Company Separation and Structure - Starz Entertainment Corp. completed the separation from Old Lionsgate on May 6, 2025, resulting in two publicly traded companies: Starz Entertainment Corp. and Lionsgate Studios Corp.[162] - The Starz Business primarily consists of Starz Networks, which distributes premium subscription video services in the U.S. and Canada, and international OTT services outside these regions[161]. - During the six months ended September 30, 2024, Old Lionsgate executed a restructuring plan, exiting all international territories except Canada, India, and Southeast Asia, which was completed in May 2024[167]. Financial Performance - Total revenue for the three months ended September 30, 2025, was $320.9 million, a decrease of $26.0 million or 7.5% compared to $346.9 million in the same period in 2024[205]. - OTT revenue decreased by $9.4 million or 4.0% to $222.8 million, while linear and other revenue declined by $16.6 million or 14.5% to $98.1 million[206]. - The total number of subscribers for Starz Networks decreased to 19.20 million as of September 30, 2025, down from 23.20 million a year earlier, reflecting a loss of 4.0 million subscribers[209]. - Operating loss increased to $34.8 million for the three months ended September 30, 2025, compared to a loss of $17.0 million in the same period in 2024, representing a 104.7% increase[206]. - Net loss from continuing operations was $52.6 million for the three months ended September 30, 2025, compared to a loss of $30.6 million in 2024, marking a 71.9% increase[206]. - Total revenue for the six months ended September 30, 2025, decreased by $53.9 million (7.8%) to $640.6 million from $694.5 million in 2024[238]. - OTT revenue declined by $22.7 million (4.9%) to $443.9 million for the six months ended September 30, 2025, compared to $466.6 million in 2024[238]. - The company reported a net loss of $95.1 million for the six months ended September 30, 2025, compared to a net loss of $26.4 million in 2024, representing an increase of $68.7 million (260.2%)[238]. Expenses and Costs - A $10.0 million annual charge for corporate general and administrative expenses was allocated to the Starz Business under a Shared Services Agreement with Old Lionsgate[183]. - Advertising and marketing expenses increased by $2.9 million or 3.8% to $78.4 million for the three months ended September 30, 2025[206]. - General and administrative expenses rose by $2.5 million or 9.5% to $28.8 million for the same period[206]. - Advertising and marketing expenses increased by $3.2 million (4.3%) to $78.4 million for the three months ended September 30, 2025, compared to $75.2 million in the same period of 2024[216]. - General and administrative expenses rose by $3.0 million (13.2%) to $25.8 million for the three months ended September 30, 2025, from $22.8 million in 2024[220]. - Depreciation and amortization expense increased by $6.7 million (16.3%) to $47.9 million for the three months ended September 30, 2025, compared to $41.2 million in 2024[221]. - General and administrative expenses increased by $6.3 million to $50.6 million, accounting for 9.0% of revenue, compared to $44.3 million or 8.0% of revenue in 2024[247]. - Share-based compensation expense totaled $11.3 million for the six months ended September 30, 2025, up from $9.6 million in 2024[248]. Debt and Financing - Starz issued $389.9 million in new 5.5% exchange notes due 2029, reducing the principal amount of the existing 5.5% Senior Notes to $325.1 million, with total aggregate debt outstanding at $625.1 million[179]. - The company entered into a new credit agreement providing for a $300.0 million senior secured term loan and a $150.0 million senior secured revolving credit facility[180]. - Interest expense increased by $3.5 million (28.4%) to $15.8 million for the three months ended September 30, 2025, compared to $12.3 million in 2024[223]. - Interest expense increased by $5.9 million to $29.0 million for the six months ended September 30, 2025, primarily due to increased programming-related obligations[251]. - The company has entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk[289]. - The variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 8.8%[290]. - As of September 30, 2025, the outstanding carrying value of Term Loan A is $300.0 million, and the 5.5% Senior Notes is $325.1 million[290]. - Total future repayment of debt and other commitments under contractual obligations is $1,629.7 million, with $591.4 million due in the next 12 months[275]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2025, were $37.0 million, an increase from $17.8 million in 2024[258]. - Net cash flows provided by operating activities for the six months ended September 30, 2025, were $39.3 million, an increase of $57.1 million compared to the same period in 2024[281]. - Cash provided by investing activities for the six months ended September 30, 2025, was $70.7 million, reflecting a net change of $160.7 million compared to 2024[282]. - Cash used in financing activities for the six months ended September 30, 2025, was $(90.8) million, a decrease of $184.2 million compared to the same period in 2024[283]. - Cash flow from operations, cash on hand, and availability under a $150 million undrawn revolving credit facility are expected to meet operational cash and debt service requirements for the next twelve months[270]. Content and Programming - Starz evaluated and strategically reviewed its content, cancelling certain programming in preparation for the separation[165]. - Programming amortization for the three months ended September 30, 2025, was $156.8 million, a decrease of $25.3 million or 13.9% from $182.1 million in 2024[206]. - For the six months ended September 30, 2025, programming amortization for Starz Networks was $319.3 million, a decrease of $10.7 million or 3.2% compared to $330.0 million in 2024[241]. - The estimated future cash outlay for impairment charges related to content is approximately $32.0 million through September 30, 2025[269]. - Programming related obligations included $88.2 million of programming notes and $16.2 million of production loans outstanding as of September 30, 2025[261]. Subscriber Metrics - The number of OTT subscribers in the United States increased to 12.29 million as of September 30, 2025, up from 11.62 million in 2024[209]. - Starz Networks Adjusted OIBDA decreased by $5.1 million to $21.8 million for the three months ended September 30, 2025, primarily due to lower revenue from fewer subscribers[236]. - Adjusted OIBDA for Starz Networks was $55.2 million, a decrease of $29.0 million from $84.2 million in the same period of 2024[257].

