STRZ

Starz Entertainment Corp.’s STRZ second-quarter 2026 adjusted loss of $1.26 per share came much wider than the Zacks Consensus Estimate of a loss of 27 cents.The company reported a net loss of $11.27 per share. This indicates a wider loss from the year-ago quarter's loss of $2.54 per share.Revenues of $307.9 million declined 3.7% year over year but topped the consensus mark of $306 million by 0.68%. The top-line decline reflected continued pressure in linear and other revenues. OTT revenues reached $221.3 million (71.9% of total revenues), up 0.1% from $221.1 million in the year-ago quarter, reflecting positive year-over-year OTT revenue growth and strong audience engagement during the period.Linear and other revenues fell 12.2% year over year to $86.6 million from $98.6 million. The decline more than offset the modest improvement in OTT revenues and drove the overall contraction in the top line. Starz Entertainment Corp. price-consensus-eps-surprise-chart | Starz Entertainment Corp. Quote In the second quarter, total operating expenses rose 39.5% year over year to $483.4 million. Restructuring and other expenses surged to $151.2 million from $6.4 million, largely reflecting $147.2 million of contract termination fees related to certain live-action films under a post-pay-one output licensing agreement.Advertising and marketing expenses increased 10.9% year over year to $70.3 million, while general and administrative expenses rose 37.5% to $40 million. Programming amortization, however, declined to $114.1 million from $162.5 million. In the reported quarter, Adjusted OIBDA came in at $59.9 million, up 79.3% from $33.4 million in the year-ago quarter and above the $58 million reported in the first quarter of 2026.On a trailing 12-month basis, adjusted OIBDA totaled $195.2 million, translating into an adjusted OIBDA leverage ratio of 2.9x at quarter-end. As of June 30, 2026, cash and cash equivalents were $59.6 million, down from $102.1 million as of March 31, 2026. Total debt was $625.1 million and net debt stood at $565.5 million.The adjusted OIBDA leverage ratio was 2.9x at quarter-end, improving from 3.2x a year earlier and 3.1x at the end of March. The ratio is calculated using net corporate debt and trailing 12-month adjusted OIBDA. The company’s $150 million revolving credit facility remained fully undrawn.Net cash used in operating activities was $28.2 million in the second quarter of 2026. Equity-free cash flow was negative $33.4 million, while unlevered free cash flow was negative $14.7 million. For 2026, management raised its adjusted OIBDA growth outlook to mid-single digits from low-single digits. The company also lifted its unlevered free cash flow expectation to the mid-to-upper end of its previously stated $80-$120 million range.STRZ reiterated its expectations for positive year-over-year OTT revenue growth and an adjusted OIBDA leverage ratio of roughly 2.7x exiting 2026. Management also maintained its outlook for a 20% adjusted OIBDA margin in the second half of 2027. Currently, Starz carries a Zacks Rank #3 (Hold).Kontoor Brands KTB, Newsmax Inc. NMAX and Viking Holdings VIK are some better-ranked stocks that investors can consider in the broader Consumer Discretionary sector.Kontoor Brands, Newsmax and Viking Holdings carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Kontoor Brands is slated to announce second-quarter 2026 results on Aug. 12. Meanwhile, Newsmax will report on Aug. 13, and Viking Holdings is scheduled to release results on Aug. 19. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Starz Entertainment Corp. (STRZ) : Free Stock Analysis Report Kontoor Brands, Inc. (KTB) : Free Stock Analysis Report Viking Holdings Ltd. (VIK) : Free Stock Analysis Report Newsmax Inc. (NMAX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the quarter's success to the second-highest audience engagement in company history, driven by the 'Outlander' finale and 'Raising Kanan' season 5. The launch of 'Fightland' marks a strategic shift toward owned original content, which management noted is approximately $2.5 million cheaper per episode than prior licensed arrangements. The company achieved a return to year-over-year OTT revenue growth, validating the balance between recent price increases and subscriber acquisition. Strategic distribution was expanded through a new partnership with Peacock, providing access to 48 million potential subscribers without incremental platform investment. Management emphasized a disciplined approach to M&A, stating they will only pursue initiatives that accelerate the current organic strategy and fit within existing leverage targets. The 'Power' universe continues to serve as a foundational franchise, with management using its high engagement to launch new IP and reduce post-season subscriber churn. Management raised full-year 2026 adjusted OIBDA growth guidance from low-single digits to mid-single digits. and raised its unlevered free cash flow outlook to the mid- to upper-end of its previously provided $80 million to $120 million range. The company anticipates a significant free cash flow inflection point in 2029 following the finalization of cash payments related to the Universal Pay-2 exit. Management expects continued sequential OTT revenue growth through the second half of 2026, supported by the premiere of the 'Michael' biopic and the return of 'P-Valley'. The company is targeting a 20% adjusted OIBDA margin by the second half of 2027, supported by improved OTT economics and operating discipline. Leverage is projected to reach approximately 2.7x by year-end 2026, with a long-term target of 2.5x or below. A $147 million restructuring charge was recorded in Q2 related to the previously announced exit from the Universal Pay-2 agreement. The company obtained firm commitments to increase credit facilities by $100 million—comprising a $67 million term loan A increase and a $33 million revolver increase—to refinance higher-cost programming notes, with the deal expected to close in the third quarter., expected to save $4 million in annual cash interest. Management noted that cash content spend is expected to remain below $600 million annually moving forward as they transition to owned content economics. The company maintains a favorable tax position due to significant Net Operating Losses (NOLs), which is expected to support free cash flow conversion. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management views the Netflix deal as a syndication model for mature content that introduces the franchise to new audiences while STARZ remains the exclusive home for all sequels and spinoffs. The strategy aims to reinvigorate interest in the 'Power' universe, which continues to drive the majority of subscriber acquisition and engagement on the STARZ platform. Management clarified that the Universal titles had almost zero viewership recently as they were being held back for sale, and the exit allows for reinvestment into higher-performing library content. The decision was driven by the observation that they were paying 'Pay-2' premium prices for what was essentially library-level performance. Management believes the streaming market is moving from 'bundling to packaging,' positioning STARZ as a highly complementary premium add-on for broad-based streamers. The Peacock partnership is expected to be a multi-phase rollout with deepening integration to improve discoverability and subscriber buy-flow.

