Starz Entertainment (STRZ) Q3 2025 earnings summary

Executive summary

• Achieved strong financial and operational results, meeting key goals for the quarter and affirming full-year guidance for revenue and U.S. OTT subscriber growth.

• Completed separation from Lionsgate Studios, now operating as a standalone public company focused on premium subscription video services in the U.S. and Canada.

• Strategic shift to content ownership, targeting 20% margins by 2028 and converting 70% of adjusted OIBDA to unleveraged free cash flow.

• Transitioned Canadian business from joint venture to licensing model, generating stable international revenue and simplifying operations.

• Strategic content review led to cancellation and removal of certain programming, with ongoing evaluation of content performance.

Financial highlights

• Third quarter revenue was $320.9 million, up $1.2 million sequentially but down year-over-year; net loss was $52.6 million, or $3.15 per share.

• Adjusted OIBDA for the quarter was $21.8 million, down from $27.2 million year-over-year, reflecting higher marketing costs.

• Cash and cash equivalents at quarter-end were $37.0 million.

• Ended quarter with $588 million in net debt and leverage at 3.4x, within covenant limits.

• Operating loss widened to $34.8 million from $17.0 million year-over-year.

Outlook and guidance

• Affirmed guidance for positive U.S. OTT subscriber and revenue growth, targeting approximately $200 million adjusted OIBDA for the year.

• Management expects cash flow from operations, cash on hand, and available credit facilities to be sufficient for operational and debt service needs for the next twelve months and beyond.

• Content investment expected to decrease year-over-year, improving free cash flow in 2026.

• Cash content spend projected just under $700 million in 2026, trending down to $600–$650 million in subsequent years.

• Ongoing strategic review of content and performance may result in further content removals and impairment charges.