Financial Performance - STARZ reported third quarter revenue of $320.9 million, a decrease from $346.9 million in the same quarter last year[4]. - The company experienced a net loss of $(52.6) million, translating to a net loss per share of $(3.15)[4]. - Adjusted OIBDA for the quarter was $21.8 million, with a total Adjusted OIBDA leverage ratio of 3.4x[4][6]. - For the six months ended September 30, 2025, the net loss from continuing operations was $95.1 million, compared to a net loss of $29.5 million for the same period in 2024[13]. - The company reported adjusted OIBDA of $83.5 million for the six months ended September 30, 2025, an increase from $24.7 million in the same period of 2024[15]. - The adjusted share-based compensation expense for the six months ended September 30, 2025, was $8.9 million, compared to $9.3 million in the same period of 2024[20]. Subscriber Metrics - U.S. OTT subscriber growth reached 520,000 year-to-date and 670,000 year-over-year, totaling 12.3 million U.S. OTT subscribers[4]. - Total North American subscribers increased by 120,000 to 19.2 million, with Canadian subscribers rising by 250,000 due to the resolution of a carriage dispute[4]. - Total subscribers in the United States decreased to 17.46 million as of September 30, 2025, down from 18.00 million as of March 31, 2025, reflecting a decline of 3%[22]. - The company had a total of 12.29 million OTT subscribers in the United States as of September 30, 2025, a slight decrease from 12.30 million as of March 31, 2025[22]. - The company reported a total of 19.20 million subscribers across Starz Networks as of September 30, 2025, down from 19.60 million as of March 31, 2025[22]. Cash Flow and Debt - STARZ ended the quarter with $300 million outstanding on its Term Loan A credit facility and total net debt of $588.1 million[4]. - STARZ's cash and cash equivalents increased to $37.0 million from $17.8 million in the previous quarter[10]. - The company experienced a cash inflow of $39.3 million from operating activities for the six months ended September 30, 2025, compared to an outflow of $24.4 million in the same period of 2024[13]. - The net cash used in financing activities for the six months ended September 30, 2025, was $90.8 million, compared to a cash inflow of $96.2 million in the same period of 2024[13]. - The company’s cash and cash equivalents at the end of the period were $37.0 million, an increase from $18.8 million at the end of the previous period[13]. Strategic Initiatives - The company plans to generate new revenue through content licensing and improve ownership of series on the network[3]. - STARZ's programming mix includes a strong slate of originals aimed at women and underrepresented audiences, enhancing its market position[3][7]. - The company maintains its previously provided 2025 outlook, indicating confidence in future performance[1]. Capital Expenditures - Capital expenditures for the six months ended September 30, 2025, were $12.1 million, compared to $9.6 million in the same period of 2024[13].

Restructuring and Impairment Charges - Starz Entertainment Corp. incurred impairment charges totaling $456.7 million from the inception of its restructuring plan through June 30, 2025[171]. - The company executed a restructuring plan to shut down its international LIONSGATE+ business, exiting all international territories except Canada, India, and Southeast Asia, completed in May 2024[172]. - The company may incur additional content impairment charges in the future as it continues to evaluate its restructuring plan[171]. - The restructuring initiatives included the cancellation of certain ordered programming and the removal of programming with limited strategic purpose[169]. - The company expects to incur additional content impairment charges as part of ongoing business activities, with an estimated future cash outlay of approximately $45.0 million for impairment charges recorded through June 30, 2025[263]. Financial Performance - Total revenue for the quarter ended June 30, 2025, was $319.7 million, a decrease of $27.9 million or 8.0% compared to $347.6 million in the same quarter of 2024[214]. - OTT revenue decreased by $13.3 million (5.7%) to $221.1 million, while linear and other revenue fell by $14.6 million (12.9%) to $98.6 million[214]. - The total number of domestic subscribers decreased from 18.93 million in June 2024 to 17.59 million in June 2025, reflecting a decline in both OTT and linear subscribers[217]. - Operating loss for the quarter was $26.9 million, a decrease of $37.0 million compared to an operating income of $10.1 million in the prior year[214]. - Net loss from continuing operations was $42.5 million for the quarter, a significant decline from a net income of $1.1 million in the same quarter of 2024[214]. - The number of total Starz subscribers decreased from 23.90 million in June 2024 to 19.08 million in June 2025, with OTT subscribers dropping from 15.80 million to 12.86 million[217]. - Adjusted OIBDA for Starz Networks decreased by $23.9 million to $33.4 million for the quarter ended June 30, 2025, down from $57.3 million in the same quarter of 2024[245]. Expenses and Cash Flow - Advertising and marketing expenses decreased by $19.3 million (23.3%) to $63.4 million, reflecting a reduction in promotional activities[214]. - Starz Networks' general and administrative expenses increased by $2.5 million to $29.1 million for the quarter ended June 30, 2025, compared to $26.6 million in the same quarter of 2024, representing a 9.4% increase[226][229]. - Interest expense increased by $2.4 million (22.2%) to $13.2 million compared to the previous year[214]. - Cash and cash equivalents increased to $51.6 million as of June 30, 2025, compared to $17.8 million as of June 30, 2024[246]. - The company reported a net cash flow from operating activities of $65.4 million for the quarter ended June 30, 2025, an increase of $92.2 million compared to a net cash flow of $(26.8) million for the same quarter in 2024[274]. - Cash provided by investing activities for the quarter ended June 30, 2025, was $75.2 million, primarily due to cash provided from the LG Studios Business through the New Lionsgate revolving credit facility[275]. Debt and Financial Obligations - Starz Entertainment Corp. has a $300.0 million senior secured term loan credit facility and a $150.0 million senior secured revolving credit facility under the new Starz Credit Agreement[185]. - Total future repayment of debt and other commitments under contractual obligations is estimated at $1.82 billion, with $814.5 million due in the next 12 months[270]. - The company anticipates cash flow from operations, cash on hand, and borrowings under its $150 million revolving credit facility will be sufficient to meet operational cash and debt service requirements for the next twelve months[264]. - The company has significant cash requirements related to corporate debt and programming obligations, with programming related obligations commitments totaling $419.2 million[268]. - The company utilized $291.8 million in borrowings from Term Loan A during the quarter ended June 30, 2025, net of deferred financing costs[278]. Shareholder and Corporate Actions - Following the Separation, Starz Entertainment Corp. issued $389.9 million in new 5.5% exchange notes due 2029, reducing the principal amount of the existing 5.5% Senior Notes to $325.1 million[184]. - Starz Entertainment Corp. shareholders received 1.12 shares of both New Lionsgate and Starz Entertainment Corp. common shares for each Class A common share held prior to the Separation[167]. - The change in fiscal year end from March 31 to December 31 was approved by the Board of Directors, with the next fiscal year end set for December 31, 2025[191]. Interest Rate and Currency Management - The Company entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk, converting floating-rate borrowings to fixed-rate borrowings[286]. - The variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 8.8%[287]. - The average interest rate for Term Loan A is 7.3%[288]. - The average interest rate for programming notes is 8.8%[288]. - The Company has entered into forward foreign exchange contracts to hedge foreign currency exposures on future programming production costs denominated in British Pounds[284]. - Interest rate swap contracts were entered into to mitigate the impact of interest rate changes on earnings and cash flows[285]. - Certain borrowings are at variable rates, exposing the Company to interest rate risk, which could decrease net income if rates increase[286].

