Q2 2026 Lionsgate Studios Corp Earnings Call

Speaker #1: Good day and welcome to the Lionsgate Second Quarter 2026 Earnings call . All participants will be in listen only mode . Should you need assistance , please signal a conference specialist by pressing the star key , followed by zero .

Speaker #1: After today's presentation , there will be an opportunity to ask questions . To ask a question , you may press star , then one on your touch tone phone .

Speaker #1: To withdraw your question , please press star and then two . Please note this event is being recorded . I would now like to turn the conference over to Nilay Shah , Head of Investor Relations .

Speaker #1: Please go ahead .

Speaker #2: Good afternoon . Thank you for joining us for the Lionsgate Studios Corporation's Fiscal 2026 second quarter conference call . We'll begin with opening remarks from our CEO , Jon Feltheimer , followed by remarks from our CFO , Jimmy Barge .

Speaker #2: After their remarks , we'll open the call for questions . Also joining us on the call today are Vice Chairman Michael Burns , COO , Brian Goldsmith , chairman of the TV Group , Kevin Beggs , chairman of the Motion Picture Group .

Speaker #2: Adam Fogelson , president of worldwide TV and Digital distribution . Jim Packer and senior advisor to the office of the CEO at Lionsgate and co-CEO of Three Arts Brian Weinstein .

Speaker #2: The matters discussed on The call also include forward looking statements , including those regarding the performance of future fiscal years . Such statements are subject to a number of risks and uncertainties .

Speaker #2: Actual results could differ materially and adversely from those described in the forward looking statements . As a result of various factors . This includes the risk factors set forth in our public filings for Lionsgate Studios Corp.

Speaker #2: . The company undertakes no obligation to publicly release the result of any revisions to these forward looking statements that may be made to reflect any future events or circumstances .

Speaker #2: I'll now turn the call over to John .

Speaker #3: Thank you , Neal , and good afternoon , everyone . Thank you for joining us . We reported a quarter in line with our financial expectations and with all signs pointing to significant growth over the next two quarters and through fiscal 27 .

Speaker #3: We're pleased to report that our trailing 12 month library revenue reached $1 billion for the first time , a record performance that highlights not only the value of our library , but our entire portfolio of intellectual property .

Speaker #3: During the quarter , we continued to invest in that portfolio by preparing our tentpoles for fiscal 27 and beyond , wrapping production on Michael while shooting The Hunger Games and two resurrection films .

Speaker #3: This morning , we dropped our first Michael trailer to kick off the marketing campaign for what we believe will be a true motion picture event in April .

Speaker #3: This week , we announced a multifaceted deal with millennium to acquire all future film and television rights to The Expendables franchise and worldwide distribution rights to the next Rambo movie starring the recruits Noah Centineo and directed by Sisu's Umar Helander .

Speaker #3: We will also be the lead studio on all future Rambo TV series . Next week I will be in London for the launch of the first ever Hunger Games stage play .

Speaker #3: Early ticket sales have been so strong that the play has already been extended to October 2026 , kicking off a roster of Lionsgate stage plays that includes La La Land , Dirty Dancing , Wonder and Silver Linings Playbook .

Speaker #3: In a difficult operating environment , our television business has scored three wins in a row with the studio winner of a record 13 Emmys , including Best comedy .

Speaker #3: The breakout hit The Hunting Wives for Netflix and most recently , the Rainmaker . Three different types of shows on three different kinds of platforms , with three different financial models , all three have been renewed for second seasons , and our three arts , talent management and production company continues to have a year of strong growth and diversification .

Speaker #3: Last quarter , Three Arts expanded into sports with the acquisition of Ana management , adding world class athletes like NFL superstar Travis Kelce to the newly rebranded three Arts Sports .

Speaker #3: This quarter , they built on that momentum by hiring leading sports manager and entrepreneur Shay Ola Khan , who is already brought aboard NFL star Myles Garrett .

Speaker #3: As three Arts continues to build a top tier sports talent management business . Turning to our motion picture group , from now You See me through resurrection , we've put together a film slate primed to deliver strong growth over the next 18 months .

Speaker #3: We have three major holiday season releases with excitement building for the return of Now You See Me , Four Horsemen opening next Friday .

Speaker #3: Paul Feig's thriller The Housemaid , starring Sydney Sweeney and Amanda Seyfried and based on the first novel of the best selling housemaid trilogy , is generating strong buzz ahead of its December 19th release .

Speaker #3: And rounding out an active two months , we're pleased to extend our collaboration with one of the greatest filmmakers of our generation with the December 5th release of Quentin Tarantino's Kill Bill , the whole Bloody Affair presenting the entire kill Bill epic as a single combined film in theaters nationwide for the first time .

