Welcome to the Lionsgate first quarter fiscal 2027 earnings conference 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. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Nilay Shah, EVP, Investor Relations. Please go ahead. Good afternoon. Thank you for joining us for the Lionsgate Studios Corporation's fiscal 2027 first quarter conference call. We'll begin with opening remarks from our CEO, Jon Feltheimer, followed by remarks from our CFO, Jimmy Barge. 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 Adam Fogelson, Chief Revenue Officer Jim Packer, and Senior Advisor to the Office of the CEO at Lionsgate and Co-CEO of 3 Arts, Brian Weinstein. 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. 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. 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. I'll now turn the call over to Jon. Thank you, Nilay, and good afternoon, everyone. I'm pleased to report another quarter with strong financial results and growing momentum across our business. Our pure-play content strategy is working. The balance sheet is strengthening faster than anticipated. Our portfolio of intellectual property is becoming ever more franchise-driven and valuable. Library monetization remains a significant competitive advantage, and our company is increasing strategic optionality in a media landscape that continues to place growing value on scaled content assets. In our film business, we've launched two new marquee-branded properties, Michael and The Housemaid, in a span of just four months, ending the first half of the calendar year with domestic box office market share over 10%. Driven by these films and our strong library, our Motion Picture Group reported its best first quarter results ever. Beyond the box office results, both our performance and the type of content driving this performance, bold, original, and provocative, are reinforcing the Lionsgate brand in real and tangible ways, attracting new creative projects, expanding our filmmaker relationships, and paving the way for new partnerships that will continue to drive us forward. We've lined up a slate that includes more than a dozen branded, repeatable properties over the next three years. Four of these films have wrapped production and are being readied for release. Early indicators for The Hunger Games: Sunrise on the Reaping show that it has the potential to become one of the biggest Hunger Games movies ever. The marketing campaign for Mel Gibson's epic two-part The Resurrection of the Christ will kick off next month with the theatrical re-release of The Passion of the Christ in Dolby and 4K. We wrapped production on John Rambo, directed by Jalmari Helander and starring breakout talent Noah Centineo, as we rebuild the Rambo property into an important Lionsgate film and television franchise. It's set for release next June. We also wrapped production on Caine, with Donnie Yen directing and starring in a movie featuring one of the most talked-about characters in the John Wick universe, also set for release next year. We're preparing to start production on three others. We just announced the addition of Brittany Snow, co-star of our Netflix hit series The Hunting Wives, to a Housemaid Secrets cast that also includes Sydney Sweeney, Kirsten Dunst, and Paul Anthony Kelly. Production is slated to begin in October for a December 2027 release. Writer Chris Thomas Devlin has turned in an incredible script for our groundbreaking new chapter of Blair Witch in partnership with Blumhouse and James Wan's Atomic Monster, to be directed by rising star and 3 Arts client Dylan Clark. We're out to cast on Naruto, which is shaping up to be a major tentpole, the next movie from record-breaking Spider-Man: Brand New Day filmmaker Destin Daniel Cretton, based on the top-ranked manga property in the world. With our diversified slate strategy, we're balancing this trove of IP with great original storytelling driven by incredible talent in front of and behind the camera. All of this is happening against the backdrop of a resurgent domestic box office heading for its first $10 billion year since before the pandemic. Turning to television, there has been a paradigm shift that we believe plays to our strengths. The name of the game in television used to be deep relationships with a handful of major buyers, first the broadcast networks, then the leading cable platforms, and more recently, the streamers. Today, there are many new players throughout the television ecosystem, and our strategy is focused on diversification, having the creative strengths, pricing flexibility, and innovative business models to play across a wide range of different platforms and different types of series in an increasingly fragmented world. We're on the cusp of going perfect 13 for 13 in current scripted series renewals, and notably, that success is spread across 12 different buyers. Our ability to cast a wide net was evident in the two series pickups we secured this week. Amazon's pickup of Friends co-creator Marta Kauffman's improvisational comedy, DINKS, which if you didn't know, means dual income, no kids, driven by an innovative partnership with media giant Publicis Groupe. The pickup of the medical action thriller, Trauma, think Die Hard in a hospital, starring Richard Madden with Prime Video streaming in the U.K., Paramount+ streaming in the U.S. and the rest of the world. One thing in the television landscape hasn't changed, the rewards of playing the long game. When we bought Starz in 2016, the original Power series had just finished its third season. Lionsgate