Starz Entertainment (STRZ) investor relations material

Executive summary

• Q3 revenue rose 0.5% YoY to $322.4M as OTT growth offset lower linear and other revenue; Adjusted OIBDA more than doubled to $44.2M.

• 9M revenue fell 3.5% to $937.2M; net loss widened to $389.1M from $249.1M amid higher restructuring costs and depreciation and amortization.

• Strategy prioritizes OTT revenue and Adjusted OIBDA growth, free cash flow, lower leverage, and longer-tenured subscribers to support more durable revenue growth.

Financial highlights

• Q3 OTT revenue was $226.6M, up from $222.8M; linear and other revenue was $95.8M, down from $98.1M.

• Q3 operating loss narrowed to $21.2M from $34.8M; net loss was $34.8M, or $2.02 per share, versus $52.6M, or $3.15 per share.

• 9M expenses increased 9.5% to $1,286.7M, including $282.0M in restructuring and other costs.

• Unlevered free cash flow was $18.8M in Q3 and $85M YTD; Equity Free Cash Flow was $13.1M in Q3 and $48M YTD.

• Cash content spend was $174M in Q3; 2026 spend is expected below $600M, with improved convergence of cash spend and programming amortization.

Outlook and guidance

• Reaffirmed 2026 positive YoY OTT revenue growth, mid-single-digit Adjusted OIBDA growth, and $100M–$120M Unlevered Free Cash Flow guidance.

• Year-end 2026 Adjusted OIBDA leverage is expected at ~2.7x; the target is 2.5x or lower in H2 2027.

• Targeting a 20% Adjusted OIBDA margin in H2 2027.

• Operating cash flow, cash, the undrawn $183M revolver, receivables monetization and programming obligations are expected to cover known operational and debt-service needs for the next 12 months and beyond.

• Annual free cash flow is expected to increase materially in 2029 as Universal termination payments end in 2028.