Speaker #3: Speaking of classic theatrical releases , we partnered with fathom to release the five Twilight movies in theaters last week to celebrate the 20th anniversary of the first Twilight novel .

Speaker #3: It was one of Fathom's top rereleases of the year , with the first Twilight film opening at number two at the box office .

Speaker #3: Out of all releases , 17 years after its debut . Our three tentpoles in fiscal 27 , Michael , this coming April , The Hunger Games in November , and the first resurrection movie in March 2027 , followed by the second resurrection film to kick off fiscal 28 .

Speaker #3: Give us added visibility into our slate in an unpredictable box office environment . Beyond these tentpoles , we continue to develop many of our signature properties saw Blair Witch , American Psycho , monopoly , Naruto based on the blockbuster manga property and new films from the John Wick universe .

Speaker #3: In television , our go forward slate has a strong cadence as we secured key renewals for ghosts , the Rookie , the studio , the Hunting Wives , and The Rainmaker with an anticipated doubling of scripted series deliveries from fiscal 26 to fiscal 27 .

Speaker #3: And we continue to refill our pipeline with strong new shows like Robin Hood , which debuted on MGM plus last weekend . Spartacus , House of Ashur , which just dropped its first trailer ahead of its December 5th debut , bringing back one of Starz most successful brands and the adult animated Twilight TV adaptation .

Speaker #3: Midnight Sun , which is being readied for production at Netflix . The new season of Power Book four , Force returns tomorrow on Starz with Power Origins .

Speaker #3: The next installment of a franchise that has already generated three hit spinoffs . Launching next year in an ultra competitive environment . We have to work overtime and entrepreneurially for every win .

Speaker #3: We found the right home in Netflix to grow the hunting Wives , putting together a viral grassroots marketing campaign to propel it to six weeks .

Speaker #3: In Netflix's US top ten and renegotiated our international licensing deals to pave the way for a second season . Netflix renewal . We partnered with shot The Rainmaker in Ireland to create a winning financial model for our network partner at USA , and we continue to grow the long tail of older series with deals in new and traditional markets alike , securing a third cycle syndication sale for Mad Men , testing a traditional broadcast syndication rollout for ghosts in 14 markets and exploring opportunities to repurpose several of our classic series for the micro drama market .

Speaker #3: It's important to note that the value of our continued investment in scripted Blumhouse and television , playing the long game in order to retain rights is becoming more and more evident with the percentage of our library revenues from television doubling over the past ten years .

Speaker #3: Operationally . In September , we made the difficult but necessary decision to reduce our headcount by approximately 5% , bringing overall headcount reduction over the past 18 months to more than 20% .

Speaker #3: As we continue to align our business with the reality of a changing marketplace . On the technology front , we continue to find exciting new use cases as we apply AI to more areas of our business , increasing our productivity , generating cost savings and expanding our creative toolkit .

Speaker #3: But we're also diligently protecting our content and that of our partners from unauthorized use of AI . Our intellectual property is the core of our business , and it is our prerogative to decide when , where , and how to use it .

Speaker #3: But we do believe that as long as appropriate guardrails are established, the growing intersection of entertainment and AI will ultimately create significant and mutually beneficial value.

Speaker #3: In closing , for the past 100 years , the big idea driving the entertainment business has been if you build it , they will come .

Speaker #3: If you make a movie and you put it in theaters , they will come . If you put television series on 3 or 4 , broadcast networks , 100 million homes will watch them .

Speaker #3: Today , as our world expands into new digital and social media platforms , audiences are harder to find , harder to engage , and harder to market to .

Speaker #3: But they are also consuming more content across more platforms than ever before , offering even more upside to a company like ours . That brings to this new environment a massive portfolio of content , a roster of valuable franchises , efficient production models and an entrepreneurial spirit .

Speaker #3: Now , I'd like to turn things over to Jimmy .

Speaker #4: Thanks , John , and good afternoon , everyone . I'll briefly discuss our fiscal second quarter 2026 Studio financial results and provide an update on the balance sheet for the quarter .

Speaker #4: Lionsgate Studios revenue was $475 million . Adjusted EBITDA was $14 million and operating loss was 46 million reported . Fully diluted loss per share was $0.39 and fully diluted adjusted loss per share was $0.20 .

Speaker #4: Net cash used in operating activities was 104 million , while use of adjusted free cash flow for the quarter was 129 million . Trailing 12 month library revenue grew 13% year over year to just over $1 billion , reaching record levels for the fourth consecutive quarter .

Speaker #4: Now, breaking down our performance in the quarter, let's start with Motion Picture. Motion Picture revenue was $276 million, and segment profit was $31 million.