and Starz collaborated on growing Power through a total of six hit seasons, extending it into three hit spin-offs, Ghost, Raising Kanan, and Force, expanding the Power universe with the upcoming new pickups, Power: Origins and Power: Legacy. Together, we've built a strong, enduring, and immensely valuable franchise spanning at least six different series and more than 200 episodes. That value was evident last week when we licensed the first four Power series to Netflix, all four internationally, and the original Power worldwide for the next three years, beginning in November. The deal proved three things. Streamers need a lot of content, we have a lot of content, and that content becomes more and more valuable as it plays everywhere in the world. Turning to the library, we reported another strong quarter of trailing 12-month revenue. What's interesting to note, because it speaks to the depth and diversity of our library, is that the biggest individual contributor in the quarter was a 38-year-old movie, Dirty Dancing. It's also worth mentioning that our film and television backlog grew to a robust $1.5 billion in the quarter. We expect this strong backlog to translate into growth in upcoming library quarters. In closing, we continue to see encouraging signs in our operating environment. The domestic box office is strengthening as a new generation of moviegoers embraces the theatrical experience. New buyers and partners are emerging throughout the television ecosystem for those companies willing to look outside the usual places. Streamer demand for film and television series is helping to keep our library business strong. Our 3 Arts business continues to scale and diversify at a time when management companies have become increasingly valuable gateways to the media ecosystem. AI, properly harnessed, is creating new opportunities to reduce cost, enhance revenue, and accelerate the production process. That's the environment to which we're continuing to adapt our studio, becoming a little leaner, ever more focused, collaborating with digital and traditional storytellers alike, maintaining an entrepreneurial approach to both content and culture, and above all, continuing to grow our incredibly valuable portfolio of branded intellectual properties. Now, I'll turn things over to Jimmy. Thanks, Jon, and good afternoon, everyone. I'll briefly discuss our fiscal first quarter 2027 Studio financial results and provide an update on the balance sheet. For the quarter, Lionsgate Studios revenue grew 48% year-over-year to $777 million, while adjusted OIBDA improved to $79 million. Operating income was $26 million. Reported diluted loss per share was $0.10, and diluted adjusted earnings per share was $0.06. Free cash flow was $129 million in the period, reflecting strong operating performance, including the April release of Michael. Trailing 12-month library revenue was $987 million, roughly in line with the prior year, and our backlog of $1.5 billion was up 21% year-over-year. The continued strength of the library and our growing backlog demonstrate the enduring value of our intellectual property portfolio and provide an important source of recurring revenue and cash flow across market cycles. Studio segment profit, which reflects our motion picture and television segment profits before corporate overhead expense, increased significantly year-over-year to $115 million. We began highlighting our Studio segment profit a few quarters ago because this important metric is generally more comparable to the studio-adjusted OIBDA figures reported by many of our peers. The increase in Studio segment profit was driven by strong motion picture performance. Looking further into motion picture, we saw revenue more than double year-over-year to $587 million, while segment profit reached $105 million, the highest first quarter motion picture segment profit in the company's history. Results were driven primarily by the exceptional performance of Michael, as well as the continued strength in ancillary contributions from The Housemaid. Turning to television. Revenue was $189 million, and segment profit was $10 million. Revenue and segment profit were expectedly down versus the prior year due to the timing of episodic deliveries. We remain confident that television will achieve significant year-over-year growth in fiscal 2027, due to both our previously announced outlook to double-scripted episodic deliveries and our recently announced Power licensing deal with Netflix. We expect TV segment profit to improve sequentially in the second quarter and then accelerate in the back half of the year. Turning to the balance sheet. We ended the quarter with net debt of approximately $1.5 billion, a $121 million sequential improvement. The primary driver was better than expected free cash flow performance, reflecting better end-quarter theatrical performance and recent release ancillary revenues. As a result, leverage improved to 4.3 times, down nearly two turns since the end of March and reaching our mid four times leverage target earlier than anticipated. We continue to believe that de-leveraging will occur naturally over time, with growth in adjusted OIBDA and free cash flow. We're encouraged by the progress we've already made during the first quarter. Additionally, we ended the quarter with $426 million of unrestricted cash on the balance sheet and $800 million of available capacity on our revolver. Our capital structure remains well-positioned with no significant near-term corporate debt maturities. We remain highly confident in our fiscal 2027 outlook, which