Lionsgate revenue drops 8% in June quarter, Starz loses 500,000 subscribers

Lionsgate, still reeling from the negative effects of last year’s two Hollywood strikes, reported a drop in revenue while narrowing its net loss for the June quarter as its Starz division shed 500,000 subscribers.

Revenue for the quarter was $834.7 million, down 8%. The company reported a net loss of $59.4 million, which translates to a loss of 25 cents per share, an improvement from a net loss of $70.7 million in the same period last year. Wall Street analysts on average forecast revenues of $857.5 million and a loss of 18 cents per share.

Lionsgate’s operating income was $18.8 million, compared to an operating loss of $16.8 million a year ago.

“We are pleased to report a solid quarter despite unprecedented industry disruption and the fallout from the strikes,” said Jon Feltheimer, CEO of Lionsgate and Lionsgate Studios, in announcing the results. “Our Motion Picture Group, Starz and our library performed well, although financial results in our television segment reflected a severely down year. Importantly, we generated significant momentum during and after the quarter by taking a number of steps toward full separation by the end of the calendar year, subject to the timing of normal regulatory approvals.”

Lionsgate’s Motion Picture segment revenue fell 15% to $347.3 million and segment profit rose 24% to $86.1 million. The company praised the strong box office of the horror film “The Strangers: Chapter 1” (pictured above) along with ‘robust’ home entertainment results from several theatrical titles, and lower P&A spend and content write-offs. The year-over-year revenue decline was due to the “difficult comparison” with the prior year quarter, which included theatrical revenue from “John Wick: Chapter Four,” the company said.

The company’s studio operations, consisting of its film and TV production segments, reported revenues of $588.4 million, down 5.9% from the prior year quarter. Adjusted operating income of $58.3 million decreased 5.5% from the prior year quarter. Television production revenue rose 10% to $241.1 million, while segment profit fell 53% to $10.7 million. Revenue growth was driven by contributions from eOne, while segment profit growth was impacted by the strike’s continued impact on delivery timing in a severely underperformed year, Lionsgate said.

The company’s Starz business posted revenue of $345.3 million, up 1%, and segment profit grew 54% to $58.5 million. Revenue growth was driven by a price increase in June 2023 and year-over-year OTT subscriber growth, partially offset by linear declines. The number of North American streaming subscribers fell by 180,000 in the quarter, while Starz’s total subscribers fell by 500,000 sequentially. Earlier this week, Starz notified US customers of a one-dollar increase in the monthly cost of the service.

Earlier this week it was announced that Lionsgate Television is developing a TV series sequel to the successful ‘John Wick’ film franchise. In June, Lionsgate said it would release the film adaptation of “Hunger Games” author Suzanne Collins’ next book, “Sunrise on the Reaping,” in November 2026. The studio’s other major franchises are the Saw and Twilight films.

The company consists of two entities: Lionsgate and Lionsgate Studios. Lionsgate Studios debuted as a standalone public entity under the Nasdaq ticker symbol LION on May 14, marking a step toward completely separating its studio operations from the Starz TV network and streaming operations. Through its merger with special purpose acquisition company Screaming Eagle Acquisition Corp. Lionsgate Studios raised $350 million from a group of investors. The company expects the complete separation of Lionsgate Studios and Lionsgate (i.e. Starz) to occur by the end of calendar year 2024.