Starz Entertainment (NASDAQ: STRZ) Q1 2026 loss but strong free cash flow
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Starz Entertainment Corp. reported first-quarter 2026 results with an operating loss of $(152.8) million and revenue of $306.9 million, down from $330.6 million a year earlier. Net loss from continuing operations was $(164.9) million, or $(9.83) per share.
Despite the loss, the company generated positive cash flow. Net cash provided by operating activities was $73.2 million, compared with a use of cash in the prior-year quarter. Unlevered free cash flow reached $80.7 million and equity free cash flow was $68.7 million, supported by lower cash paid for programming content.
Starz ended March 31, 2026 with cash and cash equivalents of $102.1 million and total debt of $625.1 million, resulting in net debt of $523.0 million and an Adjusted OIBDA leverage ratio of 3.1x. Adjusted OIBDA was $58.0 million, and management accelerated its outlook for achieving a 20% Adjusted OIBDA margin to the second half of 2027 while reiterating all 2026 outlook targets.
Positive
- None.
Negative
- None.
Insights
Starz swings to strong positive cash flow but remains loss-making.
Starz generated net cash from operating activities of $73.2 million in Q1 2026 versus a cash outflow in the prior-year quarter, helped by lower cash paid for programming content of $113.3 million. Unlevered free cash flow reached $80.7 million, and equity free cash flow was $68.7 million.
However, the core P&L remains pressured. Revenue declined to $306.9 million from $330.6 million, and operating loss widened modestly to $(152.8) million. Results include substantial restructuring and other costs of $139.1 million, driven largely by $128.1 million of content impairments tied to portfolio rationalization and post-Separation changes.
Leverage appears manageable, with net debt of $523.0 million and an Adjusted OIBDA leverage ratio of 3.1x based on trailing twelve-month Adjusted OIBDA of $168.7 million. Management reiterated 2026 outlook targets, including unlevered free cash flow of $80.0–$120.0 million and an expected year-end Adjusted OIBDA leverage ratio of about 2.7x, and pulled forward its 20% Adjusted OIBDA margin target to the second half of 2027.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Revenue: $306.9 million
Operating loss: $(152.8) million
Net cash from operating activities: $73.2 million
+5 more
8 metrics
Revenue
$306.9 million
Quarter ended March 31, 2026; down from $330.6 million in 2025
Operating loss
$(152.8) million
Quarter ended March 31, 2026; versus $(142.3) million in 2025
Net cash from operating activities
$73.2 million
Quarter ended March 31, 2026; improved by $136.7 million year over year
Unlevered free cash flow
$80.7 million
Quarter ended March 31, 2026
Equity free cash flow
$68.7 million
Quarter ended March 31, 2026
Net debt
$523.0 million
As of March 31, 2026
Adjusted OIBDA
$58.0 million
Quarter ended March 31, 2026; grew sequentially
Adjusted OIBDA leverage ratio
3.1x
Trailing twelve months ended March 31, 2026
Key Terms
Adjusted OIBDA, Unlevered Free Cash Flow, Equity Free Cash Flow, Adjusted OIBDA leverage ratio, +2 more
6 terms
Adjusted OIBDA financial
"Adjusted OIBDA1 Grew Sequentially to $58.0 Million"
Adjusted OIBDA is a company’s core operating profit before subtracting depreciation and amortization, further cleaned up by removing one-time or unusual items so it shows recurring cash-earning power. Think of it like measuring a car’s steady fuel efficiency after ignoring a flat tire or a rare detour—investors use it to compare underlying operational performance across periods and companies without distortion from non-recurring events or accounting timing.
Unlevered Free Cash Flow financial
"Unlevered Free Cash Flow and Equity Free Cash Flow were $80.7 Million"
Unlevered free cash flow is the cash a company generates from its core business after paying operating costs and reinvesting in the business, but before any interest or debt repayments. It shows how much cash would be available to all providers of capital—owners and lenders alike—and helps investors compare underlying business performance and value companies without the distortion of different debt levels, like judging a car’s fuel efficiency before adding cargo weight.
Equity Free Cash Flow financial
"Unlevered Free Cash Flow and Equity Free Cash Flow were $80.7 Million and $68.7 Million"
Equity free cash flow is the amount of cash a company generates that is available to pay shareholders after it pays operating costs, reinvests in the business, and handles debt-related payments and borrowings. Think of it as the household money left over after paying bills, fixing the house, and settling loans—funds that could be used for dividends, share buybacks, or retained for future needs. Investors use it to judge how much real cash a company can return to owners and to value a stock.