STARZ Increases 2026 Outlook for Adjusted OIBDA and Unlevered Free Cash Flow1 and Reaffirms Year-end Leverage Target of 2.7x2 Positive Year-over-Year OTT Revenue Growth Raising 2026 Outlook Targets for Adjusted OIBDA and Unlevered Free Cash Flow2 Reiterating 2026 Outlook Targets for Positive OTT Revenue Growth and 2.7x Adjusted OIBDA Leverage2 Reiterating 20% Adjusted OIBDA Margin Outlook for the Second Half of 20272 SANTA MONICA, Calif. and VANCOUVER, BC, Aug. 7, 2026 /PRNewswire/ -- STARZ (NASDAQ: STRZ) today reported results for the quarter ended June 30, 2026. This press release includes consolidated financial results for STARZ Entertainment Corp. "Our second-quarter results reflect the momentum we are building across the business and the strength of our content portfolio," said STARZ President and CEO Jeffrey Hirsch. "We delivered another quarter of strong audience engagement and OTT revenue growth, and the success of the 'Fightland' premiere validates our ownership strategy. The progress we are making and our visibility into the back half of the year increase our confidence that 2026 is becoming a more meaningful inflection year for STARZ than we anticipated." Summary of Second Quarter 2026 Financial Results For the quarter ended June 30, 2026, STARZ reported: Revenue: $307.9 million Operating loss: $(175.5) million due largely to a non-recurring restructuring charge Adjusted OIBDA1: $59.9 million Net cash used in operating activities: $(28.2) million Unlevered Free Cash Flow1: $(14.7) million Equity Free Cash Flow1: $(33.4) million As of June 30, 2026, key balance sheet metrics included: Cash and cash equivalents: $59.6 million Total debt: $625.1 million, including a $300.0 million Term Loan A credit facility and $325.1 million in senior unsecured notes Net debt1: $565.5 million Adjusted OIBDA Leverage Ratio3: 2.9x (trailing twelve months) The Company's $150.0 million revolving credit facility remained fully undrawn 2026 outlook: Reiterating outlook for positive year-over-year OTT revenue growth Raising Adjusted OIBDA growth outlook from low-single-digits to mid-single-digits2 Raising Unlevered Free Cash Flow outlook from between $80 million and $120 million to the mid-to-upper end of the range2 Reiterating Adjusted OIBDA Leverage Ratio outlook exiting 2026 estimated to be approximately 2.7x2 Conference Call As previously announced, STARZ senior management will hold its analyst and investor conference call to discuss results for the quarter ended June 30, 2026, today, Friday, August 7, 2026, at 8:00 a.m. ET / 5:00 a.m. PT. Interested parties may listen to the live webcast by visiting the events page on the STARZ Investor Relations website. A full replay will become available this evening at the same link. About STARZSTARZ is the leading premium entertainment destination for women and underrepresented audiences, and home to some of the most popular franchises and series on television. STARZ offers a robust programming mix for discerning adult audiences, including boundary-breaking originals and an expansive lineup of blockbuster movies, and is embodied by its brand positioning "We're All Adults Here." Complementary to any platform or service, STARZ is available across a wide range of digital OTT platforms and multichannel video distributors and is a bundling partner of choice. STARZ is powered by an industry-leading advanced technology, data analytics and digital infrastructure and the highly rated and first-of-its-kind STARZ app. Investor Inquiries – Contact:Nilay [email protected] Press Inquiries – Contact:Jennifer [email protected] The matters discussed in this press release include forward-looking statements, including those regarding expected future performance. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including, but not limited to: the benefits of the separation of Lionsgate's Studios Business and Lionsgate's STARZ Business (the "Separation"); unexpected costs related to the Separation; the substantial investment of capital required to produce and market films and television series; budget overruns; limitations imposed by our credit facilities and notes; unpredictability of the commercial success of our programming; risks related to acquisition and integration of acquired businesses; the effects of dispositions of businesses or assets, including individual films or libraries; the cost of defending our intellectual property; technological changes and other trends affecting the entertainment industry; potential adverse reactions or changes to business or employee relationships; the impact of global pandemics on our business; weakness in the global economy and financial markets, including a recession and past and future bank failures; wars, terrorism and multiple international conflicts that could cause significant economic disruption and political and social instability; labor disruptions and strikes; and the other risk factors set forth in STARZ's Annual Report on Form 10-KT filed with the Securities and Exchange Commission. 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. __________________________________ _______________ _______________ _______________ _______________ USE OF NON-GAAP FINANCIAL MEASURES This earnings release presents the following important financial measures utilized by Starz Entertainment Corp. (the "Company," "Starz," "we," "us" or "our") that are not financial measures defined by U.S. generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with United States GAAP. Adjusted OIBDA: Adjusted OIBDA is defined as operating income (loss) before depreciation and amortization ("OIBDA"), adjusted for share-based compensation ("adjusted SBC"), restructuring and other costs, and unusual gains or losses, (such as goodwill and intangible asset impairment), when applicable. Depreciation and amortization as presented on our consolidated statement of operations. Adjusted share-based compensation represents share-based compensation excluding the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements, which are included in restructuring and other expenses, when applicable. Restructuring and other includes restructuring costs, certain transaction-related and other expenses, and unusual items, when applicable. Goodwill impairment and intangible asset impairment, when applicable. Adjusted OIBDA Leverage Ratio: Adjusted OIBDA Leverage Ratio is defined as Net Corporate Debt (represents total debt, excluding Unamortized Debt Issuance Costs, minus Cash and Cash Equivalents), divided by Adjusted OIBDA for the trailing twelve-months. Unlevered Free Cash Flow: Unlevered Free Cash Flow is defined as net cash provided by (used in) operating activities, less capital expenditures, plus cash paid for interest and taxes. Equity Free Cash Flow: Equity Free Cash Flow is defined as net cash provided by (used in) operating activities, less capital expenditures. Net Corporate Debt: Net Corporate Debt is defined as total debt, excluding Unamortized Debt Issuance Costs, minus Cash and Cash Equivalents. Overall: These measures are non-GAAP financial measures as defined in Regulation G promulgated by the SEC and are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. We use these non-GAAP measures, among other measures, to evaluate the operating performance of our business. We believe these measures provide useful information to investors regarding our results of operations before non-operating items and cash flows. Adjusted OIBDA is considered an important measure of the Company's performance because this measure eliminates amounts that, in management's opinion, do not necessarily reflect the fundamental performance of the Company's businesses, are infrequent in occurrence, and in some cases are non-cash expenses. In addition, the Adjusted OIBDA Leverage Ratio is an important metric as it provides insight into the Company's capital structure and financial risk, helping assess the Company's ability to meet its debt obligations and maintain financial flexibility. Unlevered Free Cash Flow and Equity Free Cash Flow are considered important measures of the Company's liquidity because they provide information about the ability of the Company to reduce Net Corporate Debt and make strategic investments. Net Corporate Debt is used by management to evaluate the Company's overall indebtedness and capital structure by reflecting debt levels net of available liquidity, and is an important measure in assessing leverage, financial risk, and the Company's capacity to service and reduce debt over time. The Company utilizes these measures, among others, to evaluate the performance of its business relative to its peers and the broader market. These non-GAAP measures are commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. However, not all companies calculate these measures in the same manner and the measures as presented may not be comparable to similarly titled measures presented by other companies due to differences in the methods of calculation and excluded items. A general limitation of these non-GAAP financial measures is that they are not prepared in accordance with GAAP. These measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as an alternative measure of operating income, cash flow, net income (loss), or earnings (loss) per share as determined in accordance with GAAP. View original content to download multimedia:https://www.prnewswire.com/news-releases/starz-entertainment-corp-reports-results-for-the-second-quarter-ended-june-30-2026-302845802.html