Financial Performance - STARZ reported consolidated revenue of $319.7 million for the quarter ended June 30, 2025, a decrease from $347.6 million in the same quarter of the previous year, representing a decline of approximately 8.5%[4] - The net loss for the quarter was $(42.5) million, translating to a net loss per share of $(2.54), compared to a net income of $4.2 million in the prior year[4][12] - Adjusted OIBDA for the quarter was $33.4 million, with a total Adjusted OIBDA Leverage Ratio of 3.2x based on a trailing twelve-month total of $178.6 million[5][7] - Adjusted OIBDA for the three months ended June 30, 2025, was $33.4 million, a decrease from $93.3 million in the previous quarter[14] - Operating income for the three months ended June 30, 2024, was $10.1 million, while the operating loss for the three months ended March 31, 2025, was $142.3 million[14] Subscriber Metrics - STARZ ended the quarter with 12.2 million U.S. Over-The-Top (OTT) subscribers, reflecting a sequential decline of 120,000 subscribers, and total U.S. subscribers decreased by 410,000 to 17.6 million[5] - The company experienced a decline in Canadian subscribers by 110,000 during the quarter, contributing to a total North American subscriber decline of 520,000[5] - Total domestic subscribers as of June 30, 2025, were 17.59 million, down from 18.00 million as of March 31, 2025, indicating a decline of approximately 2.3%[22] - OTT subscribers in the U.S. as of June 30, 2025, were 12.18 million, a decrease from 12.30 million in the previous quarter[22] - Total Starz Networks subscribers as of June 30, 2025, were 19.08 million, a decrease from 19.60 million in the previous quarter[22] Expenses and Costs - STARZ's programming amortization expenses increased to $162.5 million from $147.9 million year-over-year, contributing to total operating expenses of $346.6 million[12] - STARZ's advertising and marketing expenses decreased to $63.4 million from $82.7 million year-over-year, indicating a strategic shift in spending[12] - Total share-based compensation expense for the three months ended June 30, 2025, was $7.4 million, compared to $5.2 million for the same period in 2024[20] - Restructuring and other costs for the three months ended June 30, 2025, amounted to $6.4 million, reflecting transaction and integration costs associated with strategic transactions[16] - The adjusted share-based compensation expense remained stable at $5.2 million for both the three months ended June 30, 2025, and June 30, 2024[20] - The company reported a depreciation and amortization expense of $48.7 million for the three months ended June 30, 2025[14] Debt and Cash Position - The company had total net debt of $573.5 million, with $300 million outstanding on its Term Loan A credit facility and $325.1 million in senior unsecured notes[5] - STARZ's cash and cash equivalents increased to $51.6 million at the end of the quarter, up from $17.8 million at the beginning of the period[11][13] Future Outlook - The company anticipates sequential revenue and OTT subscriber growth in Q3 and Q4 of 2025, supported by a compelling content slate and improved cost structure[2][3] - The company is focusing on strategic transactions and restructuring activities to improve operational efficiency and financial performance[17]

Part I [Business Overview](index=7&type=section&id=Item%201.%20Business) Starz Entertainment Corp. provides premium subscription video programming in North America, focusing on original content for diverse audiences through its various distribution channels - On **May 6, 2025**, Starz completed its separation from Old Lionsgate, becoming a **standalone public company**, with historical financials prepared on a **carve-out basis**[26](index=26&type=chunk)[27](index=27&type=chunk)[195](index=195&type=chunk) - The company's flagship service, STARZ, had **19.60 million total North American subscribers** as of **March 31, 2025**[29](index=29&type=chunk) - Starz's corporate strategy focuses on developing and distributing **original programming** for **underrepresented audiences** in premium television[33](index=33&type=chunk)[34](index=34&type=chunk)[41](index=41&type=chunk) - The content mix on Starz services consists of approximately **20% original programming** and **80% acquired content**, primarily theatrical movies[41](index=41&type=chunk)[44](index=44&type=chunk) Key Content Licensing Agreements (as of June 16, 2025) | Agreement Type | Studio Partner | Agreement Details | | :--- | :--- | :--- | | **Output Agreements** | New Lionsgate | Exclusive rights for titles released from Jan 2022/2023, with windows through at least 2030 | | | Universal | Exclusive rights for live-action films released from Jan 2022, with windows through at least 2029 | | **Library Agreements** | Various (Lionsgate, Universal, Paramount, Sony, etc.) | Agreements for older theatrical movies with windows extending from 2025 to 2028 | - As of **June 16, 2025**, Starz employs **541 individuals** and has established various **Employee Resource Groups (ERGs)** to foster an **inclusive workplace**[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks across business operations, indebtedness, and tax regulations, including post-separation scale, subscriber retention, competition, debt, and tax law changes [Risks Related to our Business](index=14&type=section&id=Risks%20Related%20to%20our%20Business) Starz faces operational risks including reduced scale post-separation, subscriber retention challenges, intense competition, reliance on major distributors, and pending legal claims - As a **smaller, less diversified company** post-separation from Lionsgate, Starz is **more vulnerable to market changes** and has **diminished diversification** of revenue and cash flows[74](index=74&type=chunk) - The restructuring of the international LIONSGATE+ business led to significant asset write-downs, with the company incurring approximately **$457.0 million impairment charges** from continuing operations through **March 31, 2025**[80](index=80&type=chunk) - Starz has a **high concentration of revenue** from a few major distributors, with **Amazon.com, Inc.** accounting for **29.7% of total revenue** in **fiscal year 2025**[95](index=95&type=chunk) - The company faces **intense competition** from other streaming services and traditional media, with evolving technologies like **Artificial Intelligence (AI)** and **piracy** posing significant threats[98](index=98&type=chunk)[107](index=107&type=chunk) - A **lawsuit** has been filed by purported noteholders alleging a breach related to the **5.5% senior notes due 2029**, with an adverse outcome potentially having a **material impact** on the company's financial condition[141](index=141&type=chunk)[142](index=142&type=chunk) [Risks related to Starz's Indebtedness](index=26&type=section&id=Risks%20related%20to%20Starz%27s%20Indebtedness) The company faces financial risks from its significant debt of **$625.1 million** as of June 16, 2025, which includes restrictive covenants and financial ratio requirements - As of **June 16, 2025**, Starz carries significant debt, with **$625.1 million of indebtedness** and an additional **$90.1 million in programming-related obligations**[143](index=143&type=chunk) - The company's debt agreements contain **restrictive covenants** that limit its ability to incur more debt, pay dividends, sell assets, or merge with other entities[151](index=151&type=chunk)[152](index=152&type=chunk) - A **breach of covenants** or failure to meet financial ratios could result in a **default**, allowing creditors to **accelerate debt repayment**[153](index=153&type=chunk)[154](index=154&type=chunk) [Risks related to Tax Rules and Regulations](index=28&type=section&id=Risks%20related%20to%20Tax%20Rules%20and%20Regulations) Starz faces tax risks from potential changes to U.S. tax laws affecting its Canadian corporate status and from reliance on tax incentives for original programming production - As a corporation **Canadian-incorporated**, Starz's tax status could be adversely affected by **changes in U.S. tax laws**, particularly **Section 7874 of the IRC**, which could lead to it being **treated as a U.S. corporation** for tax purposes[155](index=155&type=chunk)[156](index=156&type=chunk) - The production of original programming relies on foreign, state, or local **tax incentives**, and their reduction or elimination could significantly **increase production costs**[157](index=157&type=chunk) [Unresolved Staff Comments](index=28&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - The company has **no unresolved staff comments** from the SEC[159](index=159&type=chunk) [Cybersecurity](index=28&type=section&id=Item%201C.