Speaker #4: Revenue was expectedly down year over year due to difficult comparison with last year's second quarter , which had five wide theatrical releases in the period relative to just two releases .

Speaker #4: This quarter . Segment profit was up significantly year over year as we rebounded off of last year's underperformance of Borderlands . We anticipate motion picture segment profit to build from Q3 to Q4 , driven by an increase in titles entering their pay one window in Q4 and a spend primarily tied to Now You See me now you don't .

Speaker #4: In made being weighted to the third quarter . There will be some PA spin in the fourth quarter tied to April release of Michael , which will be followed by other highly anticipated fiscal 27 titles , including the November release of Hunger Games .

Speaker #4: Sunrise on the Reaping and the March 27th release of resurrection , Part one . This cadence of tentpole films , coupled with our mid-range budget slate , gives us extended visibility and bolsters our view on motion picture growth in fiscal 27 .

Speaker #4: Now moving to TV revenue was $199 million in segment profit was 13 million . Revenue in segment profit were expectedly down year over year due to the timing of episodic deliveries in the quarter .

Speaker #4: We expect strength in segment profit in TV over the remainder of the year , driven by an increase in deliveries and incremental licensing revenue tied to hunting Wives , which will be available in more Netflix international markets over the coming months .

Speaker #4: Furthermore , as we noted on our prior call , we are forecasting significant growth in scripted deliveries next year , strengthening TV's financial outlook and fiscal 27 .

Speaker #4: Now , let's take a look at the balance sheet . We ended the quarter with $1.7 billion of net debt . Expectedly reflecting a modest sequential increase in leverage to 6.4 times on the timing of content spend in addition , we strengthened our balance sheet by upsizing our IP facility by $320 million .

Speaker #4: We used the proceeds to early pay the Spyglass Library acquisition Facility , reduce our revolver draw to zero , and stockpile cash . We ended the quarter with $800 million of undrawn revolver and $247 million of cash on the balance sheet .

Speaker #4: We are similarly seeing strength in off balance sheet assets , as evidenced by our backlog ending the quarter at approximately $1.6 billion , up $379 million , or 31% sequentially .

Speaker #4: As you will recall , backlog represents off balance sheet contractual orders not yet delivered and is indicative of the strength we see in our future revenues and cash flows .

Speaker #4: We continue to anticipate that fiscal 26 will be a back end loaded year , and we expect sequential growth into Q3 and Q4 .

Speaker #4: Additionally , as we noted last quarter , we expect stronger carryover of profits from our fiscal 26 film slate into fiscal 27 , which combined with our previously discussed tentpole driven fiscal 27 slate and a TV business that is expected to show significant growth next year , gives us confidence that we are still on track to deliver strong adjusted EBITDA growth in fiscal 27 relative to fiscal 25 .

Speaker #4: Now , I'd like to turn the call over to Nilay for Q&A .

Speaker #5: Thanks , Jimmy . Operator , can we open the call up for Q&A ?

Speaker #1: We will now begin the question and answer session to ask a question . You may press star , then one on your touch tone phone .

Speaker #1: If you are using a speakerphone , please pick up your handset before pressing the keys . If at any time your question has been addressed and you would like to withdraw your question , please press star and then two .

Speaker #1: Our first question comes from David Joyce with Seaport Research Partners . Please go ahead .

Speaker #6: Thank you . Two questions please . First , if you could drill down some more on what's giving you the confidence for the back half of this year in 2027 and beyond , with your slate granted , you explained the backlog being up significantly , but are there other metrics ?

Speaker #6: You know , with social media or audience testing that you or the your licensees are doing ? And then secondly , if you could please comment on your views of the M&A optionality in what's going on more broadly in the industry .

Speaker #6: Thank you .

Speaker #7: Hey , David , it's Adam . I'll start with your confidence question . In terms of the slate . Clearly , there is no perfect predictor out there , but that having been said , we are seeing a ton of excitement .

Speaker #7: You know , just just yesterday or the day before exhibition was talking about a number of our films in the fourth quarter and into next year that they're seeing a lot of enthusiasm .

Speaker #7: We're getting a lot of traction online . I can't either confirm or deny that we participated in the Louvre heist , but Now You See Me has been all over social media .

Speaker #7: And The Housemaid is generating a ton of conversation . The Michael trailer generated over 30 million views in the first six hours of its launch today , which is 50% more than what John Wick four trailer delivered in its first six hours .

Speaker #7: The conversations around The Hunger Games with every announcement of casting and the massive global demand for resurrection . All of that gives us confidence .

Speaker #7: We recognize that you can't be perfect in predicting each each film , but when you look at the portfolio and the films I mentioned and a lot of the mid and small budget films that we have on our slate , it does give us an exceptional amount of confidence .