Adjusted OIBDA leverage ratio financial
"Adjusted OIBDA leverage3 ratio: 3.1x (trailing twelve months)"
A measure of how much debt a company carries relative to its core cash-generating profit, calculated by dividing net debt by adjusted OIBDA (operating income before depreciation and amortization after company-specific adjustments). It matters to investors because it shows how easily a business can cover its debt with recurring operating earnings—like counting how many years of paycheck-sized profits would be needed to pay off a mortgage—so higher ratios signal greater leverage and risk.
content impairments financial
"Net content impairment | 128.1 | | | 167.6"
Separation financial
"following the Separation. These actions included evaluating programming"
Earnings Snapshot
Revenue: $306.9 million · Guidance included
Q1 2026
Revenue
$306.9 million
down vs $330.6 million prior-year quarter
Operating loss
$(152.8) million
slightly wider than $(142.3) million in 2025
Adjusted OIBDA
$58.0 million
grew sequentially from $55.5 million in Q4 2025
Net cash from operating activities
$73.2 million
improved by $136.7 million year over year
Guidance
Management reiterated 2026 targets for positive year-over-year OTT revenue growth, low-single-digit Adjusted OIBDA growth, unlevered free cash flow of $80.0–$120.0 million, and an Adjusted OIBDA leverage ratio of approximately 2.7x exiting 2026, and accelerated its 20% Adjusted OIBDA margin outlook to the second half of 2027.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2026
(Exact name of registrant as specified in its charter)
| N/A | ||||||||||||||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices) (Zip Code)
(604) 648-6559
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange (17 CFR 240.14d-2(b)) | ||||||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| (Nasdaq Global Select Market) | ||||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02. Results of Operations and Financial Condition.
On May 7, 2026, Starz Entertainment Corp., a corporation organized under the laws of the province of British Columbia, Canada (hereinafter the “Company”), issued a press release announcing its financial results for the quarter ended March 31, 2026. A copy of the Company’s press release is being furnished herewith as Exhibit 99.1 and is incorporated herein by reference in its entirety.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number | Exhibit Description | ||||
99.1 | Press Release dated May 7, 2026 | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Starz Entertainment Corp. | ||||||||||||||
| Date: | May 7, 2026 | By: | /s/ SCOTT MACDONALD | |||||||||||
| Scott Macdonald | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
Exhibit 99.1
Starz Entertainment Corp. Reports Results for the First Quarter Ended March 31, 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, CA, and VANCOUVER, B.C., May 7, 2026 – 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
1 See “Use of Non-GAAP Financial Measures” for a definition of Adjusted OIBDA.
2 The forecasted Operating Income (Loss) is not reasonably estimable due to the nature of certain individual items: restructuring and other, and adjusted share-based compensation expense. The variability of these items could have a significant impact on our future GAAP financial results.
3 Total Adjusted OIBDA Leverage Ratio of 3.1x is calculated based on total Adjusted OIBDA of $168.7 million for the trailing twelve-month period ended March 31, 2026. Refer to “Reconciliation of Operating Loss to Adjusted OIBDA” section for further detail.
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
nilay.shah@starz.com
Press Inquiries - Contact:
Jennifer Minezaki
jennifer.minezaki@starz.com
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.