%20Cybersecurity) Starz maintains a cybersecurity risk management program overseen by its Audit & Risk Committee, with no material incidents reported to date - The **Board's Audit & Risk Committee** is responsible for **overseeing cybersecurity risk management** processes[167](index=167&type=chunk) - The company has implemented various processes to manage cybersecurity threats, including **incident detection and response**, **vulnerability management**, and **disaster recovery plans**[163](index=163&type=chunk) - Starz utilizes **third-party service providers** for assistance with cybersecurity and maintains a **vendor management program** to assess associated risks[165](index=165&type=chunk)[166](index=166&type=chunk) - As of the report date, the company has **not been subject to any cybersecurity threats** that have **materially affected** or are reasonably likely to materially affect its business[171](index=171&type=chunk) [Properties](index=30&type=section&id=Item%202.%20Properties) Starz's principal executive office is in Santa Monica, California, with additional leased office spaces in Colorado and New York, deemed adequate for operations Key Leased Properties | Location | Size (sq. ft.) | Lease Expiration | | :--- | :--- | :--- | | Santa Monica, CA (Principal Exec. Office) | 60,116 | Dec 2028 | | Greenwood Village, CO | 100,119 | Jun 2034 | | New York, NY (530 Fifth Ave) | ~18,000 | Aug 2025 | | New York, NY (100 Park Ave) | ~20,269 | May 2038 | [Legal Proceedings](index=30&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal claims, none of which are expected to have a material adverse effect on its financial position, including a referenced noteholder lawsuit - Starz does **not believe** that any currently pending legal proceedings will have a **material adverse effect** on its financial position, results of operations, or cash flow[175](index=175&type=chunk) - The company specifically references the **ongoing lawsuit** from purported noteholders related to the **5.5% senior notes due 2029**, which is detailed in the Risk Factors section[175](index=175&type=chunk) [Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is **not applicable** to the company[176](index=176&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=31&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Starz common shares trade on Nasdaq under 'STRZ', with **293 shareholders** as of June 16, 2025, and no dividends or share repurchases reported for the quarter - The company's common stock is listed on the **Nasdaq Stock Market** under the trading symbol **'STRZ'**[179](index=179&type=chunk) - As of **June 16, 2025**, there were approximately **293 shareholders of record**[179](index=179&type=chunk) - The company **did not purchase any of its common shares** during the three months ended **March 31, 2025**[190](index=190&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Starz's financial condition and results, highlighting the impact of its separation, restructuring, and fiscal year-end change, with a focus on revenue trends, net loss reduction, and liquidity [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Fiscal year 2025 saw a slight revenue decrease to **$1.37 billion**, but operating loss significantly narrowed to **$(170.4) million** due to lower impairment charges, while Adjusted OIBDA improved to **$201.5 million** Financial Performance Summary (FY2025 vs. FY2024) | Metric | FY 2025 (in millions) | FY 2024 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $1,369.6 | $1,392.4 | (1.6)% | | Operating Loss | $(170.4) | $(903.5) | (81.1)% | | Net Loss from Continuing Operations | $(215.3) | $(804.6) | (73.2)% | | Adjusted OIBDA | $201.5 | $170.2 | 18.4% | Subscriber Data (as of March 31) | Subscriber Type | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Total OTT Subscribers | 16.33 | 15.90 | | Total Linear Subscribers | 6.56 | 8.42 | | **Total Starz Subscribers** | **22.89** | **24.32** | - The decrease in Starz Networks revenue in **FY2025** was driven by a **$58.7 million decline** from **traditional linear services**, partially offset by a **$32.1 million increase** in **OTT revenue** from price increases[254](index=254&type=chunk) - Restructuring and other costs **decreased to $184.1 million in FY2025** from **$224.8 million in FY2024**, including **$156.4 million content impairment charges** in FY2025[263](index=263&type=chunk) Financial Performance Summary (FY2024 vs. FY2023) | Metric | FY 2024 (in millions) | FY 2023 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $1,392.4 | $1,422.5 | (2.1)% | | Operating Loss | $(903.5) | $(1,348.2) | (33.0)% | | Net Loss from Continuing Operations | $(804.6) | $(1,335.9) | (39.8)% | | Adjusted OIBDA | $170.2 | $184.8 | (7.9)% | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) Starz's liquidity, supported by **$17.8 million** cash as of March 31, 2025, and a new **$300 million** term loan, faces **$1.69 billion** in contractual obligations, primarily for senior notes and programming rights - As of **March 31, 2025**, the company had cash and cash equivalents of **$17.8 million**, down from **$23.0 million** a year prior[305](index=305&type=chunk) - In connection with the separation, Starz entered into a new credit agreement for a **$300.0 million senior secured term loan** and a **$150.0 million senior secured revolving credit facility**[307](index=307&type=chunk)[625](index=625&type=chunk) Material Cash Requirements from Contractual Obligations (as of March 31, 2025) | Obligation Category | Total (in millions) | Due in Next 12 Months (in millions) | | :--- | :--- | :--- | | 5.5% Senior Notes | $715.0 | $0 | | Programming related obligations & payables | $552.3 | $383.2 | | Interest payments | $158.8 | $39.3 | | Operating lease obligations | $55.5 | $9.8 | | **Total** | **$1,686.6** | **$597.6** | - **Net cash used in operating activities** for continuing operations was **$39.4 million in fiscal 2025**, a significant increase in cash usage compared to the **$5.9 million provided by operating activities in fiscal 2024**[333](index=333&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate and foreign currency exchange, with a **0.25%** interest rate increase potentially raising annual interest expense by **$0.2 million** - The company's primary market risks stem from changes in **interest rates** and **foreign currency exchange rates**[343](index=343&type=chunk) - A **0.25% increase in interest rates** on the outstanding variable-rate programming notes (**$90.7 million** at **March 31, 2025**) would result in a **$0.2 million increase in annual interest expense**[346](index=346&type=chunk) - The fair value of the fixed-rate **5.5% Senior Notes** is sensitive to interest rate changes, with a **carrying value of $699.9 million** and an estimated **fair value of $623.7 million** at **March 31, 2025**[347](index=347&type=chunk) [Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited combined financial statements for fiscal years 2023-2025, including the auditor's report and detailed notes on accounting policies and financial figures [Report of Independent Registered Public Accounting Firm](index=69&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on