Speaker #7: And the growth we're talking about is not based on projecting that every one of those turns into a blockbuster , but we think we've got a bunch in that mix .

Speaker #7: Yeah , in terms of of .

Speaker #3: The M&A environment , I think , you know , we can all see it's incredibly disruptive . There's a lot of uncertainty out there right now .

Speaker #3: All we can do , David , is keep sticking to our knitting building into next year with again a great TV slate , a great film slate .

Speaker #3: And this library is really starting to perform. I can't say often enough that we've been investing for 25 years in that library, and we've retained rights almost every single time.

Speaker #3: We continue to retain him every time we can . When we sell a television show and and so we , we , we own , you know , the majority of our library and it's paying dividends for us right now .

Speaker #3: So we'll keep , you know , doing what we do and we'll see where all the , you know , where the bouncing ball ends up .

Speaker #3: It'll be some interesting bedfellows . I think .

Speaker #6: I appreciate it . Thank you .

Speaker #1: And the next question comes from Brent with Raymond James . Please go ahead .

Speaker #8: Hey thanks , everyone for taking the questions . Good to see the Michael trailer out today . And sounds like really strong interest in that .

Speaker #8: There was a thought in the past that you all have some optionality on that . In terms of the ability to then make a second film , assuming that one performs well , can you update us on where we stand on that option ?

Speaker #7: Sure , Brent , it's Adam , thanks for the question . Look , since the last time we were together on an earnings call , we have now had the great pleasure of seeing the director's cut of the first film .

Speaker #7: And it is exceptional . And while we're not yet ready to confirm plans for a second film , I can tell you that the creative team is hard at work making sure that we're in a position to deliver more .

Speaker #7: Michael . Soon after we release the first film .

Speaker #8: Okay , great . That's good to hear . And then more near-term now you see me , now you don't coming out next weekend , what's the general sense you all are getting from tracking on that relative to what you were expecting when you greenlit it ?

Speaker #8: And then the first two movies were pretty big internationally , so should we expect there's a bit more revenue locked in there via some of those international licensing deals than than what we typically see ?

Speaker #7: Yeah , I mean , you know , as I was saying on one of the prior questions , you know , there is no perfect predictive measure .

Speaker #7: And I think tracking has become less reliable than ever . That said , the movie is is tracking much closer to the universe of the first movie .

Speaker #7: So we think that we're traditionally you see , significant degradation between the second and third film . We think that performing in line with or ahead of the second film is possible , and it's important to note this quarter of the year really needs to be judged over multiple weeks .

Speaker #7: You'll recall that when the last Hunger Games movie came out , we had a for multiple off of $44 million opening . And I think a three and a half to four and a half multiple on this film is is is what we should be thinking about the movie .

Speaker #7: There are a lot of social reactions to the movie that we've been screening online , and people are loving the film as it relates to international .

Speaker #7: What I can say definitively is that that international performance has led to high demand from our foreign licensing partners , and so that's already accounted for .

Speaker #7: And we are we are not we don't have a massive domestic gap that we're trying to deal with here . So the economics of this film are already considering its global appeal .

Speaker #7: And Jim could speak to it , but we also have additional benefit not reflected in the individual PNL of this one film . When you make a good film in a franchise like this and have two existing installments out in the marketplace , there is meaningful financial benefit to that .

Speaker #7: Separate and apart from Now You See Me three I .

Speaker #9: Think what you end up seeing is a halo on any of these remakes that we do , or sequels and prequels . We've seen it .

Speaker #9: You can see it with John . Goes up . So we we definitely get a benefit when we have a new one coming out .

Speaker #8: Okay , great . And then final question from me . You talked about the strong growth at Three Arts . Can you just remind us the sizing of that business in terms of revenue and EBITDA and what kind of growth exactly you're seeing ?

Speaker #10: Yeah , Brent , in terms of just sizing the number , we're not going to , you know , disclose that separately . It's not something that we've provided .

Speaker #10: But I'll tell you , we're seeing very strong growth going the second half . And remember in particular it's a nice seasonal business to in the December quarter .

Speaker #10: And so we're seeing nice nice growth going in the second half . And that continued growth into fiscal 27 . We like what we're seeing in that business .

Speaker #10: And our partners there . And Brian can probably give you a little bit more color on the operations .

Speaker #11: Sure Brent . It's Brian from three Arts speaking . Look , operationally we're seeing a lot of positive momentum on the production side of our business where we partner with and produce alongside of our clients .

Speaker #11: You have things like season two and three of the new King of the Hill , which is back on the air , a business we've been involved with , a show we've been involved with from the start .