Interested in Starz Entertainment Corp.? Here are five stocks we like better. Streaming momentum improved: Q2 OTT revenue grew year over year for the first time since Q4 2024, while subscribers increased despite an April price hike. Audience engagement reached its second-highest quarterly level, driven by titles including Outlander, Raising Kanan and Fightland. Profit and cash-flow outlook raised: Adjusted OIBDA reached $60 million, prompting Starz to raise its full-year growth outlook to the mid-single digits. The company also lifted unlevered free-cash-flow guidance to the mid-to-upper end of its prior $80 million–$120 million range. Financial flexibility and distribution expanding: Starz secured commitments to increase credit facilities by $100 million, expected to reduce annual interest costs by about $4 million. New and expanded partnerships with Peacock, Prime Video and Crunchyroll are intended to improve discoverability, reduce churn and broaden subscriber access. Starz Entertainment (NASDAQ:STRZ) reported second-quarter results that management said reflected improving streaming revenue, audience engagement and free-cash-flow generation, prompting the company to raise its full-year adjusted OIBDA growth outlook and increase its unlevered free cash flow guidance. Total revenue for the quarter was $308 million, including $221 million of over-the-top, or OTT, revenue and $87 million in linear and other revenue. CFO Scott Macdonald said OTT revenue grew year over year for the first time since the fourth quarter of 2024. Excluding $3 million of Canadian OTT revenue included in the prior-year period, OTT revenue would have risen 1.4% on a pro forma basis. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Macdonald said the company’s April price increase contributed to improved average revenue per user, with further ARPU gains expected in the second half as promotional subscriber cohorts convert to retail pricing. Management also said total subscribers increased during the quarter despite the price increase, though Starz does not regularly disclose subscriber totals. President and CEO Jeffrey Hirsch attributed the quarter’s performance to the finale of Outlander, the premiere of Raising Kanan Season 5 and The Housemaid. He said the company’s programming lineup produced its second-highest quarterly audience engagement level of all time and marked a fourth consecutive quarter of engagement growth since Starz separated from Lionsgate. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Hirsch also highlighted the debut of Fightland, Starz’s first owned original series. According to Hirsch, the show was Starz’s second-best-rated launch of a new intellectual property franchise and showed strong audience overlap with the Power universe. Alison Hoffman, president of Starz Networks, said the launch brought back lapsed users to the platform and could help reduce post-season churn among Power viewers. Management said the company is emphasizing ownership of original programming as a way to improve content economics and create future licensing opportunities. Hirsch said Fightland costs approximately $2.5 million less per episode than prior programming arrangements while delivering the same amount of content. He added that Starz expects to announce further international arrangements for the series, following its co-commissioning partnership with Sky in the U.K. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Upcoming programming includes the return of P-Valley, Outlander: Blood of My Blood Season 2, the Michael biopic, and additional Power franchise installments. The company said Michael would premiere on the platform Aug. 10 and is expected to serve as a major programming tentpole. Adjusted OIBDA was $60 million in the second quarter, ahead of management’s expectations. Starz raised its full-year adjusted OIBDA growth forecast to the mid-single digits from a previous outlook for low-single-digit growth. Macdonald said adjusted OIBDA is expected to decline to the mid-$30 million range in the third quarter because of higher programming amortization associated with Raising Kanan, Fightland and Blood of My Blood. The company expects fourth-quarter adjusted OIBDA in the mid-$60 million range. Starz reaffirmed its target of reaching a 20% adjusted OIBDA margin in the second half of 2027. Unlevered free cash flow was negative $15 million in the quarter but positive $66 million year to date. Equity free cash flow was negative $33 million for the quarter and positive $35 million year to date. Macdonald said the quarterly outflow reflected the timing of content payments, as management had anticipated, but performance was still better than expected. The company raised its full-year unlevered free cash flow outlook to the mid-to-upper end of its previously stated $80 million to $120 million range. Cash content spending was $182 million in the quarter, and Starz expects full-year cash content spending to be below $600 million following its exit from the Universal Pay-2 agreement. Starz recorded a $147 million restructuring charge in the quarter related to its agreement to exit the Universal Pay-2 arrangement. Macdonald said management expects this to be the final content restructuring charge of that magnitude. He also said 2029 could represent a significant inflection point for free cash flow growth after final cash payments to Universal are completed in 2028. Net debt stood at $566 million as of June 30, while the company’s adjusted OIBDA leverage ratio was 2.9x. The revolver was undrawn. Starz obtained commitments to increase its credit facilities by $100 million, including a $67 million increase to its Term Loan A and a $33 million increase to its revolver. The transaction, expected to close in the third quarter, will allow the company to replace remaining programming notes with lower-cost corporate debt. Macdonald said the refinancing is expected to improve annual free cash flow by about $4 million through lower cash interest expense. Even after adding the $67 million of term debt, the company expects to end 2026 with leverage of roughly 2.7x and remains focused on reaching leverage of 2.5x or below. On distribution, Starz renewed a long-term agreement with one of its largest partners and launched an add-on subscription partnership with Peacock. Hirsch said the Peacock arrangement gives Starz access to the platform’s 48 million subscribers without additional platform investment. Starz also announced a Crunchyroll bundle on Prime Video. Hoffman said the Peacock rollout is expected to deepen over multiple phases, improving discoverability and the purchase flow. She said the company expects to pursue additional bundling arrangements, arguing that Starz’s programming is complementary to broad-based streaming platforms and that bundles can help reduce churn while expanding marketing opportunities. Starz Entertainment (NASDAQ: STRZ) is a global media and entertainment company that operates premium subscription video services across linear television and digital streaming platforms. The company's core offering includes the STARZ and STARZ ENCORE linear networks in the United States, alongside its STARZPLAY streaming service, which is available in North America, parts of Europe, Latin America and select Asian markets. Through its multi-platform distribution strategy, Starz delivers a combination of original programming, feature films and licensed series to a broad subscriber base. At the heart of Starz Entertainment's business is its investment in original content production. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Starz Entertainment Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Investors in Starz Entertainment Corp. (NASDAQ:STRZ) had a good week, as its shares rose 2.2% to close at US$19.79 following the release of its first-quarter results. It was a pretty bad result overall; while revenues were in line with expectations at US$307m, statutory losses exploded to US$9.83 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Taking into account the latest results, Starz Entertainment's eight analysts currently expect revenues in 2026 to be US$1.26b, approximately in line with the last 12 months. Per-share losses are expected to explode, reaching US$18.57 per share. Before this latest report, the consensus had been expecting revenues of US$1.27b and US$3.75 per share in losses. So it's pretty clear the analysts have mixed opinions on Starz Entertainment even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses. Check out our latest analysis for Starz Entertainment Although the analysts are now forecasting higher losses, the average price target rose 19% to 20.75, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Starz Entertainment analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$13.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates. One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would also point out that the forecast 0.3% annualised revenue decline to the end of 2026 is better than the historical trend, which saw revenues shrink 4.0% annually over the past three years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 8.3% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Starz Entertainment to suffer worse than the wider industry. The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Starz Entertainment's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving. With that in mind, we wouldn't be too quick to come to a conclusion on Starz Entertainment. Long-term earnings power is much more important than next year's profits. We have forecasts for Starz Entertainment going out to 2028, and you can see them free on our platform here. It is also worth noting that we have found 1 warning sign for Starz Entertainment that you need to take into consideration. