Starz Entertainment Corp. Provides Business Update for the Fourth Quarter and Fiscal Year Ended March 31, 2025
- Added 530,000 U.S. OTT subscribers in Q4, growing total U.S. subscriber base by 2%
- Achieved fiscal year goal with $201.5M Adjusted OIBDA
- Strong Q4 performance with $330.6M revenue
- No borrowings outstanding under new $150M revolving credit facility at separation
- Q4 Operating loss of $(136.3M)
- Fiscal year operating loss of $(164.3M)
- High restructuring charge of $177.4M for content portfolio reassessment
- Loss of Canadian subscribers due to carriage dispute
- Total net debt of $615.5M with 3.1x leverage ratio
Insights
Starz shows subscriber growth but posts operating loss amid restructuring charges post-Lionsgate separation; underlying financials appear stable.
The Q4 and FY2025 results reveal a mixed financial picture for Starz as it establishes itself as an independent company. The company posted $330.6 million in Q4 revenue but recorded a substantial operating loss of $(136.3) million, largely due to a $177.4 million restructuring charge related to content portfolio reassessment. When examining the adjusted OIBDA of $93.3 million for Q4 and $201.5 million for the full fiscal year, the underlying business appears operationally sound despite the reported losses.
The subscriber metrics tell a compelling story. The addition of 530,000 U.S. OTT subscribers in Q4 and almost 2% growth in the total U.S. subscriber base demonstrates strong momentum in the direct-to-consumer business. The company now maintains 12.3 million U.S. OTT subscribers and 18.0 million total U.S. subscribers. This growth occurred despite content challenges from industry strikes, suggesting resilient consumer demand for Starz content.
From a balance sheet perspective, the company ended the quarter with $715.0 million in senior unsecured notes and only $17.8 million in cash, resulting in a net debt position of $615.5 million and a leverage ratio of 3.1x. Post-separation on May 6, the debt structure changed to include a $300.0 million Term Loan A facility and $325.1 million in senior unsecured notes, with net debt of $559.1 million. This leverage is manageable but leaves limited financial flexibility as the company navigates independence.
The Canadian subscriber loss of 330,000 due to a carriage dispute is noteworthy but reportedly immaterial to financial results due to low ARPU. The company's decision to align its fiscal year with the calendar year (changing from March 31 to December 31) and the initiation of EPS reporting next quarter reflect its transition to standalone public company status.
Starz shows promising OTT growth amid industry challenges, with strong content driving subscriber acquisition despite restructuring costs.
The 530,000 U.S. OTT subscriber additions represent a significant achievement in the current competitive streaming landscape. This approximately 4.5% quarterly growth in OTT subscribers outpaces much of the industry and suggests Starz's content strategy is resonating with consumers. The company attributes this growth primarily to the successful late-quarter premiere of "Power Book III: Raising Kanan" Season 4, demonstrating the franchise's continued ability to drive subscriber acquisition.
What's particularly notable is that Starz achieved this growth despite facing what they describe as a "strike-impacted slate" - referring to the industry-wide production disruptions from recent labor disputes. This resilience suggests the company has effectively managed its content pipeline and release schedule to mitigate external challenges.
The restructuring charge of $177.4 million related to "strategic reassessment of the company's content portfolio" signals a significant shift in content strategy as Starz adapts to life as an independent entity. This likely represents a combination of content write-downs and changes to production commitments as the company recalibrates its programming approach without Lionsgate's broader content ecosystem.
The Canadian subscriber dynamics highlight the ongoing challenges in traditional distribution. The loss of 330,000 Canadian subscribers due to a carriage dispute illustrates the vulnerability of linear channels in today's environment, though the company's claim that this had minimal financial impact suggests appropriate diversification of revenue streams. The reference to "extremely low ARPU" for these subscribers also reveals the significant monetization gap between traditional and direct-to-consumer models.
With 12.3 million U.S. OTT subscribers and 18.0 million total U.S. subscribers, Starz has established a substantial direct audience relationship that should provide stable recurring revenue, though it remains significantly smaller than industry leaders like Netflix and Disney+. The company's focus on subscriber growth metrics in its earnings release suggests this will continue to be a primary performance indicator for investors to monitor.