Speaker #11: Obviously , along with , our partners here at Lionsgate , the success of Hunting Wives , another season for the paper , more seasons for Wrexham , and then , you know , just this week , a third season for Nobody Wants This .

Speaker #11: So we continue in this environment to succeed on the sports side; we have real momentum. As John noted at the top of this call.

Speaker #11: But you know , some interesting , innovative stuff . You know , our client Travis Kelce , who's part of the team we brought over now three Art sports formerly Ana management and a really innovative deal with Jana partners and a bunch of compelling corporate relationships in Travis's world .

Speaker #11: And just growth in the core business . So we feel pretty good about where we're headed , about representation in general as we continue to grow that platform beyond our historical core into other new areas where we , you know , can diversify the offering that we provide to our clients .

Speaker #8: Okay , great . Thanks everyone .

Speaker #1: And the next question comes from Thomas Yeh with Morgan Stanley . Please go ahead .

Speaker #12: Thanks so much . Yeah . Just following up on that industry M&A question as an active seller to many of these companies , it seems like you're still seeing pretty broad strength in the series orders and series pickup environment .

Speaker #12: Is there a sense that consolidation of the buyer pool could change those dynamics? If the broader view is that they'd still be spending as much on content, if not more?

Speaker #12: Perhaps on a consolidated basis ?

Speaker #13: Yeah , that's a great question . It's Kevin speaking . I think uncertainty , when it's hanging over the market makes everybody buy a little bit less .

Speaker #13: The extended process of guidance and paramount , you know , froze Paramount for a lot of time . We're pretty excited about that being resolved .

Speaker #13: They've laid out to the selling community what they're looking for there . They have an appetite to buy more dramas and more scripted in general .

Speaker #13: I think you're going to see more clarity around Comcast . Between the Peacock , NBC studio side and Versant , where we have Rainmaker , which has done really well .

Speaker #13: So that consolidation could happen . But if it melts in stronger buyers that have , you know , bigger appetites and are signaling to the selling community that they're healthy , you know , that's a positive .

Speaker #13: Obviously , the more buyers than not is good , but unhealthy buyers are not good . But we are seeing some green shoots .

Speaker #13: It's not a full recovery , but we've we're off to a nice start . This year . This summer between studio hunting wives , Rainmaker , we just launched a Robin Hood forest is about to go .

Speaker #13: Tomorrow , Spartacus behind it goes and rookie are coming . Ghost just premiered two weeks ago . Rookie in January . It's a nice cadence of things and nice renewals .

Speaker #13: And that's giving us a lot of confidence about the market .

Speaker #12: Okay , helpful . And then John , you mentioned ramping stageplay adaptations in IP monetization . Kind of starting to kick in . Can you just help us think about the ancillary revenue opportunity and the economics that you'd be participating ?

Speaker #12: There ? Is this like a high margin licensing revenue sort of deal ? For a la musical ?

Speaker #5: Well .

Speaker #14: Let's Adam answer that . He's been really driving that business .

Speaker #7: Yeah , I mean , it's not one size fits all . We're looking at each individual opportunity . There are a lot of no risk licensing opportunities in here , but there are certain cases where we will take an investment position .

Speaker #7: It really depends on our comfort level with our being meaningfully additive to the creative process . But each of the projects , John mentioned as it relates to stage and some of the stuff we've talked about in our in our previous conversations , continuing to see really great attendance of the John Wick Live experience in Las Vegas .

Speaker #7: And there definitely is interest in expanding that to other destinations . Our our Triple-A game opportunities and other gaming opportunities around John Wick , and saw and some others that we'll be announcing soon .

Speaker #7: We're seeing increased interest and increased opportunity and we remain on schedule . So I think in totality you are going to see a meaningfully additive financial opportunity coming in the coming years .

Speaker #12: Thank you .

Speaker #1: And the next question comes from Omar Maha's with Wells Fargo . Please go ahead .

Speaker #15: Good evening and thanks for thanks for the question , Jimmy . First , you talked about the backlog . Now at 1.6 billion or up 31% sequentially .

Speaker #15: Can you expand on the puts and takes of this incremental demand in our market trends , improving on the TV side ? Or is this Lionsgate specific driver ?

Speaker #15: Any help on unpacking the underlying strength would be helpful ?

Speaker #10: No , absolutely . The strength is across . Motion picture and TV in particularly the $380 million 30% plus uplift sequentially was driven by both .

Speaker #10: But but majority showing strength in television . So examples like studio season two , rolling in house waves , Housewives season two , Power Book Origins season one , Yellowjackets season four .