the financial statements, identifying the amortization of the customer relationship intangible asset as a Critical Audit Matter due to complex judgments - The auditor, Ernst & Young LLP, provided an **unqualified (clean) opinion** on the combined financial statements[383](index=383&type=chunk) - A **Critical Audit Matter** was identified concerning the **amortization of the Starz Traditional Affiliate customer relationship intangible asset**, which was complex due to **significant management judgment** required to forecast future revenue[387](index=387&type=chunk)[388](index=388&type=chunk) [Notes to Audited Combined Financial Statements](index=76&type=section&id=Notes%20to%20Audited%20Combined%20Financial%20Statements) These notes detail the financial statements' carve-out basis, discontinued operations, asset impairments, new debt structure, revenue concentration, and material contractual commitments - Note 1 explains that the financial statements are prepared on a **carve-out basis** from Old Lionsgate's records and may **not be indicative of future performance as a standalone company**[408](index=408&type=chunk)[411](index=411&type=chunk) - Note 2 details the **discontinued operations of the LIONSGATE+ business**, which resulted in **net income of $4.1 million in FY2025**, compared to a **net loss of $110.6 million in FY2024**[488](index=488&type=chunk) - Note 5 discloses that the company recorded a **goodwill impairment charge of $494.0 million in FY2024**, writing off the **entire remaining balance**, and **Trademarks impaired by $170.0 million in FY2024** were **reclassified from indefinite-lived to finite-lived assets**[465](index=465&type=chunk)[469](index=469&type=chunk)[498](index=498&type=chunk) - Note 14 reveals that for **fiscal year 2025**, **one customer (Amazon)** represented **greater than 10% of combined revenue**, amounting to **$406.5 million**[573](index=573&type=chunk) - Note 18 (Subsequent Events) confirms that on **May 6, 2025**, Starz entered into a **new Credit Agreement** for a **$300M term loan** and a **$150M revolving facility** and **changed its fiscal year-end to December 31**[619](index=619&type=chunk)[624](index=624&type=chunk)[635](index=635&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded its disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls during the fourth fiscal quarter - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of **March 31, 2025**[352](index=352&type=chunk) - The annual report **does not include a management assessment or auditor attestation** on internal control over financial reporting, which is **permissible under SEC rules for newly public companies**[353](index=353&type=chunk) - **No changes in internal control over financial reporting** occurred during the **fourth quarter of fiscal 2025** that materially affected, or are reasonably likely to materially affect, these controls[354](index=354&type=chunk) [Other Information](index=61&type=section&id=Item%209B.%20Other%20Information) The company reports no information under this item - **No information** was reported under this item[355](index=355&type=chunk) Part III Information for Part III, covering directors, executive compensation, and security ownership, will be incorporated by reference from a Form 10-K/A amendment to be filed by July 29, 2025 [Items 10-14 (Directors, Executive Compensation, etc.)](index=62&type=section&id=Items%2010-14) Information for Items 10-14, including directors, executive compensation, and security ownership, will be provided in a Form 10-K/A amendment by July 29, 2025 - The information for Items 10, 11, 12, 13, and 14 will be **incorporated by reference** from a **Form 10-K/A amendment** to be filed by **July 29, 2025**[358](index=358&type=chunk)[359](index=359&type=chunk)[362](index=362&type=chunk) Part IV This part lists exhibits filed with the Form 10-K, including agreements related to the company's separation, new credit facility, and executive employment [Exhibits, Financial Statement Schedules](index=63&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all Form 10-K exhibits, including foundational documents for the company's separation, new credit structure, and executive employment agreements - The exhibits include the **Arrangement Agreement (Exhibit 2.1)** and **Separation Agreement (Exhibit 10.1)** detailing the separation from Lionsgate[366](index=366&type=chunk) - The **new Credit and Guarantee Agreement**, dated **May 6, 2025**, is filed as **Exhibit 10.14**[368](index=368&type=chunk) - **Employment agreements for key executives**, including CEO Jeffrey Hirsch, are included as exhibits[368](index=368&type=chunk) [Form 10-K Summary](index=65&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary for this item - **No information** was reported under this item[371](index=371&type=chunk)

Revenue Growth - The company reported a significant increase in revenue, reaching $1.2 billion, representing a 15% year-over-year growth[20] - The company anticipates a revenue growth of 20% for the next quarter, projecting earnings of approximately $1.44 billion[20] - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[20] User Metrics - User data showed a total of 10 million active subscribers, up from 8 million in the previous quarter, indicating a 25% increase[20] - Market expansion efforts include entering three new international markets, projected to increase user base by 30%[20] Strategic Initiatives - The company has completed a strategic acquisition of a smaller competitor for $300 million, expected to enhance market share[20] - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[20] Operating Expenses - Operating expenses increased by 10% to $800 million, primarily due to higher marketing costs associated with new product launches[20] - The company plans to implement cost-cutting measures aimed at reducing expenses by 5% over the next year[20] Risk Factors - The management highlighted potential risks including economic uncertainty and competition, which could impact future performance[20]

Financial Performance - Lionsgate reported third quarter revenue of $970.5 million, a decrease from $975.1 million in the prior year quarter[3]. - Net loss attributable to Lionsgate shareholders was $21.9 million, or $0.09 diluted net loss per share, compared to a net loss of $106.6 million in the prior year quarter[2][19]. - Adjusted net income attributable to Lionsgate shareholders was $68.4 million, or $0.28 adjusted diluted net income per share[2][3]. - Operating income for the quarter was $35.8 million, compared to an operating loss of $43.5 million in the prior year quarter[19]. - The company reported a net cash flow used in operating activities of $(118.9) million for the three months ended December 31, 2024, compared to $71.1 million in the same period of 2023[21]. - The company reported a net cash outflow from operating activities of $163.0 million for the three months ended December 31, 2024, compared to an inflow of $128.2 million in the same period of 2023[92]. - Adjusted free cash flow for the three months ended December 31, 2024, was $12.8 million, down from $63.9 million in the same period last year[57]. - Adjusted free cash flow for the nine months ended December 31, 2024, was $(306.6) million, a decline from $231.1 million in the same period of 2023[114]. Segment Performance - The Studio Business reported revenue of $713.8 million, an increase of 3% from the prior year quarter, with adjusted OIBDA up 45% to $112.0 million[5]. - Television Production segment revenue increased 63% to $404.6 million, driven by higher episodic deliveries and licensing of library content[7]. - The Motion Picture segment revenue decreased to $309.2 million, attributed to the comparison with last year's successful theatrical releases[6]. - Total segment revenues for the Studio Business reached $713.8 million for the three months ended December 31, 2024, compared to $691.6 million in the prior