Core Insights - Lionsgate Studios Corp. reported a strong fourth quarter with revenue of $1.1 billion, representing a 22% increase year-over-year [1][2] - The company achieved a net income attributable to shareholders of $21.9 million, or $0.10 diluted earnings per share [2][3] - Adjusted net income attributable to shareholders was $60.9 million, or $0.21 adjusted diluted earnings per share [2][3] - Operating income rose significantly to $94.2 million, and adjusted OIBDA increased by 49% to $138.3 million [1][2] - The motion picture segment profit reached its highest quarterly level in 10 years, driven by successful mid-budget films and robust library demand [4][3] Financial Performance - Fourth quarter revenue was $1.1 billion, with operating income of $94.2 million and net income attributable to Lionsgate shareholders of $21.9 million [2][3] - Adjusted net income for the quarter was $60.9 million, with adjusted OIBDA at $138.3 million, reflecting a 49% year-over-year increase [2][3] - Net cash flow from operating activities for the quarter was $255.9 million, while adjusted free cash flow was $395.3 million [2] Segment Performance - The motion picture segment revenue grew by 28% to $526.4 million, with segment profit increasing by 65% to $135.3 million [4][30] - The television production segment revenue increased by 16% to $543.3 million, although segment profit decreased to $40.6 million due to a tough comparison with the previous year [5][30] Library Revenue - Trailing 12-month library revenue grew by 8% to an all-time high of $956 million, driven by record fourth-quarter licensing sales [3][1] - The fourth quarter alone saw library revenue reach $340 million, boosted by licensing sales of popular shows to major streaming platforms [3] Corporate Developments - Following the quarter, Lionsgate fully separated its Lionsgate and STARZ businesses, marking a significant corporate restructuring [1][17] - The company is positioned as a standalone studio with a diversified business model, focusing on creating value for shareholders [3][1]

Financial Data and Key Metrics Changes - Consolidated revenue for the quarter was $971 million, with adjusted OIBDA at $144 million and operating income at $36 million. Reported fully diluted earnings per share was a loss of $0.09, while adjusted earnings per share was a profit of $0.28 [19][20] - Adjusted OIBDA for Lionsgate Studios is forecasted to be between $300 million to $320 million for the fiscal year, while Starz's North American business is expected to generate approximately $200 million of adjusted OIBDA [19][20] Business Line Data and Key Metrics Changes - Studio revenue grew 3.2% year over year to $714 million, with adjusted OIBDA increasing 45% to $112 million. Trailing twelve-month library revenue was $954 million, representing a 22% increase compared to last year's Q3 [20][21] - Motion Picture revenue for the quarter was $309 million, with segment profit at $84 million. The television segment saw revenue of $405 million, up 63% year over year, with segment profit significantly increasing to $61 million [20][21] - Media Networks revenue was $345 million, with segment profit at $25 million, reflecting a decline due to exiting most international markets [22] Market Data and Key Metrics Changes - Starz ended the quarter with 12.6 million North American OTT subscribers, representing sequential growth of 170,000 subscribers. Total North American subscribers were 20 million, showing a modest sequential decrease [23] - Starz has successfully transitioned its revenue from 70% linear to 70% digital over the past five years, doubling its domestic OTT subscriber base [16] Company Strategy and Development Direction - The company is focusing on diversifying its buyer mix and cutting costs in its television business while expanding its distribution footprint with key partner renewals and new bundling deals [7][15] - The company announced an extension of its exclusive pay one deal with Starz through 2028 and a new exclusive pay deal with Amazon Prime Video, which is expected to significantly increase contributions from the pay television window [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong fourth quarter, driven by film performance carryover, strong scripted series deliveries, and positive growth in OTT subscribers [29][30] - The company anticipates continued subscriber growth for Starz, particularly in the OTT segment, while expecting a consistent decline in the linear business [79] Other Important Information - The company is preparing for the separation of its businesses, with regulatory review ongoing and a shareholder meeting expected in mid to late April [16][40] - The company is also focusing on ancillary opportunities, including the opening of the John Wick experience in Las Vegas and various stage productions [12][51] Q&A Session Summary Question: Context for the expected increase in studio EBITDA in Q4 - Management indicated that the strong fourth quarter is driven by strength in film and TV, with carryover from mid-sized films and a robust lineup of scripted series [29][30] Question: Update on the separation process - Management confirmed that the SEC review is the last substantial item before separation, with an updated proxy expected soon [38][40] Question: Details on the Amazon relationship and its impact - The Amazon deal allows for earlier access to titles and is expected to significantly benefit both Starz and the studio post-separation [42][46] Question: Industry recovery in content production - Management noted that the TV market is slowly recovering, with a focus on leveraging strong IP and cross-divisional collaboration [57][59] Question: Cost management and talent compensation - Management acknowledged that while talent costs remain high, they are exploring innovative ways to manage overall production costs [67][68]