is supported by continued monetization of recent theatrical releases across downstream windows, increasing television deliveries, sustained strength in our library business, and the Q3 release of The Hunger Games: Sunrise on the Reaping. Accordingly, we continue to expect significant growth in adjusted OIBDA and free cash flow this fiscal year and beyond. Now I'd like to turn the call over to Nilay for Q&A. Thanks, Jimmy. Before we start the Q&A section, I want to remind everyone that last quarter we added some slides to our IR website that highlighted several drivers of our business. We plan on updating those slides in the coming days. Operator, can we open the call for Q&A? We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Considered already. Our first question today is from Vikram Kesavabhotla with Baird. Please go ahead. Thanks for taking the questions. My first one is a higher-level question on the industry. When we look at the box office trends this year, I think there's been a few examples where existing proven IP has continued to perform very well. I think there's also been some examples where proven IP has struggled or at least struggled relative to broader expectations. I'm curious to hear your perspective on some of the factors that are influencing the success and relevance of IP in today's market. The real question behind that is, when we look at your film slate over the next few years, I think there's several examples of sequels or revivals of existing films and franchises. As you've gone through the process of green-lighting these ideas, what are some of the factors that have given you confidence in the health and the relevance of the IP that you're working with and the likelihood of your film slate being successful in aggregate? I realize it's a bit of a high-level question, but it'd just be great to hear your thoughts on how the film slate is positioned relative to some of the broader industry trends that we're observing. Thanks. No, Vikram, it's Adam. I appreciate the question. Obviously, each individual studio has its own perspective, and the metrics that are used to determine what makes a film a good idea or a good bet include box office and all kinds of other ancillary opportunities that come with it. As it relates to Lionsgate specifically, I can tell you that the lens that we're looking at with these projects is, does the movie in question answer audience demand or interest about a particular character or a particular storyline? When we invite the audience to think about an idea that they may never have considered, do they get excited? We have a very robust ongoing communication with our fan bases. Our digital team is, I think, top of class in making sure that we are constantly listening to our fans. You could pick any of the titles, large or small, across our slate for the coming years, and I would tell you that the characters that the stories are focused on or the storylines that are being advanced are answering very direct and very specific questions that have come from the prior films. As long as you are then also making each of those films for the right budget and with the right filmmakers, I think while nothing is certain, your odds of success go up exponentially. As I said, every single one of the films on our slate has more than met the threshold criteria for myself and Jon and the company to feel great about what we're doing. That was Adam, if you didn't know, Vikram. Okay, great. Thank you, Adam. I appreciate the comments there. Separate from that, I also wanted to follow up on the licensing agreement with Netflix for the Power universe. Can you talk more about the potential impact of that deal and what that could represent for the value of your library? Perhaps as part of that, if you could just talk about the broader health of your library business today and how that revenue contribution can trend from here, that'd be great. Thank you. We'll have Jim Packer answer that. First of all, it's just a really great time right now to have library series, especially high-profile signature franchises in the marketplace. I'm sure you've seen a couple of the announcements that are out there. This particular deal has a couple of strategic wins. First of all, Power has been strong internationally, this is going to be transformative for the show and for the franchise. Netflix has an international footprint, the entire franchise is going to grow significantly, I think, because of that. Then we also try to set ourselves up for the next cycle too. We only did a three-year deal. Domestically we'll have Kanan and Force available for the first time in the U.S. for SVOD. Internationally, we're going to have Origins and Legacy available. It's going to set us up for an even bigger global opportunity, at a time when I think the franchise is going to be hitting some new peaks. Really, I think long term, while these deals of this scale don't happen every day, we have a number of important series returning to our distribution organization over the next couple of years. We have Orange Is the New Black, Mythic Quest, Mad Men post-HBO, I think all of those are going to give us another global bite at a time when series are really in demand. I feel very good about it. Okay, great. Thanks everyone. The next question is from Omar Mejias with Wells Fargo. Please go ahead. Thanks for the question. Jon or Michael, just wanted to see if you could give us an update on the M&A front. There's been several press reports indicating parties interested in Lions, including Bellora and Vanity J, among others. Just