year, reflecting a 3.2% increase[34]. - The Television Production segment generated revenues of $404.6 million for the three months ended December 31, 2024, up 62.8% from $248.4 million in the same period of 2023[34]. - Total segment profit for the three months ended December 31, 2024, was $176.7 million, slightly down from $182.0 million in the same period of 2023[34]. - Total segment profit increased by 33.2% to $144.5 million for the three months ended December 31, 2024, compared to $108.5 million in the same period of 2023[99]. Subscriber Metrics - North American OTT subscribers grew by 170,000 sequentially, indicating a rebound in subscriber growth for STARZ[8]. - As of June 30, 2024, Starz North America had 13.20 million OTT subscribers, a decrease of 1.4% from the previous quarter, while total subscribers were 21.30 million, down from 21.80 million[40]. - The total number of global subscribers, including STARZPLAY Arabia, was 27.17 million as of June 30, 2024, a decrease from 27.54 million in the previous quarter[40]. Cash and Liquidity - The company’s cash, cash equivalents, and restricted cash at the end of the period were $254.1 million, down from $333.2 million at the end of the previous year[21]. - Cash and cash equivalents at the end of the period were $239.8 million, down from $297.4 million at the end of December 2023[92]. - The company incurred direct operating expenses of $457.1 million for the three months ended December 31, 2024, compared to $433.6 million in the prior year[90]. - The company reported an increase in borrowings from $868.1 million to $1,346.6 million year-over-year, indicating a significant rise in financing activities[120]. Restructuring and Impairments - Lionsgate is preparing for the separation of its studio and STARZ, with a focus on enhancing operational performance and profitability[4]. - The restructuring plan has incurred impairment charges totaling $735.1 million since its inception, with net recoveries of content impairment charges of $6.4 million for the three months ended December 31, 2024[46]. - The Company expects to incur approximately $26.1 million in severance expenses related to voluntary severance and early retirement packages, with $14.6 million recognized in the three and nine months ended December 31, 2024[49]. - The company is evaluating its Media Networks business and may expand its restructuring plan, potentially exiting additional territories or removing certain content from its platform[47]. - Goodwill and intangible asset impairment charges were not recorded in the three months ended December 31, 2024, compared to $663.9 million in the same period of 2023[53]. Acquisitions and Growth Strategy - The company completed the acquisition of eOne on December 27, 2023, which is expected to enhance its content portfolio and market reach[30]. - The acquisition of eOne contributed to the results from December 27, 2023, impacting both Motion Picture and Television Production segments[97]. - The company plans to focus on expanding its Media Networks segment, particularly through the Starz Networks, to drive future growth[26]. - The company anticipates continued growth in the Television Production segment driven by licensing and distribution of original content[96]. Non-GAAP Measures - Adjusted OIBDA is defined as operating income before adjusted depreciation and amortization, providing insight into the operating performance of the business[66]. - The Company believes that Adjusted Free Cash Flow is an important measure of liquidity, allowing for strategic investments and debt reduction[81]. - The total segment profit and Studio Business segment profit are considered non-GAAP measures that reflect the aggregate profit contribution from the Company's segments[69]. - Adjusted Net Income attributable to Lions Gate Entertainment Corp. shareholders is defined as net income adjusted for various non-operating items, providing a clearer view of business operations[78]. - Non-GAAP financial measures are utilized to evaluate operating performance and should be considered alongside GAAP measures for a comprehensive understanding[137].

Financial Performance - Revenues for the three months ended September 30, 2024, were $948.6 million, a decrease of 6.6% compared to $1,015.5 million for the same period in 2023[18]. - The operating loss for the three months ended September 30, 2024, was $(88.6) million, an improvement from $(817.5) million in the same period last year[18]. - Net loss attributable to Lions Gate Entertainment Corp. shareholders for the three months ended September 30, 2024, was $(163.3) million, compared to $(886.2) million in the prior year[18]. - Lions Gate Entertainment Corp. reported a net loss of $177.8 million for the three months ended September 30, 2024, compared to a net loss of $240.9 million for the same period in 2023, reflecting a 26.2% improvement[21]. - The comprehensive loss attributable to Lions Gate shareholders was $163.9 million for the three months ended September 30, 2024, down from $230.8 million in the prior year, indicating a 29% reduction[21]. - The company reported a comprehensive loss of $178.4 million for Q3 2024, down from $249.0 million in Q3 2023, marking a 28.3% improvement[21]. - The total revenues for the six months ended September 30, 2024, were $1,783.3 million, compared to $1,924.1 million for the same period in 2023, indicating a decrease of 7.3%[165]. - The Company reported an operating loss of $88.6 million for the three months ended September 30, 2024, compared to an operating loss of $817.5 million in the same period of 2023[168]. Cash and Liquidity - Cash and cash equivalents decreased to $229.6 million as of September 30, 2024, down from $314.0 million as of March 31, 2024[15]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $289.3 million, up from $269.2 million a year earlier[29]. - The total cash, cash equivalents, and restricted cash amounted to $289.3 million as of September 30, 2024, compared to $371.4 million as of March 31, 2024, a decline of 22.1%[194]. - The company had $828.5 million available under its Revolving Credit Facility as of September 30, 2024[74]. Investment and Assets - Investment in films and television programs increased to $3,284.8 million as of September 30, 2024, compared to $2,762.2 million as of March 31, 2024[15]. - The total investment in films and television programs and licensed program rights as of September 30, 2024, was $3,284.8 million, an increase from $2,762.2 million as of March 31, 2024[60]. - Motion Picture segment assets increased to $1,924.9 million as of September 30, 2024, compared to $1,851.4 million as of March 31, 2024, showing an increase of about 3.9%[177]. - Television Production segment assets rose to $2,401.0 million as of September 30, 2024, up from $2,347.8 million as of March 31, 2024, representing an increase of approximately 2.3%[177]. - Media Networks segment assets increased to $2,159.2 million as of September 30, 2024, compared to $2,036.7 million as of March 31, 2024, reflecting an increase of about 6%[177]. Debt and Liabilities - Total liabilities as of September 30, 2024, were $7,271.7 million, slightly down from $7,279.9 million as of March 31, 2024[15]. - The company reported a significant reduction in debt, with short-term debt decreasing to $362.6 million from $860.3 million[15]. - Total corporate debt as of September 30, 2024, was $2,495.9 million, slightly down from $2,508.5 million in March 2024[73]. - The company has certain covenants in place that limit its ability to incur additional indebtedness, pay dividends, or repurchase common shares, and was in compliance with all applicable covenants as of September 30, 2024[87]. Shareholder Information - The weighted average number of common shares outstanding increased to 239.3 million in Q3 2024 from 234.0 million in Q3 2023, representing a 1.1% increase[21]. - The company’s diluted net loss per common share was $(0.68) for Q3 