Lionsgate (NYSE: LGF.A, LGF.B) today reported third quarter (quarter ended December 31, 2022) revenue of $1.0 billion, operating income of $7.8 million and net income attributable to Lionsgate shareholders of $16.6 million or $0.07 diluted net earnings per share on 230.1 million diluted weighted average common shares outstanding. Adjusted net income attributable to Lionsgate shareholders in the quarter was $59.3 million or $0.26 adjusted diluted net earnings per share on 230.1 million diluted weighted average common shares outstanding, with adjusted OIBDA of $167.8 million.
“We reported a strong financial quarter with record trailing 12-month library revenues affirming the value of our intellectual properties,” said Lionsgate CEO Jon Feltheimer. “We enter our fourth quarter with encouraging signs across all of our businesses: a rebounding domestic box office just as we bring our biggest slate in years to theatres; renewals of six key Lionsgate Television series during or immediately after the close of the quarter; and improved STARZ economics due to its international reorganization.”
Revenue from Lionsgate’s 17,000-title film and television library rose to a record $845 million for the trailing 12 months. Lionsgate ended the quarter with $425 million in available cash and an undrawn revolving credit facility of $1.25 billion. During the quarter, the Company purchased $124 million of its bonds for $82 million, a $42 million reduction in its net debt. In addition, during the quarter the Company sold a partial interest in STARZPLAY Arabia and recognized a $43 million cash gain.
Third Quarter Results
Segment Results
Media Networks segment revenue of $380.3 million compared to $388.9 million in the prior year quarter. Segment revenue reflected growth in domestic streaming revenue and LIONSGATE+ (previously “STARZPLAY International”) revenue partially offset by lower domestic linear revenue. Segment profit increased to $49.5 million compared to segment profit of $28.5 million in the prior year quarter, driven by lower domestic marketing costs and an improved international cost structure. Total global subscribers, including STARZPLAY Arabia (a non-consolidated equity method investee), decreased sequentially to 37.2 million, driven by linear and OTT pressures domestically. Excluding the international subscribers in the seven markets that LIONSGATE+ is exiting, total global subscribers were up 2.9% year-over-year but down sequentially to 28.7 million.
During the quarter, as part of our global assessment and curation of our Media Networks cost structure and content strategy, we recognized an $80.8 million restructuring charge primarily associated with our Domestic Media Networks’ decision to remove certain series from its service.
The Studio Business, comprised of the Motion Picture and Television Production segments, reported revenue of $894.2 million, an increase of 25% from $713.9 million in the prior year quarter. Segment profit of $148.0 million increased by 71% from $86.8 million in the prior year quarter. The year-over-year increase in revenue and segment profit was driven primarily by strong library sales and the timing of scripted content deliveries.
Motion Picture segment revenue increased by 5% to $288.8 million compared to $275.3 million in the prior year quarter. Segment profit increased by 13% to $76.5 million compared to $67.5 million in the prior year quarter. Motion Picture revenue and segment profit growth represented strength in our multi-platform and direct-to-platform businesses, and segment profit growth also reflected favorable foreign exchange rates.
Television Production segment revenue increased by 38% to $605.4 million compared to $438.6 million in the prior year quarter. Segment profit increased by 270% to $71.5 million compared to $19.3 million in the prior year quarter. The revenue and segment profit increases were driven by growth in content deliveries to Media Networks and third parties as well as strength in library sales.
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2023 third quarter results at 5:00 PM ET/2:00 PM PT this afternoon, February 9.Interested parties may listen to the live webcast by visiting the events page on the Lionsgate Investor Relations website or via https://event.choruscall.com/mediaframe/webcast.html?webcastid=rinWrWoV. A full replay will become available this evening by clicking the same link.