STARZ ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2026 | December 31, 2025 | ||||||||||
| (Amounts in millions) | |||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 102.1 | $ | 35.7 | |||||||
Accounts receivable, net, including other receivables of $10.7 million and $9.9 million as of March 31, 2026 and December 31, 2025, respectively. | 81.7 | 84.4 | |||||||||
| Prepaid expenses and other | 10.8 | 12.1 | |||||||||
| Total current assets | 194.6 | 132.2 | |||||||||
| Programming content, net | 874.0 | 993.8 | |||||||||
| Property and equipment, net | 48.0 | 49.1 | |||||||||
| Intangible assets, net | 627.9 | 690.9 | |||||||||
| Other assets | 44.2 | 47.2 | |||||||||
| Total assets | $ | 1,788.7 | $ | 1,913.2 | |||||||
| LIABILITIES | |||||||||||
| Current portion of debt | $ | 11.3 | $ | 7.5 | |||||||
| Accounts payable | 68.3 | 60.0 | |||||||||
| Programming related payables | 287.7 | 255.2 | |||||||||
| Other accrued liabilities | 57.4 | 49.1 | |||||||||
| Residuals | 22.2 | 27.1 | |||||||||
| Programming related obligations | 127.3 | 87.7 | |||||||||
| Deferred revenue | 54.1 | 52.8 | |||||||||
| Total current liabilities | 628.3 | 539.4 | |||||||||
| Debt | 603.0 | 605.8 | |||||||||
| Production loan | — | 41.4 | |||||||||
| Other liabilities | 74.4 | 72.7 | |||||||||
| Deferred tax liabilities | 4.3 | 7.9 | |||||||||
| Total liabilities | 1,310.0 | 1,267.2 | |||||||||
| Contingencies | |||||||||||
| EQUITY | |||||||||||
Common stock, no par value, unlimited authorized, 16.8 million and 16.7 million shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively. | 731.6 | 735.1 | |||||||||
| Accumulated other comprehensive income | 20.5 | 19.4 | |||||||||
| Accumulated deficit | (273.4) | (108.5) | |||||||||
| Total equity | 478.7 | 646.0 | |||||||||
| Total liabilities and equity | $ | 1,788.7 | $ | 1,913.2 | |||||||
STARZ ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (Amounts in millions) | |||||||||||
| Revenue | |||||||||||
| OTT revenue | $ | 211.1 | $ | 225.5 | |||||||
| Linear and other revenue | 95.8 | 105.1 | |||||||||
| Total revenue | 306.9 | 330.6 | |||||||||
| Operating expenses: | |||||||||||
| Programming amortization | 138.3 | 118.4 | |||||||||
| Other operating | 34.3 | 38.7 | |||||||||
| Advertising and marketing | 50.4 | 58.9 | |||||||||
| General and administrative | 29.1 | 25.4 | |||||||||
| Depreciation and amortization | 68.5 | 48.1 | |||||||||
| Restructuring and other | 139.1 | 183.4 | |||||||||
| Total expenses | 459.7 | 472.9 | |||||||||
| Operating loss | (152.8) | (142.3) | |||||||||
| Interest expense | (13.9) | (10.9) | |||||||||
| Interest and other income | 0.4 | 1.7 | |||||||||
| Other expense | (1.8) | (1.8) | |||||||||
| Loss on extinguishment of debt | — | (0.7) | |||||||||
| Loss from continuing operations | (168.1) | (154.0) | |||||||||
| Income tax benefit | 3.2 | — | |||||||||
| Net loss from continuing operations | (164.9) | (154.0) | |||||||||
| Net income from discontinued operations, net of income taxes | — | 1.0 | |||||||||
| Net loss | $ | (164.9) | $ | (153.0) | |||||||
| Per share information attributable to Starz Entertainment Corp. shareholders: | |||||||||||
| Basic and diluted net loss per common share - continuing operations | $ | (9.83) | $ | (9.21) | |||||||
| Basic and diluted net income per common share - discontinued operations | — | 0.06 | |||||||||
| Basic and diluted net loss per common share | $ | (9.83) | $ | (9.15) | |||||||
| Weighted average number of common shares outstanding: | |||||||||||
| Basic | 16.8 | 16.7 | |||||||||
| Diluted | 16.8 | 16.7 | |||||||||
STARZ ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (Amounts in millions) | |||||||||||
| Operating Activities: | |||||||||||
| Net loss | $ | (164.9) | $ | (153.0) | |||||||
| Less: net income from discontinued operations, net of tax | — | 1.0 | |||||||||
| Net loss from continuing operations, net of tax | (164.9) | (154.0) | |||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | 68.5 | 48.1 | |||||||||
| Programming amortization | 138.3 | 118.4 | |||||||||
| Amortization of debt financing costs and other non-cash interest | 1.1 | 1.1 | |||||||||
| Non-cash share-based compensation | 3.2 | 4.3 | |||||||||
| Other amortization | 2.1 | 1.8 | |||||||||
| Net content impairment | 128.1 | 167.6 | |||||||||
| Loss on extinguishment of debt | — | 0.7 | |||||||||
| Deferred income taxes | — | 0.2 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable, net | 1.8 | 32.7 | |||||||||
Cash paid for programming content(1) | (113.3) | (246.0) | |||||||||
