling interests.
Cash flows provided by financing activities attributable to continuing operations of $216.8 million for the nine months ended December 31, 2024 primarily reflect net proceeds from the sale of a noncontrolling interest in Legacy Lionsgate Studios of $281.7 million, partially offset by tax withholdings required on equity awards of $28.7 million and total net repayments of $22.8 million related to debt and film obligations The net repayments include the prepayments of $84.9 million and $214.1 million of the principal accrued and unpaid interest of Term Loan A and Term Loan B, respectively. Cash used for other financing activities of $6.0 million primarily represents distributions to noncontrolling interests.
Remaining Performance Obligations and Backlog
Remaining performance obligations represent deferred revenue on the balance sheet plus fixed fee or minimum guarantee contracts where the revenue will be recognized and the cash received in the future (i.e., backlog). As disclosed in Note 11 to our unaudited condensed consolidated financial statements, remaining performance obligations were $2.0 billion at December 31, 2025 (March 31, 2025 - $1.5 billion). The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.5 billion at December 31, 2025 (March 31, 2025 - $1.1 billion).
Market risk
As filed, 7,188 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Currency and Interest Rate Risk Management
Market risks relating to our operations result primarily from changes in interest rates and changes in foreign currency exchange rates. Our exposure to interest rate risk results from the financial debt instruments that arise from transactions entered into during the normal course of business. As part of our overall risk management program, we evaluate and manage our exposure to changes in interest rates and currency exchange risks on an ongoing basis. Hedges and derivative financial instruments will continue to be used in the future in order to manage our interest rate and currency exposure. We have no intention of entering into financial derivative contracts, other than to hedge a specific financial risk. See Note 18 to our unaudited condensed consolidated financial statements for additional information on our financial instruments, and “Quantitative and Qualitative Disclosures About Market Risk” found in exhibit 99.1 to Legacy Lionsgate Studios’ Form 10-K.
Currency Rate Risk. We enter into forward foreign exchange contracts to hedge our foreign currency exposures on future production expenses denominated in various foreign currencies. These contracts are entered into with major financial institutions as counterparties. We are exposed to credit loss in the event of nonperformance by the counterparty, which is limited to the cost of replacing the contracts at current market rates. We do not require collateral or other security to support these contracts.
Interest Rate Risk. At December 31, 2025, we had interest rate swap agreements to fix the interest rate on $886.8 million of variable rate SOFR-based debt. The difference between the fixed rate to be paid and the variable rate received under the terms of the interest rate swap agreements will be recognized as interest expense for the related debt. Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows.
Certain of our borrowings, primarily borrowings under our revolving credit facility, eOne IP Credit Facility, LG IP Credit Facility, and 3 Arts Credit Facility and our film related obligations are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. The applicable margin with respect to loans under the revolving credit facility is at LGTV’s option, at either (i) Term SOFR (subject to a 0.00% floor) or (ii) a base rate, in each case plus a margin. The applicable margin is 2.50% for SOFR loans and 1.50% for base rate loans. Advances under the eOne IP Credit Facility and LG IP Credit Facility bear interest at a rate equal to Term SOFR plus 2.25% per annum. Advances under the 3 Arts Credit Facility bear interest at a rate per annum equal to, at the borrower’s option, either Term SOFR or a base rate, in each case plus a margin of 2.50% for SOFR loans and 1.50% for base rate loans. Assuming the revolving credit facility is drawn up to its maximum borrowing capacity of $800.0 million, based on the applicable SOFR in effect as of December 31, 2025, each quarter point change in interest rates would result in a $3.6 million change in annual net interest expense on the revolving credit facility, eOne IP Credit Facility, LG IP Credit Facility, 3 Arts Credit Facility and interest rate swap agreements.
The variable interest film related obligations (which includes our production loans, Production Tax Credit Facility, Backlog Facility and others) incur primarily SOFR-based interest, with applicable margins ranging from 1.00% to 4.50% per annum. A quarter point increase of the interest rates on the variable interest film related obligations would result in $3.7 million in additional costs capitalized to the respective film or television asset for production loans, and a $1.5 million change in annual net interest expense (based on the outstanding principal amount of such loans).
As of December 31, 2025, our Senior Notes had an outstanding carrying value of $382.8 million, and an estimated fair value of $368.4 million. A 1% increase in the level of interest rates would decrease the fair value of the Senior Notes by approximately $13.3 million, and a 1% decrease in the level of interest rates would increase the fair value of the Senior Notes by approximately $13.9 million.