Fourth Quarter Revenue was
Fourth Quarter Operating Loss was
Fourth Quarter Adjusted OIBDA was
Fiscal Year Operating Loss was
Delivers on Fiscal Year Goal of
Adds 530k
"For the quarter, we are very pleased to report the company's strong operating and financial results, and excellent subscriber growth. We delivered significant
Fourth Quarter Results
For the fourth quarter, STARZ reported total revenue of
For the fiscal year, total revenue totaled
STARZ ended the quarter with
At the time of separation on May 6, 2025, STARZ had debt of
The Starz Networks segment, which includes operations in
Given that the Company successfully completed its separation from Lionsgate on May 6, 2025—subsequent to the close of the fiscal year—STARZ will not report earnings per share (EPS) for the fourth quarter. The Company will initiate EPS reporting with the quarter ending June 30, 2025. In addition, the Company has adopted a change in its fiscal year end from March 31 to December 31.
STARZ senior management will hold its analyst and investor conference call to discuss results for the fourth quarter ended March 31, 2025, today, Thursday, May 29 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 by clicking on the same link.
1The forecasted operating income (loss) is not reasonably estimable due to the nature of certain individual items: restructuring and other, goodwill impairment and intangible asset impairment, and adjusted share-based compensation expense. The variability of these items could have a significant impact on our future GAAP financial results.
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
nilay.shah@starz.com
Press Inquiries - Contact:
Jennifer Minezaki-Washington
jennifer.minezaki@starz.com
Amounts herein pertaining to March 31, 2025 represent a preliminary estimate as of the date of this business update and may be revised upon filing our Annual Report on Form 10-K with the Securities and Exchange Commission ("SEC"). More information on our results of operations for the year ended March 31, 2025 will be provided upon filing our Annual Report on Form 10-K with the SEC, which we expect to file on or about June 26, 2025.
The matters discussed in this press release 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 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 anticipated benefits of the separation of the 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 registration statement on Form S-4 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.
STARZ ENTERTAINMENT CORP.
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TOTAL REVENUE | |||||||
Three Months Ended | Year Ended | ||||||
March 31, | March 31, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
(Unaudited, amounts in millions) | |||||||
Revenue | |||||||
Starz Networks ( | $ 326.2 | $ 350.1 | $ 1,356.3 | $ 1,382.7 | |||
International | 4.4 | 2.3 | 13.3 | 9.7 | |||
Total Revenue | $ 330.6 | $ 352.4 | $ 1,369.6 | $ 1,392.4 | |||
STARZ ENTERTAINMENT CORP.
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RECONCILIATION OF OPERATING LOSS TO ADJUSTED OIBDA | |||||||||
Three Months Ended | Year Ended | Year Ended | |||||||
March 31, | March 31, | December 31, | |||||||
2025 | 2024 | 2025 | 2024 | 2025 | |||||
Actual | Actual | Actual | Actual | Estimated | |||||
(Unaudited, amounts in millions) | |||||||||
Operating loss | $ (136.3) | $ (30.8) | $ (164.3) | $ (903.5) | NRE | ||||
Depreciation and amortization | 48.1 | 43.1 | 170.3 | 161.8 | 186.4 | ||||
Restructuring and other(1) | 177.4 | 29.4 | 178.0 | 224.8 | NRE | ||||
Goodwill impairment and intangible asset impairment | — | — | — | 663.9 | NRE | ||||
Adjusted share-based compensation expense(2) | 4.1 | 3.8 | 17.5 | 23.2 | NRE | ||||
Adjusted OIBDA(3) | $ 93.3 | $ 45.5 | $ 201.5 | $ 170.2 | $ 200.0 | ||||
Starz Networks ( | $ 92.0 | $ 49.4 | $ 201.8 | $ 177.1 | $ 200.0 | ||||
International | 1.3 | (3.9) | (0.3) | (6.9) | — | ||||
Adjusted OIBDA | $ 93.3 | $ 45.5 | $ 201.5 | $ 170.2 | $ 200.0 | ||||
_______________
NRE: Individual items are not reasonably estimable due to the nature of the items.