| Other assets | 2.5 | (6.2) | |||||||||
| Accounts payable and accrued liabilities | 5.7 | (1.6) | |||||||||
| Residuals | (1.2) | (0.1) | |||||||||
| Deferred revenue | 1.3 | 5.0 | |||||||||
| Due to LG Studios Business | — | (35.5) | |||||||||
| Net cash provided by (used in) operating activities | 73.2 | (63.5) | |||||||||
| Investing activities: | |||||||||||
| Capital expenditures | (4.5) | (3.9) | |||||||||
| Deferred purchase price of receivables sold | 0.6 | — | |||||||||
| New Lionsgate revolving credit facility – increases | — | 303.7 | |||||||||
| New Lionsgate revolving credit facility – decreases | — | (251.3) | |||||||||
| Net cash (used in) provided by investing activities | (3.9) | 48.5 | |||||||||
| Financing activities: | |||||||||||
| Debt – borrowings, net of debt issuance and redemption costs | — | 96.5 | |||||||||
| Debt repayments | — | (96.5) | |||||||||
| Programming related obligations – borrowings | 104.1 | 113.3 | |||||||||
| Programming related obligations – repayments | (107.0) | (98.3) | |||||||||
| Parent net investment | — | 3.6 | |||||||||
| Net cash (used in) provided by financing activities | (2.9) | 18.6 | |||||||||
| Net change in cash and cash equivalents | 66.4 | 3.6 | |||||||||
| Cash and cash equivalents – beginning of period | 35.7 | 14.2 | |||||||||
| Cash and cash equivalents – end of period | $ | 102.1 | $ | 17.8 | |||||||
__________________________________
(1)Cash paid for programming content for the three months ended March 31, 2025 includes $157.1 million from the licensing of program rights from the LG Studios Business.
STARZ ENTERTAINMENT CORP.
RECONCILIATION OF OPERATING LOSS TO ADJUSTED OIBDA
| Three Months Ended | Trailing Twelve Months | ||||||||||||||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | March 31, | March 31, | ||||||||||||||||||||||||||||||
| 2025 | 2025 | 2025 | 2025 | 2026 | 2026 | ||||||||||||||||||||||||||||||
| (Amounts in millions) | |||||||||||||||||||||||||||||||||||
| Operating loss | $ | (142.3) | $ | (26.9) | $ | (34.8) | $ | (4.7) | $ | (152.8) | $ | (219.2) | |||||||||||||||||||||||
| Depreciation and amortization | 48.1 | 48.7 | 47.9 | 47.3 | 68.5 | 212.4 | |||||||||||||||||||||||||||||
Restructuring and other(1) | 183.4 | 6.4 | 5.0 | 9.4 | 139.1 | 159.9 | |||||||||||||||||||||||||||||
Adjusted share-based compensation expense(2) | 4.1 | 5.2 | 3.7 | 3.5 | 3.2 | 15.6 | |||||||||||||||||||||||||||||
Adjusted OIBDA(3) | $ | 93.3 | $ | 33.4 | $ | 21.8 | $ | 55.5 | $ | 58.0 | $ | 168.7 | |||||||||||||||||||||||
| Starz Networks (U.S. and Canada) | $ | 92.0 | $ | 33.4 | $ | 21.8 | $ | 55.5 | $ | 58.0 | $ | 168.7 | |||||||||||||||||||||||
| International | 1.3 | — | — | — | — | — | |||||||||||||||||||||||||||||
| Adjusted OIBDA | $ | 93.3 | $ | 33.4 | $ | 21.8 | $ | 55.5 | $ | 58.0 | $ | 168.7 | |||||||||||||||||||||||
_______________
(1)Restructuring and other includes restructuring costs, certain transaction-related and other expenses, and unusual items, when applicable, as shown in the table below:
| Three Months Ended | Trailing Twelve Months | ||||||||||||||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | March 31, | March 31, | ||||||||||||||||||||||||||||||
| 2025 | 2025 | 2025 | 2025 | 2026 | 2026 | ||||||||||||||||||||||||||||||
| (Amounts in millions) | |||||||||||||||||||||||||||||||||||
| Restructuring and other: | |||||||||||||||||||||||||||||||||||
Content impairments(a) | $ | 167.7 | $ | (0.3) | $ | — | $ | 7.1 | $ | 128.1 | $ | 134.9 | |||||||||||||||||||||||
Transaction and other costs(b) | 14.0 | 4.5 | 4.8 | 2.1 | 5.1 | 16.5 | |||||||||||||||||||||||||||||
Severance(c) | 1.5 | — | — | 0.2 | 5.9 | 6.1 | |||||||||||||||||||||||||||||
Share-based compensation(d) | 0.2 | 2.2 | 0.2 | — | — | 2.4 | |||||||||||||||||||||||||||||
| Total restructuring and other | $ | 183.4 | $ | 6.4 | $ | 5.0 | $ | 9.4 | $ | 139.1 | $ | 159.9 | |||||||||||||||||||||||
_______________
(a)During 2025 and 2026, Starz undertook actions to rationalize its content portfolio as part of its ongoing efforts to right‑size its content cost structure in response to the evolving macroeconomic and industry environment, including continued declines in traditional linear services, impairments associated with changes in the Canadian operating model and in connection with becoming and operating as a standalone company following the Separation. These actions included evaluating programming on the Starz Platform, cancelling certain previously ordered programming, and removing and abandoning content determined to have limited strategic value.