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Interested in Starz Entertainment Corp.? Here are five stocks we like better. Starz beat internal expectations in Q1 fiscal 2026, with adjusted OIBDA of $58 million and OTT revenue of $211 million, while management said the company is on track for low single-digit full-year adjusted OIBDA growth and reaffirmed 2026 guidance. The company is pulling forward its margin target after exiting its Universal Pay-2 deal, saying lower content costs and better economics should help it reach a 20% adjusted OIBDA margin in the back half of 2027, a year earlier than previously planned. Starz is leaning harder into pricing discipline and owned originals, with higher ARPU, all-time-low churn and strong engagement supporting OTT revenue growth, while new originals like Fightland and other upcoming titles are expected to expand its owned-content slate. Starz Entertainment (NASDAQ:STRZ) executives said the company delivered a strong first quarter of fiscal 2026 and is moving faster than previously expected toward its long-term margin target, aided by content cost reductions, pricing discipline and a shift toward owned original programming. President and CEO Jeffrey Hirsch said the quarter coincided with the one-year anniversary of Starz’s separation and argued that the company is now “structurally stronger” than it was at the time of the split. He said Starz has met or exceeded its key first-year financial targets, including improving margins, converting adjusted OIBDA into free cash flow and reducing leverage. → Insider Sales: Top AST SpaceMobile Insider Cuts Postion Over 30% “Calendar 2026 will serve as a financial inflection point for the business,” Hirsch said, adding that Starz is now managing against four core metrics: OTT revenue growth, adjusted OIBDA, free cash flow and deleveraging. CFO Scott Macdonald said first-quarter OTT revenue was $211 million, up from $210 million in the fourth quarter of fiscal 2025. Total revenue was $307 million, down from $323 million sequentially, primarily due to the timing of Canadian licensing revenue. → Light Speed Returns: Corning Cashes In on NVIDIA Growth Adjusted OIBDA was $58 million in the quarter, up sequentially from the prior quarter, driven mainly by lower advertising and general and administrative expenses. On a year-over-year basis, adjusted OIBDA declined due to lower revenue and higher content amortization, partly offset by lower advertising and marketing expenses. Macdonald said the adjusted OIBDA result was ahead of the company’s internal plan, supporting Starz’s full-year forecast for low single-digit adjusted OIBDA growth. He also said quarterly adjusted OIBDA should be more consistent in 2026 than it was in 2025. → Years in the Making, AMD’s Upside Movement Has Just Begun Unlevered free cash flow was $81 million in the quarter, up $147 million year over year, while equity free cash flow rose $136 million year over year to $69 million. Macdonald cautioned that the quarter benefited from lower content spending, which the company expects to catch up in the second quarter, and said Starz is not raising its free cash flow outlook at this time. As of March 31, Starz had net debt of $523 million and a leverage ratio of 3.1x. Macdonald said the company remains confident it can exit the year at approximately 2.7x leverage. Starz’s $150 million revolver remains undrawn. A key development in the quarter was Starz’s decision to exit its Pay-2 agreement with Universal. Hirsch said the Universal titles were “incredibly popular” and had significant box office strength, but their performance on Starz was lower than expected because of high subscriber overlap with Amazon, where the titles were heavily watched before reaching Starz in the Pay-2 window. “We were paying Pay-2 prices for library performance,” Hirsch said during the question-and-answer session. He said Starz plans to reinvest in other high-performing library titles at better economics, using internal data to identify content that can deliver similar performance. Hirsch described the approach as “a little bit of Moneyball,” saying Starz can look across the industry for library titles that recreate the desired performance at lower cost. Macdonald said Starz recorded a $139 million restructuring charge in the first quarter, mostly related to the write-off of content with limited strategic value for its platforms. Because the Universal agreement was entered into in April 2026, the Pay-2 restructuring charge will be recorded in the second quarter. Executives said the revised Universal terms will meaningfully reduce cash payment obligations beginning in 2027. As a result, Starz now expects to reach its 20% adjusted OIBDA margin target in the back half of 2027, a full year earlier than the prior target of exiting 2028. Macdonald said Starz’s decision to de-emphasize subscriber counts is being validated by the results. He said pricing discipline, fewer low-priced entry offers and more annual and multi-month plans helped drive sequential OTT revenue growth. While the company is not disclosing ARPU directly, Macdonald said ARPU increased sequentially and is expected to continue building through 2026 as promotional subscribers move to higher retail rates. Starz recently raised its price to $11.99, with the increase beginning to flow through the subscriber base in the second quarter. During the Q&A session, executives said the April 1 price increase is “digesting really well” and proceeding in line with expectations. The company also said churn reached an all-time low during the quarter, reflecting a reduced focus on acquiring low-value subscribers. Engagement was also strong, with year-over-year engagement up about 8% in the quarter, according to executives on the call. Hirsch said Starz continues to shift toward content ownership as part of its broader strategy to control costs and monetize intellectual property globally. The company’s first Starz-owned original, “Fightland,” is scheduled to premiere July 31. Starz previously announced Sky as a co-commission partner on the series, which Hirsch said improves the unit economics. Starz has also greenlit an untitled Black rodeo drama set in Texas, with production expected to begin this fall. Hirsch said the project is another example of the company building its content library through ownership. Executives highlighted several upcoming and recent titles, including: “Power Book IV: Force,” whose finale helped start the quarter strongly; Season eight of “Outlander,” which Hirsch said reached a four-year series high in its premiere week; “The Housemaid,” which Hirsch said became Starz’s best-performing Pay-1 film in both acquisition and streaming viewership shortly after the quarter; Upcoming series and franchises including “Raising Kanan,” “Outlander: Blood of My Blood” and “P-Valley”; The upcoming “Michael” biopic, which Hirsch said will strengthen the company’s schedule. Hirsch said Starz remains on track to own 50% of its slate by 2027 and suggested the company could accelerate beyond that level. He cited projects including “Fightland,” the Black rodeo drama, “Kingmaker,” “Masquerade” and “All Fours” as examples of a fuller development pipeline. Starz reaffirmed its full-year 2026 outlook, including OTT revenue growth versus 2025, low single-digit adjusted OIBDA growth, $80 million to $120 million of unlevered free cash flow and year-end leverage of about 2.7x. Macdonald said 2027 is shaping up to be a significant year for margin expansion and improved free cash flow due to restructuring benefits, increasing contributions from owned originals and continued content cost reductions. Hirsch also said Starz continues to see two paths to value creation: growing the core business to achieve its margin target and pursuing disciplined M&A opportunities. However, he emphasized that the company does not need M&A to maximize shareholder value, given the strength and profitability of the core business. Starz Entertainment (NASDAQ: STRZ) is a global media and entertainment company that operates premium subscription video services across linear television and digital streaming platforms. The company's core offering includes the STARZ and STARZ ENCORE linear networks in the United States, alongside its STARZPLAY streaming service, which is available in North America, parts of Europe, Latin America and select Asian markets. Through its multi-platform distribution strategy, Starz delivers a combination of original programming, feature films and licensed series to a broad subscriber base. At the heart of Starz Entertainment's business is its investment in original content production. The article "Starz Entertainment Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

STARZ Delivers Positive Operating Cash Flow and Accelerates Margin Expansion Timeline OTT Revenue Grew Sequentially to $211.1 Million Net Cash Provided by Operating Activities was $73.2 Million, a Year-over-Year Improvement of $136.7 Million Unlevered Free Cash Flow and Equity Free Cash Flow were $80.7 Million and $68.7 Million, Respectively Operating Loss was $(152.8) Million Adjusted OIBDA1 Grew Sequentially to $58.0 Million Management Accelerates 20% Adjusted OIBDA Margin Outlook to the Second Half of 2027, One Year Ahead of Prior Guidance2 Management Reiterates All Previously Provided 2026 Outlook Targets SANTA MONICA, Calif. and VANCOUVER, B.C., May 7, 2026 /PRNewswire/ -- STARZ (NASDAQ: STRZ) today reported results for the quarter ended March 31, 2026. This press release includes consolidated financial results for STARZ Entertainment Corp. "As we mark the one-year anniversary of our separation today, I'm proud to report that STARZ is a structurally stronger company than when we separated," said STARZ President and CEO Jeffrey Hirsch. "Over the past year, we have executed with discipline against our strategic and financial priorities to position the company for long-term value creation, and we delivered a strong start to the year, meeting or exceeding all of our key financial targets. Given our progress and one of our strongest content lineups we've had in years, we are increasingly confident in our ability to drive OTT revenue growth, reduce leverage, expand margins, and generate sustainable free cash flow in the years ahead." Summary of First Quarter 2026 Financial Results For the quarter ended March 31, 2026, STARZ reported: Revenue: $306.9 million Operating loss: $(152.8) million Adjusted OIBDA1: $58.0 million Net cash provided by operating activities: $73.2 million Unlevered free cash flow: $80.7 million Equity free cash flow: $68.7 million As of March 31, 2026, key balance sheet metrics included: Cash and cash equivalents: $102.1 million Total debt: $625.1 million, including a $300.0 million Term Loan A credit facility and $325.1 million in senior unsecured notes Net debt: $523.0 million Adjusted OIBDA leverage3 ratio: 3.1x (trailing twelve months) The Company's $150.0 million revolving credit facility remained fully undrawn 2026 outlook reiterated: Positive year-over-year OTT revenue growth Low-single-digit year-over-year Adjusted OIBDA growth Unlevered free cash flow of between $80.0 million to $120.0 million Adjusted OIBDA leverage ratio exiting 2026 at approximately 2.7x Conference Call STARZ senior management will hold its analyst and investor conference call to discuss results for the quarter ended March 31, 2026, today, Thursday, May 7, 2026, at 5:00 p.m. ET / 2:00 p.m. PT. Interested parties may listen to the live webcast by visiting the events page on the STARZ Investor Relations website. A full replay will become available this evening at the same link. About STARZ STARZ is the leading premium entertainment destination for women and underrepresented audiences, and home to some of the most popular franchises and series on television. STARZ offers a robust programming mix for discerning adult audiences, including boundary-breaking originals and an expansive lineup of blockbuster movies, and is embodied by its brand positioning "We're All Adults Here." Complementary to any platform or service, STARZ is available across a wide range of digital OTT platforms and multichannel video distributors and is a bundling partner of choice. STARZ is powered by an industry-leading advanced technology, data analytics and digital infrastructure and the highly rated and first-of-its-kind STARZ app. Investor Inquiries - Contact: Nilay Shah [email protected] Press Inquiries - Contact: Jennifer Minezaki [email protected] The matters discussed in this press release include forward-looking statements, including those regarding expected future performance. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including, but not limited to: the benefits of the separation of Lionsgate's Studios Business and Lionsgate's STARZ Business (the "Separation"); unexpected costs related to the Separation; the substantial investment of capital required to produce and market films and television series; budget overruns; limitations imposed by our credit facilities and notes; unpredictability of the commercial success of our programming; risks related to acquisition and integration of acquired businesses; the effects of dispositions of businesses or assets, including individual films or libraries; the cost of defending our intellectual property; technological changes and other trends affecting the entertainment industry; potential adverse reactions or changes to business or employee relationships; the impact of global pandemics on our business; weakness in the global economy and financial markets, including a recession and past and future bank failures; wars, terrorism and multiple international conflicts that could cause significant economic disruption and political and social instability; labor disruptions and strikes; and the other risk factors set forth in STARZ's Annual Report on Form 10-KT filed with the Securities and Exchange Commission. 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. USE OF NON-GAAP FINANCIAL MEASURES This earnings release presents the following important financial measures utilized by Starz Entertainment Corp. (the "Company," "Starz," "we," "us" or "our") that are not financial measures defined by U.S. generally accepted accounting principles ("GAAP"). The Company uses non-GAAP financial measures, among other measures, to evaluate the operating performance of our business. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with United States GAAP. Adjusted OIBDA: Adjusted OIBDA is defined as operating income (loss) before depreciation and amortization ("OIBDA"), adjusted for adjusted share-based compensation expense ("adjusted SBC"), restructuring and other costs, and unusual gains or losses, when applicable. Depreciation and amortization as presented on our combined statement of operations. Adjusted share-based compensation expense represents share-based compensation excluding the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements, which are included in restructuring and other expenses, when applicable. Restructuring and other includes restructuring costs, certain transaction-related and other expenses, and unusual items, when applicable. Adjusted OIBDA Leverage Ratio: Adjusted OIBDA Leverage Ratio is defined as Net Corporate Debt (represents total Corporate Debt, excluding Unamortized Debt Issuance Costs, minus Cash and Cash Equivalents), divided by Adjusted OIBDA for the trailing twelve-months. Unlevered Free Cash Flow: Unlevered Free Cash Flow is defined as net cash provided by (used in) operating activities, less capital expenditures, plus cash paid for interest and taxes. Equity Free Cash Flow: Equity Free Cash Flow is defined as net cash provided by (used in) operating activities, less capital expenditures. Net Corporate Debt: Net Corporate Debt is defined as total Corporate Debt, excluding Unamortized Debt Issuance Costs, minus Cash and Cash Equivalents. Overall: These measures are non-GAAP financial measures as defined in Regulation G promulgated by the SEC and are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. We use these non-GAAP measures, among other measures, to evaluate the operating performance of our business. We believe these measures provide useful information to investors regarding our results of operations before non-operating items and cash flows. Adjusted OIBDA is considered an important measure of the Company's performance because this measure eliminates amounts that, in management's opinion, do not necessarily reflect the fundamental performance of the Company's businesses, are infrequent in occurrence, and in some cases are non-cash expenses. In addition, the Adjusted OIBDA Leverage Ratio is an important metric as it provides insight into the Company's capital structure and financial risk, helping assess the Company's ability to meet its debt obligations and maintain financial flexibility. Unlevered Free Cash Flow and Equity Free Cash Flow are considered important measures of the Company's liquidity because they provide information about the ability of the Company to reduce net corporate debt and make strategic investments. Net Corporate Debt is used by management to evaluate the Company's overall indebtedness and capital structure by reflecting debt levels net of available liquidity, and is an important measure in assessing leverage, financial risk, and the Company's capacity to service and reduce debt over time. The Company utilizes these measures, among others, to evaluate the performance of its business relative to its peers and the broader market. These non-GAAP measures are commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. However, not all companies calculate these measures in the same manner and the measures as presented may not be comparable to similarly titled measures presented by other companies due to differences in the methods of calculation and excluded items. A general limitation of these non-GAAP financial measures is that they are not prepared in accordance with GAAP. These measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as an alternative measure of operating income, cash flow, net income (loss), or earnings (loss) per share as determined in accordance with GAAP. View original content to download multimedia:https://www.prnewswire.com/news-releases/starz-entertainment-corp-reports-results-for-the-first-quarter-ended-march-31-2026-302766090.html

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes the business's structural strength to its first year as a standalone entity, having met or exceeded all key financial targets including OIBDA and free cash flow conversion. The company is pivoting from a 'quarterly sub chase' to a strategy of pricing discipline, focusing on higher lifetime value customers through annual plans and fewer low-priced entry offers. A strategic exit from the Universal Pay-Two agreement was executed because high subscriber overlap with Amazon resulted in lower-than-projected viewership for those titles on the Starz platform. The content strategy is shifting toward ownership to control costs from inception and enable global monetization of intellectual property, moving away from the constraints of the previous studio structure. Operational efficiency is being driven by 'de-aging' the original programming slate and co-commissioning partnerships, such as the deal with Sky for the series Fightland. Management views the current market environment as a financial inflection point where cash flow timing is aligning with industry norms and OIBDA is becoming more predictable. The target for reaching a 20% adjusted OIBDA margin has been moved forward by 12 months to the second half of 2027, driven by the Universal deal exit and content cost reductions. Management expects ARPU to continue building through 2026 as promotional customers convert to higher retail rates following the April 1 price increase to $11.99. The company is on track to have 50% of its original slate owned by Starz by 2027, with aspirations to eventually own and control the majority of its portfolio. Full-year 2026 guidance assumes low single-digit adjusted OIBDA growth and leverage exiting the year at approximately 2.7x. Future margin expansion beyond the 20% goal is anticipated as the portfolio transitions more fully to owned originals in 2028 and 2029. A $139 million restructuring charge was recorded in Q1, primarily for the write-off of content with limited strategic value. An additional restructuring charge related to the Universal Pay-Two exit will be recorded in Q2 2026, which is expected to significantly reduce cash content spend starting in 2027. A one-year shareholder rights plan was implemented in March to protect the company's valuation and focus during its post-separation transition following significant share turnover. Management identified M&A as a secondary path for growth but emphasized that strategic initiatives must fit within strict leverage parameters and be complementary to the core audience. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained they were paying Pay-Two prices for titles that performed like library content due to Amazon's 'Pay-One B' window overlap. The company will use a 'Moneyball' approach, utilizing data to acquire library titles from various studios that offer similar performance at superior economics. Pricing discipline has led to an all-time low in churn, and a strong content quarter drove an 8% year-over-year increase in engagement. Management stated that avoiding low-value 'sub chases' has improved the overall health and predictability of the revenue base. Management expressed confidence that 'obsessive' fan bases for hits like P-Valley and Outlander remain loyal despite long gaps. The company utilizes low-cost in-app notifications and digital marketing to reactivate these viewers without significant incremental spend.

