Lions Gate Entertainment Corp reported QQ4 2024 results with revenue of $1.118 billion, a modest YoY increase of 2.96% and a QoQ surge of 14.63% driven by seasonality and elevated content/licensing activity. Despite revenue momentum, the company posted an operating loss of $60.9 million and a net loss of $39.4 million, underscoring persistent fixed-cost pressure and a heavy amortization/interest burden. EBITDA of $482.8 million supports cash generation potential, yet the company remains burdened by an uneven profit ladder, sizeable intangible assets, and meaningful leverage. On the balance sheet, Lions Gate carries total debt of ~$4.42 billion and negative equity (~$-3.13 billion), with cash at period-end of ~$371 million, highlighting a delicate deleveraging path ahead. Negative equity reflects ongoing accounting with substantial goodwill/intangible assets, while cash flow from operations was minimal in the quarter (-$4.6 million) and free cash flow was negative (-$14.6 million), indicating limited near-term liquidity strength despite a modest cash build from financing activities. The quarter’s dynamics suggest a business model that remains levered to content slate performance and Starz monetization, with a potential path to improvement contingent on subscriber monetization, cost discipline, and a gradual balance-sheet repair.
Key takeaway for investors: LGF-B demonstrated revenue stability in a challenging secular backdrop but needs a clearer de-leveraging plan, improved operating leverage, and tangible progress in Starz monetization and international growth to sustain intrinsic value amid a fragmented competitive landscape.