Speaker #10: So kind of broadly spread given us visibility as we were anticipating into the second half , as well as into 2027 . And as Jim mentioned a minute ago , you know , with these franchises , whether it be the John Wick franchise or Twilight or Hunger Games , you just have continuing lift in demand .

Speaker #10: And so that's really nice in that window . And I would just say that of that , you know , 1.6 billion , 85 plus percent of that will come in in the next 18 months .

Speaker #10: So this is not only a second half , but it's also well into fiscal 27 . And it's really reflective of how we're rebuilding the pipeline for future revenue and cash flow .

Speaker #10: I'll remind you , that's off balance sheet , which means it's future revenue . And cash flows .

Speaker #15: That's super helpful . And then on leverage , can you remind us what can you do to bring down leverage and where do you think you can get leverage to in the relative near term .

Speaker #15: So maybe twofold question here . How should we think about growth over the near to medium term to drive down leverage . And then just an update on where things stand with three arts and the potential to bring a to bring in a partner there .

Speaker #10: Sure . So look , we're naturally going to deliver I mean , you see it our peak leverage is going to be in Q3 .

Speaker #10: And then back down in Q4 . And then significantly declining as we go into 27 and 28 . And this is really about restocking the pipeline .

Speaker #10: If you think about it , right , in Q3 , we've talked about spin . We're going to have around . Now , you see me in housemaids , if you look at our content , spend , you know , it's generally have throughout the year .

Speaker #10: But more heavily weighted to the mid quarters , meaning Q2 that we're just coming out of and extending as well into Q3 . We'll also have the spin .

Speaker #10: So you'll see net debt balances rise a little bit . And really the trailing 12 months right , is a lower level than usual because of again , we got the spin .

Speaker #10: We're rebuilding the pipeline . And then what you'll see is the delivering will naturally occur with the ramp up in trailing 12 months , adjusted EBITDA .

Speaker #10: I think as we go out into 27 and I would say even into 28 , right , which we're going to have great carryover from 26 into 27 , even stronger carryover from 27 to 28 .

Speaker #10: You know , we're going to get back to that 3 to 3 and a half times leverage that . We're more comfortable with .

Speaker #10: And that is not taking any anything into consideration with regards to a potential three arch transaction . It would obviously result in delivering .

Speaker #14: Yeah , we're talking to 4 or 5 potential partners . We have a nice growth profile as as Brian said , in terms of sports and in terms of our news , personality , business , and we're seeing , you know , really tremendous uptick of activity across the board there .

Speaker #14: We should have more information , I think , for the street in the first quarter and be able to kind of hone in on whether there's a smart deal to be made .

Speaker #14: But if we can find the right partner at the right deal to help us grow that business , we're going to do it .

Speaker #15: Great . And lastly , for me , John or Adam , excited about Michael ? Watch the trailer today and looks great . Here's what's the early feedback on on the trailer .

Speaker #15: And what's the potential opportunity for for this film globally ? Thank you guys .

Speaker #7: The response has been overwhelmingly positive . People have been waiting a long time for this . The trailer , I think , smartly acknowledges that with the very first words that are spoken in the trailer , and we have seen wild enthusiasm .

Speaker #7: I think people are stunned with Jafar's performance even in the short amount that's in this first , relatively brief teaser . I think the production values are there .

Speaker #7: I think when you look at the quality of the filmmaking team and look at the kinds of films that they've delivered in the past , and you look at the successful , the top tier , most successful sort of musical biopics that have ever come out .

Speaker #7: You see a broad range , but all of those broad range results would be fantastic wins for for the filmmakers and for the studio and for our partners at universal and our partners in Japan , as well .

Speaker #7: So I think if you look at the top tier musical biopics , you get a pretty good sense of what the range is and anything in any , in any version of that is going to be a huge success .

Speaker #15: Awesome .

Speaker #9: Thank you again .

Speaker #1: If you have a question , please press star and then one . Our next question comes from Matthew Harrigan with benchmark . Please go ahead .

Speaker #16: Thank you . Living in Colorado , I'm not even a particularly avid Broncos fan , but I can't . I think I'm going to have to take 3 or 4 points off my price target for your signing .

Speaker #16: Travis Kelce . Not a fan of that one . But but seriously , I'm curious on the resurrection movie . It sounds very complicated .

Speaker #16: You know , a marvel movie . Plus on the special effects , I know you're recasting so you don't have to go through the de-aging process even though that's feasible .

Speaker #16: More feasible now from an II vantage point . I think you said you couldn't have done it at all . 2 or 3 years ago , but are you completely confident that you can meet ?

Speaker #16: I . You probably wouldn't be , would have said it already if there was any hesitation . But are you confident you can get that together ?

Speaker #16: And what are the possibilities of that ? Also , breaking into two parts . Similarly , I know it's probably a little early relative to Michael because you've seen so much of Michael .