Image source: The Motley Fool. Thursday, Feb. 26, 2026 at 5 p.m. ET President and Chief Executive Officer — Jeffrey Hirsch Chief Financial Officer — Scott MacDonald President, Starz Networks — Alison Hoffman Head of Investor Relations — Nilay Shah Operator: Good day, and thank you for standing by. Welcome to the Starz Entertainment Corp. Q4 2025 Earnings Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question and answer session. To ask a question, please press 1 on your telephone, and wait for your name to be announced. To withdraw your question, please press 1 again. I would now like to hand the conference over to your speaker today, Nilay Shah from Investor Relations. Nilay Shah: Good afternoon. Thank you for joining us for Starz Entertainment Corp.'s fiscal 2025 fourth quarter earnings call. We will begin with opening remarks from our President and CEO, Jeffrey Hirsch, followed by remarks from our CFO, Scott MacDonald. Also joining us on the call today is Alison Hoffman, President of Starz Networks. After our opening remarks, we will open the call for questions. The matters discussed on the call include forward-looking statements, including those regarding expected future performance. 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 most recently filed 10-Q for Starz Entertainment Corp. Starz Entertainment Corp. 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. The matters discussed today will also include non-GAAP measures. The reconciliation for these and additional required information is available in the 8-K we filed this afternoon, which is available on the Starz Entertainment Corp. Investor Relations website at investors.starz.com. I will now turn the call over to Jeffrey Hirsch. Jeffrey Hirsch: Thank you, Nilay, and thank you everyone for joining us today. It has only been nine months since our separation, and I am pleased to report that Starz Entertainment Corp. delivered another strong quarter both financially and operationally. Before I get into the highlights of the quarter, I want to give everyone an update on how we are executing in our core operations, how we are positioned for 2026 and beyond. 2025 was a very successful year, one in which we exceeded all of our financial guidance. It is a feat we are especially proud of amidst the pressures you see happening across the industry. We ended the year at an all-time high of 12,700,000 OTT subscribers, growing year over year by 7.6%. We grew OTT subscribers in three out of four quarters, including adding 370,000 in the fourth quarter alone. This resulted in a 170,000 total subscriber growth in Q4. We grew total revenue on a sequential basis in both Q3 and Q4. We exceeded our $200,000,000 outlook for 2025 by 2%, delivering $204,000,000, and grew adjusted EBITDA year over year. And we exceeded our leverage target ending the year lower than anticipated, at 2.9 times, versus a 3.1 times guide. The successful 2025 was aided by an exceptionally strong December. Our substantial subscriber growth in the quarter was fueled by the stellar reception to our programming slate. We premiered the highly anticipated Spartacus revival to critical acclaim, and Power Book IV: Force season three delivered impressive in-season viewership growth of 57%. The momentum from Q4 has continued into 2026, resulting in a strong start to the year. The success of our originals proves that our bedrock strategy is working. We deliver edgy premium content for women and underrepresented audiences that broad-based streamers do not address. Content remains core to everything we do. And as we look at the rest of 2026, it is clear we have one of our most compelling lineups of originals. The slate includes the highly anticipated conclusion of Outlander, and Power Book III: Raising Kanan, the premiere of Starz Entertainment Corp.'s own Fightland, the return of Blood of My Blood, and the long-awaited return of one of our biggest hits, P-Valley, from Pulitzer Prize-winning showrunner Katori Hall. These 2026 originals, our pay-one movies from Lionsgate including films like The Housemaid and the Michael biopic, and our robust development pipeline, make it clear that Starz Entertainment Corp. has never been better positioned to keep our audience engaged, entertained, and growing. Before I get into our key financial targets for 2026, I want to recap our operational milestones in 2025. We restructured our Canadian business into a licensing revenue stream, prioritizing our focus on the U.S. market. We greenlit and completed production on our first wholly owned series, Fightland, advancing our strategy of rebuilding our content library through ownership. And this morning, we announced that Sky will come on board as our co-commission partner for Fightland, further improving the already superior unit economics we get from owning the series. We have also made significant strides in de-aging our content slate this year, while still expanding our network-defining franchises Outlander and the Power Universe. More specifically, we successfully launched Outlander prequel Blood of My Blood, and have greenlit a new Power Universe series, Power Origins, which has a supersized 18-episode order, is currently in production, and will give fans an action-packed origin story of fan-favorite characters Ghost and Tommy as ambitious young entrepreneurs. These shifts are critical in achieving our long-term targets of increasing margins to 20%, converting 70% of adjusted OIBDA to unlevered free cash flow, and delevering to 2.5 times as quickly as possible. The changes fortify our long-term path, and set us up to continue the growth we delivered in 2025 through 2026. Our outlook for 2026 is strong. We expect OTT revenue to grow. We expect to deliver low single-digit percentage adjusted OIBDA growth versus 2025. We anticipate generating between $80,000,000 to $120,000,000 of positive unlevered free cash flow, converting the business to positive equity free cash flow. And we expect to end the year at approximately 2.7 times leverage, an improvement from our current 2.9 times leverage and well on our way to reaching our stated goal of 2.5 times leverage. As we stated, we have spent several quarters unwinding some of the legacy constraints of operating within a studio. We believe this has set up the business to drive strong cash flow generation going forward, with 2026 functioning as an inflection point. With the long-term growth of the business as our North Star, we are deemphasizing the need to manage the business around quarterly subscriber levels. As a result, we will not be disclosing subscribers starting with the March 2026 quarter. We remain laser focused on OTT revenue growth, profitability, converting adjusted OIBDA to free cash flow, and delevering. We believe this decision is in the best interest of our shareholders, as it puts us on a path to achieving the targets we outlined. Before I hand the call over to Scott, I want to reiterate that we continue to believe that there is an opportunity to scale our two core demos and grow our business as a result of the increased consolidation across the media landscape. Given our track record of profitably converting our business from linear to digital, and our industry-leading tech stack, we believe we are uniquely positioned to capitalize on potential M&A opportunities. We are poised to increase our scale as assets that are strategically valuable to Starz Entertainment Corp. become available. I will now turn the call over to Scott MacDonald to take you through the financials. Scott MacDonald: Thank you, Jeff, and good afternoon, everyone. I will briefly discuss the fourth quarter's financial results, provide an update on our balance sheet, and discuss our outlook for 2026. It was a strong fourth quarter and calendar year for Starz Entertainment Corp., as Jeff outlined. We were able to reach the key milestones we outlined on our previous calls for both the quarter and the year. And we positioned the post-separation business to drive a significant increase in free cash flow generation from 2025 to 2026 while further bringing down our leverage. Let me start the breakdown of the quarter with an update on our subscribers. Please note that our financials for the fourth quarter reflect the transition of our Canadian operations to a content licensing relationship, and, hence, I will focus my discussion on subscriber trends on Starz Entertainment Corp.'s U.S. business. Starz Entertainment Corp. added 370,000 domestic OTT subscribers in the quarter, reaching an all-time high of 12,700,000 customers. Additionally, total U.S. subscribers grew 170,000 in the period to 17,600,000, as growth in OTT was partially offset by a decline in linear customers. The increase in subscribers in the seasonally strong fourth quarter was driven by demand for our scripted originals, including Force and Spartacus. Moving on to revenue. Total revenue in the quarter was $323,000,000, up 60 basis points on a sequential basis. Sequential revenue growth was driven by an increase in distribution revenue, primarily from revenue recognized in the quarter related to the transition of our Canadian operations to a content licensing relationship, and is reflected in the linear and other revenue line item on our income statement. This growth in distribution revenue was partially offset by a decline in linear and OTT revenue, which stemmed from ongoing traditional linear declines and heavy holiday seasonal promotions, including lower-churn multi-month plans. Adjusted OIBDA for the quarter was $56,000,000, up over 100% due to lower programming amortization, lower advertising and marketing, and higher revenue. We ended the calendar year with $204,000,000 of adjusted OIBDA, exceeding our $200,000,000 outlook. Looking at the balance sheet, we ended the quarter with net debt of $589,000,000, roughly flat with Q3 levels. Total gross debt was flat at $625,000,000 and includes $325,000,000 of our 5.5% senior unsecured notes as well as $300,000,000 of our Term Loan A. Cash was $36,000,000, and our $150,000,000 revolver remained undrawn at the end of the period. Leverage at the end of 2025 was 2.9 times, better than our previous guidance of