wanted to get your updated thoughts on how you're thinking about the consolidated media environment and where Lions sits within the ecosystem. Thank you. Thanks for the question. In spite of what the headline suggests, we haven't engaged in any substantive conversations. As a policy, we don't comment on M&A speculation. What I will say is this: given the strength and the breadth of our IP and our franchises, we remain one of the most compelling assets in a rapidly consolidating marketplace. We also recognize that scale matters more than ever in this environment, and that's precisely why the value of our portfolio only becomes more relevant over time. Given the M&A backdrop, the strength of our assets, and our standalone operating performance, we believe we have real strategic optionality, and that's something we're focusing on every single day. That's very helpful. Maybe just shifting to the earnings power of the business. You guys just started the year very strong. Clearly have a lot of momentum on the motion picture business. On the TV side, you just did the licensing deal with Netflix that you talked about and have a very robust backlog. Just curious, how should we think about the earnings power as we look ahead into 2027 and beyond with all the pieces, putting it all together? Thank you. Yeah. I think we've certainly been out there with a bit of a guide to a strong earnings year of 2027. You mentioned 2027. That's this year, actually. We're well on our way to a really strong year. I think the momentum should continue into 2028. We'll see nice growth in 2028 as well. Obviously, our earnings sometimes depends on the performance of three or four different pieces of content. Certainly, if they do better than sort of what we're covering as our base case, I think we could have a really strong year in 2028 as well. Thank you. The next question is from Brent Penter with Raymond James. Please go ahead. Hey, good afternoon, everyone. A few questions. First one on 3 Arts. You talked about the value of that business. Can you update us on the strategic review process there? Is that still ongoing? Can you update us fundamentally on that business? It sounds like some positive trends, anything you can say there? Sure, Brent. It's Brian Weinstein speaking. Thanks for the question. Look, to take it in parts. First, we are focused and remain focused on potential transactions, but not ones that are purely financial. There's some interesting strategic elements in some of the deals we're looking at. So we continue to explore those conversations and find some interest in that. I'd say, operationally, we're pleased with the business, the trajectory of the business. Beyond the core, as we've talked about over time, we're seeing nice momentum, real momentum in new verticals like sports and creator. That's not our roots, but that's where we see lots of excitement. In sports, we've got activity and additions with our clients, Travis Kelce and Myles Garrett, and now Taylor Rooks, and new clients like Colston Loveland and Sophie Cunningham. That group together with others, it just demonstrates the strength of the platform and opportunity to develop content around those relationships. So that's how we think about the sort of new areas. Then getting back to the core. At the same time, our bread and butter, our collaboration between Lionsgate and 3 Arts has really never been stronger. So we have projects like The Hunting Wives and real robust development like Ride or Die and Las Culturistas, the award show, and The Algorithm and Medal of Honor and others. That's deriving about roughly 30 shared projects between Lionsgate and 3 Arts. Finally talking about the industry and the asset class at large. A transaction like the THE•TEAM transaction with Providence Equity buying more of that asset just reinforce what we know, which is these are scarce businesses with premium multiples and scale of talent representation. Businesses like 3 Arts remain a good place to be. Overall, I hope that answers it, but that's how we feel. Yeah, it does. Thanks, Brian. On Michael, now that we're seeing the strong results from that movie, I think there's even more anticipation about the sequel. Just any updates on maybe where that is in process and potential timing? What are the puts and takes on the sequel in terms of the economics? I think maybe some of the film from the first movie can now be used for that. Anything just in terms of budget or costs that you can talk about? Yeah, Brent, it's Adam. Thanks for the question. We are hard at work on making sure that we can put together a sequel that is worthy of the success and the enthusiasm that the first movie generated. We're fully engaged with everybody. While we are not ready to announce everything at the moment, I would tell you that we are targeting a production start towards the end of this year and early next. Think that somewhere between the end of calendar 2027 and the first half of calendar 2028 would be a current thought of roughly where the movie could go. We do have a number of sequences, particularly some big musical sequences, that were shot previously that are almost sure to be incorporated. We are mostly focused right now on how to make sure we can deliver, at the right price, the biggest, best sequel that is what the audience is going to want and deserve after the experience we gave them the first time. We're not ready to give guidance on the budget yet, but we certainly will be able to take advantage of some stuff that we previously shot, as I had said before. Thanks, Adam. Final question from