Lions Gate Entertainment Corp (LGF-B) reported QQ1 2025 revenue of $834.7 million, down 8.1% year-over-year and 25.3% quarter-over-quarter, reflecting seasonal headwinds and a leaner content slate relative to the prior-year period. Gross profit stood at $362.0 million with a gross margin of 43.37%, while EBITDA reached $358.0 million, equating to an EBITDA margin of approximately 42.89%. However, the company posted a net loss of $59.4 million, or -$0.25 per share, as significant non-operating cost headwinds (notably depreciation and amortization, and interest expense) weighed on bottom-line results. Operating income was $44.4 million, a margin of 5.32%, marking a notable YoY improvement in operating profitability despite a negative net result.
Cash flow remained pressured: net cash from operating activities was negative $158.9 million and free cash flow was negative $167.9 million. A sizable working capital outflow of $503.3 million contributed to near-term cash burn, while acquisitions totaled $259.0 million, contributing to cash outflow in investing activities. The liquidity position shows cash and equivalents of $229.1 million against total debt of $4.2169 billion and net debt of $3.9878 billion, indicating a heavily leveraged balance sheet with limited near-term liquidity runway. Shareholders’ equity is modest at $14.6 million, underscoring a structurally stressed capital structure.
From a qualitative standpoint, the QQ1 2025 results reveal operational stability in gross margins and a disciplined cost base, but the business remains burdened by high leverage, substantial depreciation of intangibles, and a negative free cash flow trajectory. Management commentary on forward guidance is not included in the provided data, leaving the investment thesis highly contingent on deleveraging progress, STARZ monetization, and the ability to convert operating profitability into sustainable cash flow. Investors should monitor Starz subscriber growth and international monetization, content-cycle economics, and the company’s ability to reduce working capital requirements to improve liquidity. Overall, the near-term outlook remains cautiously negative on liquidity metrics, with a potential for margin-driven upside if content costs stabilize and cash flow converts more meaningfully to discretionary uses.