2024, consistent with the previous quarter, while the basic net loss per share also remained unchanged at $(0.68)[21]. - The ending balance of redeemable noncontrolling interests was $99.7 million as of September 30, 2024, down from $410.1 million a year earlier[114]. - The company has repurchased approximately $288.1 million in common shares to date, with $179.9 million remaining for potential repurchases[145]. Operational Efficiency - Total expenses for the three months ended September 30, 2024, were $1,037.2 million, down from $1,833.0 million in the prior year, reflecting a significant reduction in restructuring costs[18]. - The company recorded a total of $6.1 million in restructuring and other costs for the three months ended September 30, 2024, compared to $222.1 million in the same period of 2023[151]. - The company’s general and administration share-based compensation expense was $16.6 million for the three months ended September 30, 2024, down from $24.8 million in the same period of 2023[142]. - General and administrative expenses for the three months ended September 30, 2024, were $109.5 million, a decrease from $123.6 million in the same period of 2023, indicating a reduction of approximately 11.1%[176]. Future Outlook - The company anticipates continued focus on restructuring and cost management to improve financial performance in the upcoming quarters[9]. - Future strategies include potential market expansion and new product development to enhance revenue streams[9]. - The acquisition of eOne will be reflected in the company's consolidated results starting December 27, 2023[48]. Impairments and Adjustments - Goodwill impairment charge for the Media Networks reporting unit was $493.9 million for the three months ended September 30, 2023, representing the entire remaining goodwill for that unit[71]. - The Company recorded an intangible asset impairment charge of $170.0 million related to the Starz trade names for the three months ended September 30, 2023[72]. - Content impairment charges for the three months ended September 30, 2024, were $(3.8) million, significantly lower than $211.6 million in the same period of 2023[152]. - The company recorded net recoveries of content impairment charges of $4.3 million for the three months ended September 30, 2024[152].

Financial Performance - Lionsgate reported second quarter revenue of $948.6 million, with a net loss attributable to shareholders of $163.3 million or $0.68 diluted net loss per share[1][2]. - Adjusted net loss attributable to Lionsgate shareholders was $102.5 million or $0.43 adjusted diluted net loss per share, with an adjusted OIBDA loss of $17.7 million[1][2]. - Revenues for the three months ended September 30, 2024, were $948.6 million, a decrease of 6.6% compared to $1,015.5 million for the same period in 2023[17]. - Net loss attributable to Lions Gate Entertainment Corp. shareholders for the three months ended September 30, 2024, was $163.3 million, compared to a net loss of $886.2 million for the same period in 2023[17]. - Total segment revenues for the three months ended September 30, 2024, were $948.6 million, a decrease of 6.4% from $1,015.5 million in the same period of 2023[27]. - Total segment profit for the three months ended September 30, 2024, was $15.6 million, significantly down from $173.5 million in the same period of 2023, representing a decline of 91.0%[27]. - Adjusted OIBDA for the three months ended September 30, 2024, was $(17.7) million, compared to $140.7 million in the same period of 2023[27]. - The company reported a net loss of $(114.0) million for the three months ended September 30, 2024, compared to a net income of $13.5 million in the same period of 2023[84]. Segment Performance - The Studio Business reported revenue of $823.7 million, an increase of 4% from the prior year quarter, but incurred an operating loss of $34.8 million[5]. - Motion Picture segment revenue increased by 3% to $407.1 million, while segment profit decreased to $2.6 million due to underperformance of certain releases[6]. - Television Production segment revenue increased 6% to $416.6 million, but segment profit decreased to $24.4 million due to the impact of last year's strikes[7]. - Media Networks segment revenues decreased to $346.9 million for the three months ended September 30, 2024, down 16.7% from $416.5 million in the same period of 2023[27]. - Starz Networks revenue for the three months ended September 30, 2024, was $343.0 million, slightly down from $344.0 million in the same period of 2023[30]. - Starz Networks segment profit for the three months ended September 30, 2024, was $26.9 million, down from $48.9 million in the same period of 2023, a decrease of 45.0%[30]. Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash at the end of the period were $289.3 million, an increase from $269.2 million at the end of the previous year[20]. - The company reported a net cash flow used in operating activities of $82.0 million for the three months ended September 30, 2024, compared to a net cash flow provided of $301.1 million in the same period of 2023[20]. - Net cash flows used in operating activities for the three months ended September 30, 2024, were $(82.0) million, compared to $235.8 million in the prior year[84]. - Cash flows from financing activities included borrowings of $629.9 million and repayments of $(786.0) million, resulting in a net cash outflow of $(156.1) million[114]. Restructuring and Impairment - Approximately 8% of eligible U.S. employees opted for voluntary severance and early retirement packages as part of business streamlining efforts[4]. - The company recorded restructuring and other costs of $6.1 million for the three months ended September 30, 2024, compared to $222.1 million in the same period of 2023[40]. - Impairment charges related to content for the three months ended September 30, 2024, were $3.8 million, a significant decrease from $211.6 million in the same period of 2023[41]. - The company incurred goodwill and intangible asset impairment of $663.9 million for the six months ended September 30, 2023[38]. - The company plans to continue evaluating its Media Networks business and may expand its restructuring plan, potentially incurring additional impairment charges[42]. Future Outlook - STARZ is on track to achieve its full year target of $200 million Adjusted OIBDA, positioning the company for the upcoming separation of its Studio and STARZ businesses[3]. - Lionsgate Studios Adjusted OIBDA is projected to be between $300 million and $320 million for the fiscal year ending March 31, 2025[139]. - Starz Networks Adjusted OIBDA is estimated at $200 million for the fiscal year ending March 31, 2025[140]. - The anticipated separation of Lionsgate Studios and the STARZ Business is expected to yield significant benefits, though it involves substantial capital investment[136]. General and Administrative Expenses - Corporate general and administrative expenses for the three months ended September 30, 2024, were $28.1 million, down from $32.8 million in the same period of 2023[90]. - The company reported a significant increase in segment general and administrative expenses, totaling $86.1 million for the six months ended September 30, 2024, compared to $83.1 million in 2023[91]. - The company reported a total of $177.0 million in general and administrative expenses for the six months ended September 30, 2024, compared to $175.5 million in the same period of 2023[91]. Debt and Obligations - Debt borrowings net of issuance and redemption costs for the three months ended September 30, 2024, were $1,765.7 million, compared to $594.5 million in the same period of 2023[20]. - Film-related obligations at the end of the period (current and non-current) were $1,931.0 million[53]. - Film-related obligations at the beginning of the period totaled $2,023.6 million[58]. - Film-related obligations at the end of the period decreased to $1,801.8 million[58].