Speaker #16: And then secondly , you must be really confident . Now you see me , because whether you watch the election night results or the NBA or the NFL , you've got a pretty heavy load of of of commercials for that .

Speaker #16: They're often not full 32nd , but what are you seeing in the costs of advertising from your vantage point ? And what are you doing to change the marketing ?

Speaker #16: The marketing ? I'm a little surprised with AI and everything that it's actually getting harder to attract films . It's kind of intuitively , I would think that you might have better visibility rather than worse , but I know it's always been an art rather than a science kind of a fracturing .

Speaker #16: The question a little bit there , but I'm sure you get it . Thanks .

Speaker #14: Okay , Matt , that was a complicated question , but I'm going to go to our man on the ground . Actually , in Rome , right now to answer the first part of your question , if you're there , let's talk about resurrection .

Speaker #17: Yes , I am . Hey , Matt , I had dinner with Bruce , the producer , and Mel Gibson tonight . I was on the set today , had a visit , actually , with the new ambassador from Italy .

Speaker #17: And the visited . I felt like I was going walking into Jerusalem . The sets are extraordinary . The movie is on time , on budget .

Speaker #17: Mel showed me a bunch of of footage that he shot at dinner . He is quite a filmmaker , and Adam and I hotly pursued him for this movie .

Speaker #17: It is going to be two movies . It is not one movie . It is going to be two movies . And Mel thought his comment to me tonight that it was going to be each one of those pieces would be a less than two hours .

Speaker #17: And but he feels very confident that he's got he's got a real one two punch here . So what I saw today was extraordinary .

Speaker #17: And Mel Gibson can really direct. So we are very optimistic. Matt.

Speaker #14: Thank you, Michael and Adam.

Speaker #7: Yeah . No . So I would add that that the two movies combined cost less than any one movie that the majors anyone tentpole that the major studios have made in the last ten years .

Speaker #7: So the economics of it are actually very powerful . The AFM market begins shortly and it has been written , and it is not incorrect that we once again have absolutely the hottest title out there .

Speaker #7: And we're getting incoming calls from everybody in the foreign distribution space asking to participate . And so the value of it is not only a value that we see , but it's a value that the entire market sees .

Speaker #7: And so we're we're really excited about the opportunity as it relates to your marketing question . I really appreciate the how you framed it , because I can I can tell you that we are being completely competitive in generating awareness and urgency in our films .

Speaker #7: And yet we are still spending 30 to 50% less than competitive studios to do that work . And it is using every bit of available technology to make sure that when you are buying more traditional media , you're buying it in places where people are watching and actually watching the ads , but also leaning into all available digital opportunities , not only the ones you buy , but the ones you create .

Speaker #7: I was I was having only a little bit of fun on the on the now you see me speculation around the heist at the Louvre , but there's a ton of of content that we created to allow the audience to continue to have fun speculating on what happened there .

Speaker #7: The same thing on the Long Walk , when we had the treadmill screening , massive amount of pickup and social engagement on that .

Speaker #7: Sydney Sweeney and Amanda Seyfried , each thing they put out on the Housemaid is generating a massive amount of engagement , and those are things that are not high cost .

Speaker #7: But if you come up with creative , on brand , on message ways to incentivize the audience to share with one another , you can still create a significant motion picture event without spending massive sums of money and being efficient continues to be a hallmark .

Speaker #7: But being efficient if you're not generating awareness would not be good for us or our filmmaking partners and our filmmaking partners are all really excited with the work we're doing .

Speaker #16: Great , great answers . Thank you .

Speaker #7: Thank you .

Speaker #1: And the next question comes from Peter Supino with Wolf Research . Please go ahead .

Speaker #18: Good evening . Jack stayed here on for Peter . My question is with your upcoming slate increasingly concentrated behind larger , more IP driven films , I was curious if those films garner a higher international pre-sales as a percentage of their production budget to offset the concentration risk .

Speaker #18: Thank you .

Speaker #7: Yeah. I mean, I would say that it's not always the case that the percentages change radically. We're actually still able to get terrific collaboration with our foreign partners on our midsize and smaller films.

Speaker #7: But yes , on the bigger films , you sometimes will see a very outsized a participation from our partners . And the the risk profile of each individual film is something that we take very seriously before the movie is greenlit .

Speaker #7: So we're not going into it surprised by that . We have enough Intel to know going in what level of performance we need to hit the profitability threshold that we're aiming for , but we're still seeing great support for our mid and and lower budget films .

Speaker #7: But it is true that on movies like Michael and Hunger Games and Resurrection , that percentage can get up to a really strong number .