(1) Restructuring and other includes restructuring and severance costs, certain transaction and other costs, and certain unusual items, when applicable, as shown in the table below:
Three Months Ended | Year Ended | ||||||
March 31, | March 31, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
(Unaudited, amounts in millions) | |||||||
Restructuring and other: | |||||||
Content and other impairments(a) | $ 167.7 | $ 25.8 | $ 156.4 | $ 213.0 | |||
Severance(b) | 1.7 | 1.4 | 3.4 | 6.8 | |||
Transaction and other costs(c) | 8.0 | 2.2 | 18.2 | 5.0 | |||
$ 177.4 | $ 29.4 | $ 178.0 | $ 224.8 | ||||
_______________________
(a) In fiscal 2023, the Company began a plan to restructure its international business, which included exiting all international territories except for
As the Company continues to evaluate the business and its current restructuring plan in relation to the current micro and macroeconomic environment and Lionsgate's separation of the Starz Business and LG Studios Business, including further strategic review of content and performance and its strategy on a territory-by-territory basis, the Company may decide to expand its restructuring plan and exit additional territories or remove certain content off its platform in the future. The Company may incur additional content impairment and other restructuring charges as it continues to execute its restructuring plan.
(b) Severance costs were primarily related to restructuring activities and other cost-saving initiatives attributable to continuing operations.
(c) Transaction and other costs in the years ended March 31, 2025 and 2024 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities.
(2) The following table reconciles total share-based compensation expense to adjusted share-based compensation expense:
Three Months Ended | Year Ended | ||||||
March 31, | March 31, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
(Unaudited, amounts in millions) | |||||||
Total share-based compensation expense | $ 4.3 | $ 4.3 | $ 18.0 | $ 24.6 | |||
Less: Amount included in restructuring and other(a) | (0.2) | (0.5) | (0.5) | (1.4) | |||
Adjusted share-based compensation | $ 4.1 | $ 3.8 | $ 17.5 | $ 23.2 | |||
(a) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements.
(3) See "Use of Non-GAAP Financial Measures" for the definition of Adjusted OIBDA which is reconciled to operating loss in the table above, the most directly comparable GAAP financial measure.
STARZ ENTERTAINMENT CORP.
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The number of period-end subscribers is a key metric which management uses to evaluate a non-ad supported subscription video service. We believe this key metric provides useful information to investors as a growing or decreasing subscriber base is a key indicator of the health of the overall business. Service subscribers may impact revenue differently depending on specific distribution agreements we have with our distributors which may include fixed fees, rates per basic video household or a rate per STARZ subscriber. The following table sets forth, for the periods presented, subscriptions to our Starz Networks Services:
As of | |||||||||||
3/31/2024 | 6/30/2024 | 9/30/2024 | 12/31/2024 | 3/31/2025 | |||||||
Domestic | |||||||||||
OTT Subscribers | 12.59 | 12.44 | 11.62 | 11.77 | 12.30 | ||||||
Linear Subscribers | 6.76 | 6.49 | 6.21 | 5.91 | 5.70 | ||||||
Total Domestic Subscribers | 19.35 | 18.93 | 17.83 | 17.68 | 18.00 | ||||||
OTT Subscribers | 0.79 | 0.76 | 0.78 | 0.80 | 0.74 | ||||||
Linear Subscribers | 1.66 | 1.61 | 1.54 | 1.45 | 0.86 | ||||||
Total Canada Subscribers | 2.45 | 2.37 | 2.32 | 2.25 | 1.60 | ||||||
Starz Networks | |||||||||||
OTT Subscribers | 13.38 | 13.20 | 12.40 | 12.57 | 13.04 | ||||||
Linear Subscribers | 8.42 | 8.10 | 7.75 | 7.36 | 6.56 | ||||||
Total Starz Networks Subscribers | 21.80 | 21.30 | 20.15 | 19.93 | 19.60 | ||||||
STARZ ENTERTAINMENT CORP.
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This business update presents the following important financial measure utilized by Starz Entertainment Corp. (the "Company," "we," "us" or "our") that is not a financial measure defined by generally accepted accounting principles ("GAAP"). The Company uses non-GAAP financial measures, among other measures, to evaluate the operating performance of our business. This non-GAAP financial measure is 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 ("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 combined 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 and severance costs, certain transaction and other costs, and certain unusual items, when applicable.
Overall: This measure is a non-GAAP financial measure as defined in Regulation G promulgated by the SEC and is in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with United States GAAP.
We use this non-GAAP measure, among other measures, to evaluate the operating performance of our business. We believe this measure provides useful information to investors regarding our results of operations before non-operating items. 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.
This non-GAAP measure is 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 this measure in the same manner and the measure 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 this non-GAAP financial measure is that it is not prepared in accordance with
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SOURCE Starz Entertainment LLC
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