me. The Paramount; Warner Bros. Discovery deal now on pause and the trial not scheduled until March. I guess, what's the view from Lionsgate on that situation? How does it affect you kind of being in limbo here? Are you all better off if that does or doesn't close? Yeah. It's kind of a mouthful. I'd say this, uncertainty is the worst thing for our business, and uncertainty and delay is not good for anybody. We know David Ellison well. We did his first series, Manhattan, some years ago. I can tell you that I was super impressed with him. He loves content. I have no reason not to believe that he will be investing very heavily in content, whether it's a 30 film slate or whether it's at a bolstered Paramount+. I would say for us, a better financed streamer, a competitive streamer, will be better for us. Better for us in terms of original programming, better for us in terms of selling library. That part of it, I think is a real positive for us. I can tell you we've already sold them a new television show. We hadn't been doing that much with Paramount. We hadn't been doing that much with HBO. I'm already seeing signs of it. I'm already talking to them about potentially co-financing feature films. That would be good for us and that would be good for the industry. I would say overall, the more movies that are in the marketplace, while it's competitive, it's good as the rising tide moves all boats up. I guess I would say I'm in favor of this transaction, but most importantly, I'm in favor of certainty and getting all of the delay out of it. Makes sense. Thank you. The next question is from Sean Diffley with Morgan Stanley. Please go ahead. Great. Thanks very much. Two, if I may. First, you talked about a paradigm shift and the TV demand backdrop. I was hoping you could elaborate on that a bit. What would you say your special sauce is in terms of why your content is resonating so much with the streamers? Second, your utilization of AI. I know you guys have a deal with Runway. Maybe you could just talk about how you're using AI to energize and leverage your IP and what kind of cost savings you envision or what kind of creative unlocks you're seeing. Thank you. Hey, it's Kevin speaking. Just to talk generally about the state of the market. To quote the godfather of soul, I feel good. There's a lot going on. The stability that Jon alluded to, the return to active buying on both the Paramount and the HBO front has been great for us. We just announced the Trauma series yesterday with Paramount and Prime Video. I think that's helpful. I think our secret sauce is we're finding ways to get shows on in sometimes non-traditional ways. A fully funded, sponsored series in DINKS, partnering with Amazon. Publicis is a great example. Trauma, starting with a U.K. buyer at Amazon Prime U.K., moving into a U.S. play and a global buyer. All of that stacking up to great things that are not the traditional way that shows are sold and made. Underpinning all of that is the great library successes that Jim alluded to. We're now, relative to our peers in the television space, we're not even pre-teens. They started in the 1950s. We started in the 2000s. Yet we have 20 series under distribution or that we own and have made that are over 100 episodes. They come in a nice cyclical way, obviously with some wins here and there, which is a nice offset to some of the deficiting that we're doing over a slower cadence and that ultimately pay off in something like the Power deal. A lot of it is just blocking and tackling, being in the market with great talent, great partners. Our 3 Arts partnership is amazing, all the great producers we're working with. I would add that Kevin is doing a great job getting people to move to places that other people don't really want to go to, like Serbia, like Ireland, and like New Jersey. Well, some of us like Ireland. Let me take the AI questions, Michael. We really believe that AI is a real opportunity for us, both to grow our revenue and to lower costs in content production. Across all of our day-to-day operations, it's essential that we deploy these tools responsibly, efficiently, and in partnership with the creative talent leading our projects. We're really excited about this tool. The next question is from David Joyce with Seaport Research Partners. Please go ahead. Thanks. A couple questions. First, I wanted to ask a bit more on the Power deal. Granted, Netflix gives much more global exposure than Starz would get, since they're technically just in the U.S. What is the benefit to Starz here? Anything directly financial, or is it just like a catch-up platform and helps with the branding? Secondly, I wanted to ask about the Michael movie. How should we think about the construct of ultimate profitability? Over what period do you kind of think about that? How does the factor of the family being involved impact that? Just wanted to try to drill down on the math there. Thanks. I think success that we have as the owner of Power still inures back to Starz because they continue to have non-exclusive runs, and they've then got, as we discussed, they've got two brand-new shows, Origins and Legacy. One of those they're co-financing together with us. I would say, even since the separation, Starz still is a really important platform partner for us. We want them to do well. I think they're especially a good partner for certain kinds of focused content. I'd like them to think that when we have a win on something that we financed for many years, that's good, and of course, we want it to be good for them. I would say, Jeff and I and Jim