Starz Entertainment Corp. — Second Quarter 2026 Earnings Summary

Financial Performance

• Reported total revenue of $307.9 million for the quarter ended June 30, 2026, compared to $319.7 million in the same period in 2025.
• OTT revenue was $221.3 million for the quarter, showing year-over-year growth compared to $221.1 million in Q2 2025.
• Linear and other revenue was $86.6 million for the quarter, down from $98.6 million in Q2 2025.
• Reported an operating loss of $(175.5) million for the quarter, primarily driven by a non-recurring restructuring charge of $151.2 million.
• Adjusted OIBDA was $59.9 million for the quarter, compared to $33.4 million in Q2 2025.
• Net cash used in operating activities was $(28.2) million for the quarter.
• Unlevered Free Cash Flow was $(14.7) million for the quarter.
• Equity Free Cash Flow was $(33.4) million for the quarter.
• Total debt was $625.1 million as of June 30, 2026, including a $300.0 million Term Loan A credit facility and $325.1 million in senior unsecured notes.
• Net debt was $565.5 million as of June 30, 2026.
• Adjusted OIBDA Leverage Ratio was 2.9x for the trailing twelve months ended June 30, 2026.
• Cash and cash equivalents were $59.6 million as of June 30, 2026.
• The $150.0 million revolving credit facility remained fully undrawn.
• For the six months ended June 30, 2026, total revenue was $614.8 million compared to $650.3 million in the prior year period.
• For the six months ended June 30, 2026, Adjusted OIBDA was $195.2 million for the trailing twelve months.

Guidance and Future Outlook

• Reiterated outlook for positive year-over-year OTT revenue growth for 2026.
• Raised 2026 Adjusted OIBDA growth outlook from low-single-digits to mid-single-digits.
• Raised 2026 Unlevered Free Cash Flow outlook from the range of $80 million to $120 million to the mid-to-upper end of that range.
• Reiterated the 2026 Adjusted OIBDA Leverage Ratio exit target of approximately 2.7x.
• Reiterated the 20% Adjusted OIBDA margin outlook for the second half of 2027.
• Management stated that 2026 is becoming a more meaningful inflection year than anticipated.

Business Segments and Product Lines

• The "Fightland" premiere was cited as validating the company's ownership strategy.
• The company reported strong audience engagement across its content portfolio.
• Programming amortization for the quarter was $114.1 million.
• Cash paid for programming content for the six months ended June 30, 2026, was $294.9 million, including $157.1 million from the licensing of program rights from the LG Studios Business.

Market and Competitive Landscape

• The company noted continued declines in traditional linear services as a factor in workforce reductions and content portfolio rationalization.
• STARZ positions itself as the leading premium entertainment destination for women and underrepresented audiences.
• The company is a bundling partner of choice and available across a wide range of digital OTT platforms and multichannel video distributors.

Risks and Challenges

• A significant non-recurring restructuring charge of $151.2 million impacted the quarter's operating results.
• Risks include the benefits of the separation from Lionsgate, unexpected costs related to the separation, and substantial capital investment requirements for content production and marketing.
• Potential risks include budget overruns, limitations imposed by credit facilities, unpredictability of programming success, and risks related to acquisitions and integration.
• Other risks include the cost of defending intellectual property, technological changes, global pandemics, economic weakness, wars, terrorism, labor disruptions, and strikes.

Management Commentary and Tone

• CEO Jeffrey Hirsch stated that second-quarter results reflect momentum across the business and the strength of the content portfolio.
• Management expressed increased confidence that 2026 is becoming a more meaningful inflection year than anticipated due to progress made and visibility into the back half of the year.
• The tone was positive regarding OTT revenue growth and the validation of the ownership strategy.

Other Key Points

• The company entered into an agreement in April 2026 to terminate certain live-action films under a post pay-one output licensing agreement, resulting in programming contract termination fees recorded within restructuring costs.
• Content impairments and contract termination fees were significant components of the "Restructuring and other" line item.
• The company is not providing 2026 outlook for GAAP financial measures other than OTT revenue growth due to the inability to reliably estimate future GAAP results given the nature of restructuring and other adjusting items.
• An analyst and investor conference call was held on August 7, 2026, to discuss the results.