The following table presents information about our financial instruments that are sensitive to changes in interest rates. The table also presents the cash flows of the principal amounts of the financial instruments, or the cash flows associated with the notional amounts of interest rate derivative instruments, and related weighted-average interest rates by expected maturity or required principal payment dates and the fair value of the instrument as of December 31, 2025:
(Amounts in millions)
| Variable Rates: | Three Months Ending March 31, 2026 | Year Ending March 31, 2027 | 2028 | 2029 | 2030 | Thereafter | Total | Fair Value December 31, 2025 |
|---|---|---|---|---|---|---|---|---|
| Revolving Credit Facility(1) | $— | $— | $— | $— | $— | $30.0 | $30.0 | $30.0 |
| Average Interest Rate | —% | —% | —% | —% | —% | 6.19% | ||
| eOne IP Credit Facility(1) | $8.5 | $34.0 | $34.0 | $34.0 | $184.4 | $— | $294.9 | $294.9 |
| Average Interest Rate | 5.94% | 5.94% | 5.94% | 5.94% | 5.94% | —% | ||
| LG IP Credit Facility(1) | $31.3 | $125.0 | $125.0 | $125.0 | $812.5 | $— | $1,218.8 | $1,218.8 |
| Average Interest Rate | 5.94% | 5.94% | 5.94% | 5.94% | 5.94% | —% | ||
| 3 Arts Credit Facility(1) | $— | $— | $— | $— | $30.6 | $— | $30.6 | $30.6 |
| Average Interest Rate | —% | —% | —% | —% | 6.19% | —% | ||
| Film related obligations(2) | $590.4 | $848.4 | $582.7 | $— | $— | $41.9 | $2,063.4 | $2,063.4 |
| Average Interest Rate | 5.80% | 5.21% | 5.31% | —% | —% | 4.94% | ||
| Fixed Rates: | ||||||||
| Senior Notes | $— | $— | $— | $— | $— | $389.9 | $389.9 | $368.4 |
| Interest Rate | —% | —% | —% | —% | —% | 6.00% | ||
| Interest Rate Swaps(3) | ||||||||
| Variable to fixed notional amount | $— | $706.0 | $180.8 | $— | $— | $— | $886.8 | $(4.4) |
(1) The effective interest rate in the table above is before the impact of interest rate swaps.
(2) Represents amounts outstanding under film related obligations (i.e., production loans, Production Tax Credit Facility, Backlog Facility and other), actual amounts outstanding and the timing of expected future repayments may vary in the future (see Note 8 to our unaudited condensed consolidated financial statements for further information).
(3) Represents interest rate swap agreements on certain of our SOFR-based floating-rate debt with fixed rates paid ranging from 3.45% to 4.10% with maturities from August 2026 to June 2027. See Note 18 to our unaudited condensed consolidated financial statements.
Controls and procedures
As filed, 1,856 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Evaluation of Disclosure Controls and Procedures
The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within required time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of December 31, 2025, the end of the period covered by this report, the Company carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that such controls and procedures were effective as of December 31, 2025.
Changes in Internal Control over Financial Reporting
As required by Rule 13a-15(d) of the Exchange Act, the Company, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, has evaluated whether any changes occurred to the Company’s internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, such control. Based on that evaluation, there has been no such change during the quarter ended December 31, 2025.
Risk factors
As filed, 815 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025 and Part II, Item 1A of the Company’s Form 10-Q for the first quarter ended June 30, 2025, in each case under the heading “Risk Factors.” Except for the risk factors disclosed in Part II, Item 1A of the Company’s Form 10-Q for the first quarter ended June 30, 2025, which is hereby incorporated by reference into this Part II, Item 1A of this Form 10-Q, there have been no other material changes to the Company’s risk factors previously reported in the Company’s Form 10-K for the fiscal year ended March 31, 2025.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2025-12-31. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2025-10-01 to 2025-12-31 | $724.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months2025-04-01 to 2025-12-31 | $1.73bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months2025-10-01 to 2025-12-31 | $36.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months2025-04-01 to 2025-12-31 | −$20.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months2025-10-01 to 2025-12-31 | $65.0m | us-gaap:InterestExpense |
| Interest expense | 9 months2025-04-01 to 2025-12-31 | $200.9m | us-gaap:InterestExpense |
| Income tax | 3 months2025-10-01 to 2025-12-31 | $6.7m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months2025-04-01 to 2025-12-31 | $14.9m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2025-10-01 to 2025-12-31 | −$46.2m | us-gaap:NetIncomeLoss |
| Net income | 9 months2025-04-01 to 2025-12-31 | −$268.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2025-10-01 to 2025-12-31 | −$0.16 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months2025-04-01 to 2025-12-31 | −$0.95 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2025-10-01 to 2025-12-31 | −$0.16 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months2025-04-01 to 2025-12-31 | −$0.95 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2025-10-01 to 2025-12-31 | 290,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months2025-04-01 to 2025-12-31 | 283,900,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months2025-04-01 to 2025-12-31 | −$243.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months2025-04-01 to 2025-12-31 | $9.7m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | At period end2025-12-31 | $182.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2025-12-31 | $1.32bn | us-gaap:AssetsCurrent |
| Total assets | At period end2025-12-31 | $5.24bn | us-gaap:Assets |
| Current liabilities | At period end2025-12-31 | $2.87bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | At period end2025-12-31 | $6.38bn | us-gaap:Liabilities |
| Long-term debt | At period end2025-12-31 | $1.76bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | At period end2025-12-31 | $159.0m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | At period end2025-12-31 | −$1.28bn | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0002052959-26-000014. Last ingested by Listed: Oct 29, 2026, 16:08 ET. Listed shows no prices and gives no investment advice.