In April 2026, the Company entered into an agreement to terminate certain live‑action films under a post pay-one output licensing agreement. Such termination will impact Restructuring and Other costs in the three months ended June 30, 2026.
(b)Transaction and other costs reflect costs associated with certain potential strategic transactions, costs associated with certain legal matters, and transaction, integration and legal costs associated with the separation from Lionsgate.
STARZ ENTERTAINMENT CORP.
(c)Severance costs represent a reduction in our work force due to cost-saving initiatives and the continued decline in traditional linear services.
(d)This balance includes a modification of equity awards in connection with the separation from Lionsgate. In June 2025, the compensation committee of the Company approved a cash payment in lieu of share issuance for the restricted share units that vested in July and August 2025.
(2)The following table reconciles total share-based compensation expense to adjusted share-based compensation expense:
| Three Months Ended | Trailing Twelve Months | ||||||||||||||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | March 31, | March 31, | ||||||||||||||||||||||||||||||
| 2025 | 2025 | 2025 | 2025 | 2026 | 2026 | ||||||||||||||||||||||||||||||
| (Amounts in millions) | |||||||||||||||||||||||||||||||||||
| Total share-based compensation expense | $ | 4.3 | $ | 7.4 | $ | 3.9 | $ | 3.5 | $ | 3.2 | $ | 18.0 | |||||||||||||||||||||||
Less: Amount included in restructuring and other(a) | (0.2) | (2.2) | (0.2) | — | — | (2.4) | |||||||||||||||||||||||||||||
| Adjusted share-based compensation expense | $ | 4.1 | $ | 5.2 | $ | 3.7 | $ | 3.5 | $ | 3.2 | $ | 15.6 | |||||||||||||||||||||||
_______________
(a)Includes a modification of equity awards in connection with the Separation included in restructuring and other expenses. Refer to note (1)(d).
(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.
KEY PERFORMANCE INDICATORS (KPIs)
| Three Months Ended | |||||||||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | March 31, | |||||||||||||||||||||||||
| 2025 | 2025 | 2025 | 2025 | 2026 | |||||||||||||||||||||||||
| (Amounts in millions) | |||||||||||||||||||||||||||||
| Equity free cash flow | |||||||||||||||||||||||||||||
| Net cash (used in) provided by operating activities | $ | (63.5) | $ | 65.4 | $ | (26.0) | $ | (21.4) | $ | 73.2 | |||||||||||||||||||
| Less: capital expenditures | (3.9) | (6.9) | (5.2) | (4.5) | (4.5) | ||||||||||||||||||||||||
| Total equity free cash flow | (67.4) | 58.5 | (31.2) | (25.9) | 68.7 | ||||||||||||||||||||||||
| Plus: cash paid for interest | 0.9 | 26.9 | 9.2 | 19.1 | 11.6 | ||||||||||||||||||||||||
| Plus: cash paid for income taxes | 0.3 | 0.2 | 0.4 | 0.2 | 0.4 | ||||||||||||||||||||||||
| Total unlevered free cash flow | $ | (66.2) | $ | 85.6 | $ | (21.6) | $ | (6.6) | $ | 80.7 | |||||||||||||||||||
| Cash paid for programming content | |||||||||||||||||||||||||||||
| Starz Networks | $ | (238.6) | $ | (143.5) | $ | (157.0) | $ | (158.6) | $ | (111.0) | |||||||||||||||||||
| International | (1.8) | — | — | — | — | ||||||||||||||||||||||||
Remaining shutdown operations(1) | (5.6) | (4.8) | (2.7) | (4.0) | (2.3) | ||||||||||||||||||||||||
| Total cash paid for programming content | $ | (246.0) | $ | (148.3) | $ | (159.7) | $ | (162.6) | $ | (113.3) | |||||||||||||||||||
| Net corporate debt | |||||||||||||||||||||||||||||
| Debt | $ | 715.0 | $ | 625.1 | $ | 625.1 | $ | 625.1 | $ | 625.1 | |||||||||||||||||||