exiting the year at 3.1 times. Looking forward, as Jeff noted in his prepared remarks, 2026 is going to be a year with significant focus on driving increased free cash flow. More specifically, in 2026, we expect unlevered free cash flow to range between $80,000,000 to $120,000,000, and we expect to generate positive equity free cash flow for the year. This represents approximately an $80,000,000 to $120,000,000 improvement year over year in both measures. The improvement in cash flow stems from lower cash content spend in 2026 versus 2025, which drives a closer alignment of cash content spend with the programming amortization expense reflected on our income statement. Finally, as we complete the transition in the first few months of 2026 from being part of a studio business, and bringing our content payment timing in better alignment with industry norms, with improved free cash flow and another year of at least $200,000,000 of adjusted OIBDA, we expect our leverage to continue to decline year over year and exit the year at approximately 2.7 times. We will now open for questions. I will turn the call back to Nilay for Q&A. Nilay Shah: Operator, could we open up the call for Q&A? Operator: Yes. Thank you. To ask a question, please press 1 on your telephone, and wait for your name to be announced. To withdraw your question, please press 1 again. One moment for questions. Our first question comes from Brent Penter with Raymond James & Associates. You may proceed. Brent Penter: Hey, good afternoon, everyone. Thanks for taking the questions, and first and foremost, appreciate the $0.50 hold music there. So good to see the $100,000,000 target exceeded in 2025 and then expected to grow in 2026. Can you just walk us through some of the moving pieces? You talked about OTT revenue up. How should we think about total revenue? And then with that 20% margin target out there, exiting 2028, what kind of progress in 2026 does the guidance contemplate? Jeffrey Hirsch: Hey, Brian. How are you? I am looking forward to seeing you on Monday. I will take the second question in terms of the margin. So we are well on our way to executing against getting to that 20% margin coming out of calendar 2028. You will see a slight improvement in 2026, but the lion's share of the improvement really comes in 2027 and 2028 when you start to see the Starz Entertainment Corp. originals really become a lion's share of our programming slate. And there is a lot of de-aging of the content there, ownership of the content we announced, offsetting some of the costs by bringing Sky in on Fightland as the co-commission partner. So when you take all of the de-aging of the content, Starz Entertainment Corp.-owned content, creating that incremental revenue stream by selling it internationally, you really start to see us move significantly toward that 20% margin in 2027 and 2028. Scott, do you want to take the first part? Scott MacDonald: Well, I would just say on OTT revenue, we feel really good about growth next year. When you look at our slate, it is probably one of the best we have ever had. It is very consistently placed throughout the year. So we feel really good about that as well as our focus on our pricing strategy. Brent Penter: Got it. And then thanks for the commentary on industry consolidation. Sounds like you all are ready to capitalize if there is an opportunity. So I guess what kind of assets would you be interested in, and then how should we think about the constraints in terms of your ability to buy something? Is there a leverage level you want to go above or an equity valuation that you would want to be at before doing any kind of deal, or just can you help frame those constraints? Jeffrey Hirsch: Yeah, great question. I am not going to comment on our conversations to date, but what I will say, and we have said this repeatedly, we have two very valuable core demos that make us really complementary and important in the ecosystem, and there are a lot of, I would say, linear networks out there that have great brands that kind of complement our two core demos, but are really marooned on the linear side of the business without any kind of tech capability or desire from their larger corporate parent to try to transition them and them, with their consumers that have moved to the digital side. And so those are kind of the characteristics that we look at to make sure that we are continuing to lean into what we do on an SVOD side much more on an ad-supported side. And, again, we continue to drive leverage down. Scott and I continue to focus on getting leverage down to that 2.5 times. And so that is where we would like to operate. So any kind of deal that we do, we would have to stick within that kind of leverage constraint to keep it around. We do not really want to operate a business that is four or five, six or times levered. And so we will be very cautious about what kind of deal we do when it comes to leverage. Brent Penter: Got it. And then putting M&A aside, given that free cash flow is starting to inflect, how do you rank order your other capital allocation priorities? Obviously, delevering has been the top goal so far, but as you start to get closer to that 2.5 goal, what are your other capital allocation goals? And, you know, at what point given where the valuation is do you start to consider shareholder returns? Scott MacDonald: I think we look at this as it is going to be a good problem to have as we move forward. As I noted, we expect free cash flow to improve or come in the range, on an unlevered basis, $80,000,000 to $120,000,000. That is a significant improvement over the year. You will start to have cash that will start to build, which will give us an opportunity to delever, further invest in the business. And at that point, we would be in a position to make the decision to start returning some of that cash to shareholders. Brent Penter: Okay. Great. Thanks, everyone. Nilay Shah: Thank you. Operator, could we get the next question, please? Operator: Our next question comes from Thomas Yeh with Morgan Stanley. You may proceed. Thomas Yeh: Thanks. On the OTT subscriber momentum into this year, I think you mentioned Q1 is pacing pretty healthy. Can you just talk about the retention patterns that you are seeing for the subscribers that might have come in for Spartacus or came back for Power Book IV season three? Is the slate structured to run that retention through, or is there something more to do there still? Jeffrey Hirsch: I think there are really two components to that. One is the slate is really set up to have a great connected year throughout the year. We have some of our biggest shows throughout the year, you know, Kanan, P-Valley, Fightland. That is a real long good run across the year against one of our demos. We have got the Outlander finale, Blood of My Blood coming in. We have a couple acquisitions to fill the gaps there. So we have a great complete slate, again surrounded by great movies from the Lionsgate pay-one and the Universal pay-two. That plus, we really deployed what we have seen in our data. We really deployed longer-term offers, so annual offers, which we see really have, you know, when people roll from that twelve-month offer to retail, the take rate up to retail is significantly higher, and so you see a lot more spike in ARPU at the end of those offers. And they are also great for long-term churn. And so the combination of a great slate and longer-term offers really lead us to push churn down over the next twelve to eighteen months. Thomas Yeh: Okay. That is helpful. Anything on the distribution partnership side that is kicking in as well, or any update on progress there in terms of the bundled partnerships that you have taken on? Alison Hoffman: You know, Thomas, we continue to be at the forefront of bundling. This is really a focus for us. We have set up the business to be a complementary or an add-on partner to a broad-based streamer, to targeted streamers, and so that is a real focus for us. I think that we are excited to expand our bundling relationships and we are excited to see expansion in our distribution relationships. And we think that even with the disruption in the industry that those will come. And just to comment on particularly the bundling piece, our data is showing that it is very good for business. The bundles that we have in place are expanding our TAM. They are driving net new additions to the business. They are revenue accretive, and then also ultimately are driving better retention for the business. So bundling and distribution are a big focus for us, and we are excited about the year to come. Thomas Yeh: Okay, great. And then last one for me. You have talked about a timeline to get to 60%+ slate ownership. If we just think about the opportunities there, is it fair to assume that we should think about the international sales as concurrent with that ramp? And then ancillaries maybe start to build thereafter. Jeffrey Hirsch: I think that is spot on. We have announced four originals that we have in some stage of production. All Fours, we have just brought in Plan B, a production agency, to help produce that show, and we are super excited about that. Kingmaker Masquerade, the rooms have just finished, and we are just getting the materials into a place. We are out looking for production partners there as well to see where we are going to shoot those shows and at what cost. And, again, as you saw with the Sky announcement this morning, we have somewhat of a first-look deal with Sky where they continue to look at our slate and be excited about it, and I expect that partnership to build and grow. Also, Fightland was—Lionsgate, who is our international sales partner today, took Fightland out to Content London last night to very, very great reviews. So outside of the Sky market, Lionsgate will sell that for us. So I expect the unit economics of Fightland to only continue to get better. Thomas Yeh: Okay. Appreciate it. Thank you. Nilay Shah: Operator, could we get the next question, please? Operator: Thank you. Our next question comes from David Joyce with Seaport Research Partners. You may proceed. David Joyce: Thank you. Couple