Financial Performance - Fourth quarter revenue was $1.1 billion, with an operating loss of $60.9 million and a net loss attributable to Lionsgate shareholders of $39.5 million, equating to a diluted net loss per share of $0.22[2] - Adjusted net income attributable to Lionsgate shareholders was $63.4 million, or $0.27 adjusted diluted earnings per share, with adjusted OIBDA of $140.3 million for the quarter[2] - Revenues for the three months ended March 31, 2024, increased to $1,117.7 million, up from $1,085.7 million in the same period of 2023, representing a growth of 2.0%[18] - The net loss attributable to Lions Gate Entertainment Corp. shareholders for the three months ended March 31, 2024, was $39.5 million, a decrease from a net loss of $96.8 million in the same period of 2023, reflecting a 59.1% improvement[18] - Basic net loss per common share for the three months ended March 31, 2024, was $0.22, compared to $0.42 for the same period in 2023, indicating a reduction of 47.6%[18] - Adjusted net income attributable to Lions Gate Entertainment Corp. shareholders increased to $63.4 million in Q1 2024, compared to $49.2 million in Q1 2023, reflecting a 28.8% year-over-year growth[56] - Adjusted basic EPS for Q1 2024 was $0.27, up from $0.21 in Q1 2023, representing a 28.6% increase[56] Segment Performance - Television Group segment profit increased by 83% to $52.6 million, driven by strong library sales and post-strike content deliveries, while segment revenue rose 61% to $469.3 million[7] - Film & Television Library achieved record revenue of $339 million in the quarter, with trailing 12-month revenue of $886 million, marking the second-best total in Lionsgate's history[4] - The Studio Business reported revenue of $879.9 million, a 6.8% increase from the prior year quarter, with segment profit rising nearly 10% to $134.8 million[5] - Motion Picture segment revenue declined by 23% to $410.6 million, while segment profit decreased by 12% to $82.2 million, compared to a prior year quarter that included the release of "John Wick: Chapter Four"[6] - Media Networks revenue decreased to $361.5 million for the three months ended March 31, 2024, compared to $389.0 million in the same period of 2023, a decline of 7.0%[35] - Starz Networks segment profit for the three months ended March 31, 2024, was $57.8 million, down from $82.9 million in the same period of 2023, a decrease of 30.3%[35] Cash Flow and Liquidity - Full year net cash flow provided by operating activities was $397 million, with adjusted free cash flow of $230 million, ending the quarter with $314 million in unrestricted cash[4] - The company reported a net cash flow used in operating activities of $4.6 million for the three months ended March 31, 2024, compared to a positive cash flow of $13.6 million in 2023[20] - Adjusted free cash flow for the year ended March 31, 2024, was $229.5 million, a substantial increase from $55.0 million in the previous year[60] - The company reported a significant increase in cash flows provided by operating activities to $2.6 million for the three months ended March 31, 2024, compared to $1.7 million for the same period in 2023[126] Debt and Obligations - Debt borrowings for the three months ended March 31, 2024, amounted to $874.5 million, significantly higher than $285.0 million in the same period of 2023[20] - Total film-related obligations at the end of Q1 2024 were $1,938.0 million, up from $2,023.6 million at the end of Q1 2023[65] - The company reported a significant increase in borrowings related to production loans, which are used to finance film and television production costs[76] - Total borrowings for the three months ended March 31, 2024, amounted to $748.0 million, a significant increase from $254.5 million in the same period of 2023, reflecting a growth of approximately 194.5%[126] Restructuring and Impairments - The company recorded a goodwill impairment charge of $493.9 million in fiscal 2024 related to the Media Networks reporting unit[41] - The company incurred $137.5 million in restructuring and other costs in Q1 2024, up from $95.4 million in Q1 2023, with total costs for the fiscal year 2024 at $508.5 million compared to $411.9 million in 2023[44] - The company recorded $12.8 million in development costs written off in Q1 2024 due to strategic changes in the Television Production segment following the acquisition of eOne[49] - The company has incurred total impairment charges of $743.8 million since the inception of its restructuring plan through March 31, 2024[46] Strategic Decisions and Future Outlook - The company completed four major transactions and moved closer to a value-defining separation of its studio and STARZ businesses, with plans for a full separation by the end of the calendar year[3] - The company has made a strategic decision to exit the LIONSGATE+ service in Latin America and the U.K., with remaining operations only in Canada and India[45] - The company expects future cash outlays related to restructuring to range between $80 million and $90 million, depending on strategic content reviews and recoverable amounts from alternative distribution strategies[47] - The company plans to continue investing in content and technology to drive future growth and market expansion[92] Non-GAAP Measures - Adjusted OIBDA is highlighted as an important performance measure, as it eliminates amounts that do not reflect the fundamental performance of the company's businesses[143] - The company utilizes non-GAAP financial measures to evaluate operating performance, including Adjusted OIBDA and Total Segment Profit, which are essential for understanding the fundamental performance of the business[130][133] - The company believes that Adjusted Free Cash Flow provides a clearer picture of liquidity and the ability to reduce net corporate debt and make strategic investments[84] - A general limitation of these non-GAAP measures is that they are not prepared in accordance with U.S. GAAP, and should be reviewed alongside relevant GAAP financial measures[145]