| Less: cash and cash equivalents | 17.8 | 51.6 | 37.0 | 35.7 | 102.1 | ||||||||||||||||||||||||
Less: Intercompany receivable from Lionsgate(2) | 81.6 | — | — | — | — | ||||||||||||||||||||||||
| Net corporate debt | $ | 615.6 | $ | 573.5 | $ | 588.1 | $ | 589.4 | $ | 523.0 | |||||||||||||||||||
| Adjusted OIBDA - trailing twelve months | $ | 201.5 | $ | 178.6 | $ | 173.2 | $ | 204.0 | $ | 168.7 | |||||||||||||||||||
Adjusted OIBDA leverage ratio(3) | 3.1x | 3.2x | 3.4x | 2.9x | 3.1x | ||||||||||||||||||||||||
_______________
(1)Represents cash used in operating activities for programming content paid subsequent to the final shut down of the LIONSGATE+ business in May 2024, which is included in continuing operations within the consolidated statements of cash flow.
(2)In connection with the Studio Separation, on May 13, 2024, LGAC International LLC, a Delaware limited liability company and wholly owned subsidiary of Lionsgate Studios (“LGAC International”), and LGCH1 (which was renamed Starz Capital Holdings 1, Inc. at Separation), entered into a revolving credit agreement (the “Intercompany Revolver”), pursuant to which LGAC International and LGCH1 agreed to make revolving loans to each other from time to time provided that the net amount owing by one party to the other at any particular time may not exceed $150.0 million. All outstanding obligations in respect of principal, interest and fees under the Intercompany Revolver were repaid in full and all commitments thereunder were terminated.
(3)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.
STARZ ENTERTAINMENT CORP.
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.
FAQ
How did Starz Entertainment Corp. (STRZ) perform financially in Q1 2026?
Starz reported Q1 2026 revenue of $306.9 million and an operating loss of $(152.8) million. Net loss from continuing operations was $(164.9) million, or $(9.83) per share, compared with a net loss of $(154.0) million a year earlier.
Did Starz Entertainment Corp. generate positive cash flow in Q1 2026?
Yes. Starz generated $73.2 million of net cash from operating activities in Q1 2026, compared with an outflow in the prior-year quarter. Unlevered free cash flow was $80.7 million and equity free cash flow was $68.7 million for the period.
What were Starz Entertainment Corp.’s key balance sheet metrics as of March 31, 2026?
As of March 31, 2026, Starz held $102.1 million in cash and cash equivalents and total debt of $625.1 million. Net debt was $523.0 million, and the company’s trailing twelve‑month Adjusted OIBDA leverage ratio was 3.1x.
How did Starz’s Adjusted OIBDA trend in Q1 2026?
Adjusted OIBDA increased sequentially to $58.0 million in Q1 2026. On a trailing twelve‑month basis, Adjusted OIBDA totaled $168.7 million. Management also accelerated its outlook for achieving a 20% Adjusted OIBDA margin to the second half of 2027.
What 2026 outlook did Starz Entertainment Corp. reiterate in this update?
Starz reiterated expectations for positive year-over-year OTT revenue growth, low-single-digit Adjusted OIBDA growth, unlevered free cash flow of $80.0–$120.0 million, and an Adjusted OIBDA leverage ratio of approximately 2.7x exiting 2026.
How is Starz Entertainment Corp. managing content and restructuring costs?
Starz recorded $139.1 million of restructuring and other costs in Q1 2026, including $128.1 million of content impairments. These reflect efforts to rationalize its content portfolio, adjust to declines in traditional linear services, and operate as a standalone company after the separation.