things. Last year, you had a few volatile quarters of cash flows in and out and margins up and down, tied to some of the final content arrangements with Lionsgate. How should we think about the cadence this year of both EBITDA and free cash flow? And on the free cash flow side, is it going to be moving around based on spending for originals? That is the first question. Scott MacDonald: Okay. Thanks, David. That is a good question. When you think about our P&L, it has been very up and down. A lot of that was driven by the transition from being part of a bigger studio. Same thing with the related cash. We worked over the last few months to bring that into better alignment. We worked with our teams just to better sync up when we are spending the dollars on the production and getting that more in alignment when they are much more in line with industry standards. When you are part of a bigger organization, the cash management is just totally different. It is not necessarily based on just what Starz Entertainment Corp.'s needs are. So we feel like we are getting that into a really good place now as we move into 2026. There is a little bit of work to do here in the first part of the year, but we feel like we are on a really good glide path to improve our spend. And we see content spend coming in under about $650,000,000 next year. From a P&L cadence, you will see very consistent over the year, especially the first three quarters. The fourth quarter in 2026 will be a more positive quarter, but the first three will be very consistent. It will not be as choppy as you have seen in the past. David Joyce: Thanks. And on my other question, I see you have got $41,000,000 in production loans now. How many projects is that for? Is that just Fightland or is that a couple others? And how many originals do you think will be in production by the time you are exiting 2026? Scott MacDonald: That is just for Fightland, that particular production loan. We look—it is very cost-effective cost of capital, so we like to use those. They help us line up our cash flows with those shows. As we greenlight the new shows coming up here, we would expect to have production loans for those shows. It will take time as those will build up over time. But, you know, at some point the show will be completed, you will repay the loan. So it should end up being a fairly consistent balance after we get through the end of this year. David Joyce: Thank you. Scott MacDonald: Thanks. Nilay Shah: Operator, could we get the next question, please? Operator: Thank you. Our next question comes from Vikram Kesavabhotla with Baird. You may proceed. Vikram Kesavabhotla: Yes. Hey, thanks for taking the questions. Wanted to follow up on the co-commission deal with Sky. Can you talk more about why they were the right partner? And from a higher level, when you look at the content slate, the planned, how would you characterize the demand environment for your programming internationally? Jeffrey Hirsch: Hey, it is Jeff. Thanks for the question. We think that we have seen in the past, when we were in the international business before, that the U.K. market is an incredible market for all of our shows. And over time, that has actually expanded in France as well. And so we think there is a real big appetite for our content in some of the biggest international markets. We have had a great relationship with Sky. We have licensed Amadeus from them. We have licensed Sweet Pea from them. And so we have an ongoing relationship with them. I think they are very interested in what we have in production, and I think there are others that will be as well. And so, I think the slate that we have designed, we have obviously designed it with international revenue in mind. And I expect that to continue to grow as we get more ownership back onto the network and own our own library. Vikram Kesavabhotla: Okay. That is helpful. And then, you know, you referenced the pricing strategy a few times in your previous answers. Can you just elaborate more on your plan there? I mean, do you think there is runway for you to raise price on your subscriptions over time? And how do you plan to manage the cadence of that going forward? Jeffrey Hirsch: Yeah. So as we have said and will continue to say, we are a complementary service. We have always wanted to be underpriced—way underpriced—relative to the broad-based streamers out there. And so as they continue to raise rate, it gives us room to raise rate. You have seen the broad-based streamers raise anywhere from $1 to $3 over the last couple of years. So it has created a lot of room for us to have some pricing power against the broad-based streamers, and we will continue to look at that—right time, right place, right slate—to determine whether that is right for our consumers. So we will watch the industry, watch the broad-based streamers, then we will make decisions based on where we think is right to drop that in. Nilay Shah: Thanks, Vikram. Operator, could we get the next question, please? Operator: Thank you. Our next question comes from David Karnovsky with J.P. Morgan. You may proceed. Douglas Samuel Wardlaw: Hi. Doug Wardlaw on for David. I just want to get an idea of how you guys think about relying on spin-off shows like Power and Outlander versus new originals. Obviously, each piece of content kind of plays a large part in what sub growth looks like in the quarter. So I guess long term, how do you weigh starting a new show versus a spin-off of a sure thing? Thanks. Alison Hoffman: Thanks for the question. Franchising here at Starz Entertainment Corp. is a real kind of power of ours. As you know, we have successfully franchised Power into three successful spin-offs and one currently in production. And these are really reliable drivers of engagement, drivers of acquisition for the business. Same with Outlander. You know, Outlander has been on the air since 2014 and still drives a huge engaged fan base. And we successfully launched Blood of My Blood last season. But what they also provide is a real platform or lead-in for new shows. And so, what you will see is you will see us using these reliable franchises to launch new IP and establish new IPs with audiences so that we can bring, thread audiences from one show to the next as we are marketing and expanding our TAM with new audiences. So it is a real part of our programming strategy, and it is something that we think a lot about in terms of how we make investments and how we schedule. Douglas Samuel Wardlaw: Great. Thank you. Nilay Shah: Thanks, Doug. Operator, could we get the next question, please? Operator: Thank you. And the last question will come from Matthew Harrigan with Benchmark. You may proceed. Matthew Harrigan: Thank you. I should probably apologize for belaboring you with this one. But what is your reaction to C Dance? It caused a lot of volatility in the markets. Are there benefits for—I guess, speaking more broadly, do you see more benefits from you on the AI side as far as development? And I guess secondly, how is the development process differing from when you were under Lionsgate’s weighing? I mean, what parameters are you emphasizing or maybe a little bit different in terms of moving faster or adapting to your demographic even more precisely? Thanks. Jeffrey Hirsch: Hey, it is Jeff. Thanks for the question. I think on the first one, AI is going to be a very powerful tool to enhance the business. I think there are three or four areas that we are using it today, obviously with content and reducing costs. We used it with Spartacus for some of the large scenes in Spartacus, I think very successfully. On the boring side, I think you can do a lot of internal training with AI that you would have to do, you know, and waste hours of employees. Again, for us, with a large-scale DTC business that has over ten years of acquisition data, retention data, pricing data, that coupled with all of the content we have and how to schedule that content to best align around lifetime value and customer churn and marrying all those key KPIs together with hundreds of millions of datasets, I think the AI tools can really help us be efficient and continue to drive profitability for our business. I do believe it will be an additional tool for the industry, and this is still more art than it is science, and I think the creative process will continue to be that way. And we are excited to use it as a tool, but the business is really grown on the success of the uniqueness of our originals. I think that is hard to replicate, and we are excited about that. For the second question, Lionsgate is a tremendous producer of television. We have had a great nine-year run with Kevin and team, and I think that will continue based on the Power Universe that we are still locked at the hip on. And so I do not expect that relationship to change. I think as we go out and start to rebuild our own library again, it gives us the ability to control front-end costs a little better, direct line to the producing partner that way. It also allows us to really get that incremental revenue stream from international that we were not getting as part of being owned by a studio. And so those are probably the two biggest components—that we have a little more control with our team and a little more revenue on the other side. But, again, we are still pretty much locked at the hip with Lionsgate on a lot of our big shows. As I said, they are our sales agent internationally. They are over in London today, I think. PACCAR continues to do a great job maximizing revenue for us there. So I expect that relationship to continue for a long time, and we are excited about that. Matthew Harrigan: Thanks, Jeff. Be interesting to see what your stock does now. Thanks. Jeffrey Hirsch: Thank you. Operator: I would now like to turn the call back over to Nilay for any closing remarks. Nilay Shah: Thank you, operator, and thank you, everyone. Please refer to the News 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. Thanks, everyone. Operator: Thank you. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Starz (STRZ) Q4 2025 Earnings Call Transcript was originally published by The Motley Fool