STARZ returned to domestic OTT subscriber growth with a gain of 200K domestic OTT subscribers in the quarter. It will exit the U.K. market by March 31, 2024 as it focuses on growing its domestic business. The Company took $876 million in charges related to Media Networks in the quarter, including a $212 million restructuring charge from its exit of the U.K. and Latin American markets and the write-off of non-core series domestically as well as a $664 million non-cash goodwill and trade name impairment charge.
“We had a strong financial quarter with another robust library performance and segment profit growth across our film, television and STARZ businesses,” said Lionsgate CEO Jon Feltheimer. “We are reaffirming our guidance for the full year, even with the negative impact of the strike. We are moving toward the close of an eOne acquisition that we believe will strengthen our studio business on a standalone basis. At STARZ, the reorganization, restructuring and overhead reduction reflect our focus on preparing the service to thrive as a profitable and successful standalone company.”
Trailing 12-month revenue from Lionsgate’s film and television library was up 17%. Lionsgate ended the quarter with $224 million in available cash and an undrawn revolving credit facility of $1.25 billion. Studio backlog from the Motion Picture and Television Production segments was $1.5 billion at September 30, 2023.
Second Quarter Results
Segment Profit Grew Across the Studio and Media Networks Businesses
The Studio Business, comprised of the Motion Picture and Television Production segments, reported revenue of $789.8 million, an increase of 21% from $654.9 million in the prior year quarter. Segment profit of $130.7 million increased by 89% from $69.1 million in the prior year quarter.
Motion Picture segment revenue increased by 77% to $395.9 million compared to $224.0 million in the prior year quarter. Segment profit increased by 22% to $67.5 million compared to $55.5 million in the prior year quarter. Motion Picture revenue growth was driven by strength in John Wick: Chapter Four home entertainment as well as the impact of carryover profits from theatrical wide releases in the first six months of fiscal 2024 compared to fiscal 2023. Segment profit growth was driven by continued library strength.
Television Production segment revenue decreased 9% to $393.9 million while segment profit increased significantly to $63.2 million compared to $13.6 million in the prior year quarter. The revenue decline was driven by the strikes’ impact on episodic deliveries, while the segment profit growth was driven by the delivery of the John Wick prequel event series The Continental to Peacock and Amazon Prime Video.
Media Networks segment revenue was up 5% year-over-year to $416.5 million compared to $396.1 million in the prior year quarter. Segment revenue was driven by growth in domestic streaming revenue and LIONSGATE+ revenue, partially offset by lower domestic linear revenue. Segment profit grew to $66.6 million compared to $21.0 million in the prior year quarter, driven by a significant improvement in LIONSGATE+ segment profit due to accelerated revenue recognition associated with minimum guarantees from LIONSGATE+’s bundling partner in Latin America. Domestic OTT subscribers returned to growth in the quarter (+200K) and total global OTT subscribers increased by 480K sequentially on a pro forma basis.
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2024 second quarter results today, November 9th, at 5:00 PM ET/2:00 PM PT. Interested parties may listen to the live webcast by visiting the events page on the Lionsgate Investor Relations website or via the following link. A full replay will become available this evening by clicking the same link.