Packer and some of us, Kevin Beggs, we spend a lot of time together trying to figure out if there are various win-wins. As you probably know, they're the first piece of our Pay-1 window for our motion pictures, and they are the Pay-1 home, our first window home for Michael Jackson. I think, again, we've got a great relationship. Again, we're happy always for their success, and I think they're happy for ours. Dave, as it relates to your Michael question, I'll just give the answer generally. I would say there's nothing particularly unusual about Michael, in so much as the estate and the filmmakers get an appropriate share of profit participation. There was nothing unusual in this particular case. We also were sharing both the financial responsibility and the upside with our partners at Universal around the rest of the world, say for Kino in Japan. I think you can think of this as pretty traditional. Obviously, it was a big movie. It was an expensive movie. The marketing and distribution globally was handled very efficiently. While we looked at profitability over roughly a 10-year cycle, obviously it's front-loaded over the first few years more meaningfully, not only with the great theatrical performance we had, but the movie was a top performer in PVOD. We're seeing incredible adoption of the movie now as it's moving into its more downstream opportunities, and we think there's going to be a really nice long tail on it. There is nothing unusual about how this movie was constructed, in terms of how the profit is being shared amongst all the participants. Yeah. Appreciate the color. Thank you. The next question is from Matthew Harrigan with StoneX. Please go ahead. Thank you. Reaching back to early kind of formative Lionsgate, Jon used to talk a lot about the superior multiple you were getting on event sales on films relative to the box office rentals, it was pretty striking. I know you've got a huge problem now because you've got some billion-dollar box office films, maybe the second Michael, maybe Naruto, certainly the two Resurrection movies. Presumably, that's harder to do. Do you think that for yourselves and for the industry, you still have a positive trend on that? A few of the movies, I think Resurrection in particular, should just have phenomenal library value. Do you think in a couple years you're going to get a step function lift in the library OCF just on account of the number of hits you're having? I know people are concerned about the roll-off in three years, it looks like some of the pressure there could get offset by growth in the library revenues from both the creative side and deployment of new technologies obviously penetration of new technologies both in the U.S. and overseas. Thanks. If I get your question right, Matthew, I think you sort of made an interesting point, which is when you look at sort of some version of what percentage you're going to get downstream. If you've got a billion-dollar movie, obviously it's going to be a bigger number downstream, but it may not be a bigger multiple number downstream. I would say we'll take that. We'll take as many billion-dollar movies and television shows as we possibly can. I would say the lift that we get, you've seen this, we've seen this every time we've talked about it on these calls when we have the next The Hunger Games coming out, right? You're going to see a huge lift that we're going to get across every ancillary platform for The Hunger Games. You bring up technology. I've never seen through my 42 years, I hate to say it, but 42 years, I have never seen technology not creating incremental benefit and more additional lift for good content and strong content. Kevin mentioned it, Adam mentioned it. We have amazing content. This is one of the reasons we keep putting slides up now on our site, just to remind people how incredible our portfolio of intellectual property and recurring intellectual property is. Everything I put up on the site, maybe people don't realize that every single one of those titles, I think there are over 40, are things that actually we are currently working on some version of, if not more than one version of. In any case, I have never seen, going through history, that any technological advances don't inure to the benefit of incremental revenue of good library content, and I believe that to be the case today. Actually, just as a quick follow-on, this is a little nerdy, 8K, I mean, AI in particular, you can render pretty much the entire library, I imagine, in 8K. Do you think that's something that will have some appeal over time? Every year at CES, it looks beautiful, and obviously the commercial translation has taken more time than people thought going back to the 2021 Tokyo Olympics. I know on the sports side, obviously, it's much harder to do than on what you do on movies and TV, still interesting. Pretty immersive. I think, again, as Michael said, we have to make sure when we're doing generative AI to work really closely with the talent. We always see these as tools that enhance the work that we do with talent. I can say we're experimenting and playing with it in so many different ways. It's certainly using it significantly pre-production, post-production. We're using it now. I just looked at an example where we've got a piece of talent we actually manage at 3 Arts, and they do these podcasts that have never been videoed, and we're actually creating video versions of them, and they're really quite good. There are just some tremendous use cases right now that we're playing with. Again, a year from now, it's going to be a whole