Speaker #18: Thank you .

Speaker #1: And the next question comes from Vikram Kesava with Baird . Please go ahead .

Speaker #19: Yeah . Hey , thank you for taking the questions . I have two . My first one is really a follow up to some of your comments .

Speaker #19: There . I'm curious if you could just share some of your observations from the Long Walk and good fortune and really from a higher level going forward , how you plan to balance your investment in the small and midsize portfolio relative to your tentpole films , and then my second question is on the library , you called out the strength there over the last 12 months .

Speaker #19: Curious if you can just talk more about what you think the drivers are that are supporting that performance and how sustainable you think this level is on a go forward basis .

Speaker #19: Thanks .

Speaker #7: Do you want to take the second part first?

Speaker #9: Yeah , sure . I'll take the second part first . It's Jim , thank you for the question . I think you're seeing an expanding amount of contributors that are going into these numbers .

Speaker #9: It's really kind of unique and interesting that we've been growing certain areas . Like if you look at our self-directed channels , that business has started to really help our trailing 12 months .

Speaker #9: The series licensing that I'm seeing in the business right now has changed . I was looking at our numbers recently . We've sold about five times more series than we did five years ago , and the series that we have are really strong and relevant .

Speaker #9: I mean , if you look at our Netflix top ten , we've had nine in the top ten recently , which is a big number for us .

Speaker #9: And then lastly , you know , as we talked about earlier with Adam producing IP that other versions in our library that helps pretty much become a halo for everything else we're doing .

Speaker #9: has

Speaker #9: So all of that is contributing and really I see the strength , you know , staying strong . .

Speaker #7: And as it relates to the slate mix , look , we're never going to we're never going

Speaker #7: big films onto our slate to , to to make it look like we've got tentpoles . We just happen to have a really good stockpile of incredibly valuable content right now .

Speaker #7: So I think when we mentioned a few quarters ago that we were anticipating 2 to 4 tentpoles a year going forward , our development slate is putting us in a position to be able to accomplish that .

Speaker #7: You know , we talked about another resurrection and the possibility of a second Michael film . I think , when we mentioned things like Naruto , which we've talked about on previous calls , I'm not sure everyone was clear on what the growing popularity of manga is in the world , but it has been very clear generally , and specifically in film , how big it is .

Speaker #7: And there is no bigger property than that . We're making huge progress on that front , making huge progress on the monopoly front .

Speaker #7: And a lot of conversation around things like American Psycho . But , you know , whether it's not priced like a tentpole , but we've had a great conversation with James Wan and Jason Blum about the new takes on both the The Saw franchise and the Blair Witch franchise .

Speaker #7: So we think we're going to have films across a broad range of costs , but we should be in that 2 to 4 tentpole a year range for the foreseeable future , because we've got a number of films that have earned it .

Speaker #7: But our midsize and smaller films are things that are coming with great talent , often with great IP or brand value , and we think there will still be a huge opportunity there as well .

Speaker #14: Yeah , I want to emphasize again , for me , the biggest uplift in recent years is the fact that we've taken deficits on television shows and retained rights in the feature film business that no other independent company has done .

Speaker #14: We retain all of our rights . For example , downstream rights to all our films in Latin America . We retain all rights in the UK and in television , while we sometimes will do a cost plus deal , really , we probably have 70% of our television shows , maybe 80% of them .

Speaker #14: We've been taking deficits for them . Even a show like orange Is the New Black , you think about that as a Netflix show .

Speaker #14: That's not a Netflix show . It's on Netflix right now , but it's a Lionsgate show . And in a couple of years , when we're going to get get that back , that will be a very valuable addition to to Jim Packer and his team .

Speaker #14: You know , on a global basis . And so I think we're we're we're starting to see the reward that we've had for taking these deficits all these years .

Speaker #14: And as I said , we've doubled the television contribution over that last ten year period . You know , double it from about 15% to 30% of our of our library .

Speaker #14: So it's all working and addition . Jim has done an amazing job of building the directed channels , whether they're fast channels , whether they're diginet .

Speaker #14: And so right now , anytime we have an avail , anytime it's not sold to a third party . Jim has the ability to monetize that , that title .

Speaker #14: When you've got over 20,000 of those , you can see it's starting to add up . So I think ultimately it's our strategy to be different than every other independent that's starting to pay off .

Speaker #19: Okay . Great . Thank you for the color .

Speaker #1: This concludes our question and answer session . I would like to turn the conference back over to Nilay Shah for any closing remarks .

Speaker #5: Thank you . Please refer to the press releases and Events tab under the Investor Relations section of our website for discussion of certain non-GAAP forward looking measures discussed on this call .

Speaker #5: Thanks all .