different world there. I can tell you, it's saving us money. It's making us more efficient across the board. Every single employee here at this company is trained in AI and is using a 95% adoption right now across the business. Every day we find a more interesting use for it that can save us money or enhance revenue. It's going to be a lot of fun going forward. Yeah. Great. Thanks, Jim. One other thing I would say on the 8K, I do think every time you've seen a new format come around, you have a lot of people that will buy those formats. We have a thing called Lionsgate Limited, where we do 4K. I don't anticipate that we will have any problem at all with the kinds of movies that Adam is producing, keeping that pipeline full for the next generation of technology. Beautiful. Thank you. The next question is a follow-up from Vikram Kesavabhotla from Baird. Please go ahead. Yeah. Hey, thanks for letting me ask a couple more questions here. Maybe first, I want to follow up on the upcoming Hunger Games film. Can you talk about the initial reception to the marketing efforts there and some of the other data points you're monitoring to inform the potential performance of that film? Maybe related to that, how is this impacting the library demand for the previous films in that franchise, and how meaningful of a contribution can that be to the business this year? Yeah, it's Adam. I'll take the first part, then I'll pass it on to Jim. Look, I think when we came out with the first trailer for The Hunger Games, we were pretty public about the fact that it sat just behind Michael as the most viewed trailer in the history of the company. We have seen with every subsequent piece of content, that we have a very excited and engaged audience, and that we are bringing a new audience into the fold. This book meaningfully outsold the prior book. To the question that was asked earlier, these particular games, the second Quarter Quell, have been a rabid topic of conversation amongst fans of The Hunger Games for a long period of time. This movie is setting about with an extraordinary cast and obviously a filmmaking team that has got this movie in their DNA. We are answering the question that the audience has been asking with an incredible cast, I will also tell you that it is one of the best-testing movies that we've ever had at the studio. We think we have all of the tools necessary to deliver an incredible result. I would say on the library front, we're always very strategic on how we window these things, and I think this particular situation, because we had a long runway to plan, we have literally every single month planned out between pretty much now through the launch of the film, in a very kind of calculated way. We also strategically had window on Netflix and some other streamers a while ago, and that just builds the fandom and builds the excitement for the brand. I think you see overall our reported 12-month trailing is always continuing to go up. It's partly due to these new franchises coming into the marketplace and how we draft off of them, whether for transactional, for licensing. I think you'll continue to see strength in our trailing 12 because of it. Okay, great. Thanks for the comments there. Maybe just a couple other follow-ups on the motion picture segment. You called out the ancillary performance of The Housemaid as a contributor to the performance this quarter. How much more runway is left for that as a tailwind to your performance in fiscal 2027? Then maybe related to that, can you talk about kind of the runway for contribution from Michael," given the strength that you're seeing in the windows post the theatrical run? There's definitely a lot of continuing ancillary revenues on The Housemaid. I will tell you, remember that the Pay 1A portion of that was in Q4. Okay? We've got a lot more coming. Michael, in particular, you saw major contributions, obviously, in the first quarter, and a lot more to come over the ensuing three quarters of the year. That's a lot of strength. Looking ahead, we've got Hunger Games coming up in our third quarter, so really feel great about that and how we finish out the year. You see a lot of backlog that's going to be flowing through as well. We're in a position of strength. Okay, great. Then just the last question from me. Jimmy, you talked about achieving your mid 4 times target on leverage earlier than you expected. Can you just talk more about how we should see the leverage trend going forward and some of the key factors that will allow you to continue de-levering the balance sheet? Expect continuing de-leveraging, I would say we did achieve this earlier than I had anticipated. Always confident that we would get there. I expect throughout the year, we're going to continue in this kind of, call it low to mid four. Obviously, we have the 3 Arts potential put in Q4, as we previously talked about. That would be about a half a turn increase. Even if that's the case, we quickly de-lever after that. I think we move into this fiscal 2028 of three to three and a half times leverage, and then below three after that. Okay, great. Thanks, everyone. Appreciate the color. This concludes our question and answer session. I would like to turn the conference back over to Nilay Shah for any closing remarks. Thanks, everyone. Please refer to the press releases and events tab under the investor relations section of our website for a discussion of certain non-GAAP forward-looking measures discussed on this call. Thank you. The conference is now concluded. 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