Starz Entertainment Corp. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the quarter ended September 30, 2026, was $322.4 million, compared to $320.9 million in the same period in 2025.
• OTT revenue was $226.6 million for the quarter, up from $222.8 million in the prior year period.
• Linear and other revenue was $95.8 million for the quarter, down from $98.1 million in the prior year period.
• Operating loss was $(21.2) million for the quarter, an improvement from an operating loss of $(34.8) million in the prior year period.
• Adjusted OIBDA was $44.2 million for the quarter, more than doubling from $21.8 million in the prior year period.
• Net cash flows provided by operating activities were $18.9 million for the quarter.
• Unlevered Free Cash Flow was $18.8 million for the quarter.
• Equity Free Cash Flow was $13.1 million for the quarter.
• Cash and cash equivalents were $86.8 million as of September 30, 2026, compared to $35.7 million as of December 31, 2025.
• Total debt was $687.5 million as of September 30, 2026, including a $362.4 million Term Loan A credit facility and $325.1 million in senior unsecured notes.
• Net corporate debt was $600.7 million as of September 30, 2026.
• Adjusted OIBDA Leverage Ratio was 2.8x for the trailing twelve months ended September 30, 2026.
• The $183.0 million revolving credit facility remained fully undrawn.
• Deferred revenue was $59.1 million as of September 30, 2026, up from $52.8 million as of December 31, 2025.

Guidance and Future Outlook:

• The company reiterated its 2026 outlook for positive year-over-year OTT revenue growth.
• The company reiterated its 2026 Adjusted OIBDA outlook of mid-single-digit percentage growth.
• The company reiterated its 2026 Unlevered Free Cash Flow outlook of $100 million to $120 million.
• The company reiterated its 2026 Adjusted OIBDA Leverage Ratio outlook exiting 2026 to be approximately 2.7x.
• The company reiterated a 20% Adjusted OIBDA Margin Outlook for the second half of 2027.
• The company is not providing 2026 outlook for GAAP financial measures other than OTT revenue growth due to the inability to reliably estimate restructuring, other, and adjusted share-based compensation expenses.

Business Segments and Product Lines:

• The company's portfolio approach to programming is driving a more durable revenue base.
• The company is unlocking the financial upside of increased ownership.
• The company is rationalizing its content portfolio in response to the evolving macroeconomic and industry environment, including continued declines in traditional linear services.
• Actions included evaluating programming on the Starz Platform, cancelling certain previously ordered programming, and removing content with limited strategic value.
• Content recoveries during the quarter primarily related to revisions of estimated license fees for certain programming agreements.
• The company recognized programming contract termination fees related to the termination of certain live-action films under a post-pay-one output licensing agreement, which included a credit for a reduction of previously accrued termination fees based on revised assumptions.

Market and Competitive Landscape:

• The company operates in an environment with continued declines in traditional linear services.
• The company is a bundling partner of choice and available across a wide range of digital OTT platforms and multichannel video distributors.
• The company is powered by an industry-leading advanced technology, data analytics, and digital infrastructure.

Risks and Challenges:

• Risks include unexpected costs related to the separation from Lionsgate, substantial capital investment required for content production and marketing, and budget overruns.
• Risks include limitations imposed by credit facilities and notes, unpredictability of the commercial success of programming, and risks related to acquisition and integration.
• Risks include the cost of defending intellectual property, technological changes, labor disruptions, strikes, and the impact of global pandemics.
• Risks include weakness in the global economy, financial market instability, wars, terrorism, and international conflicts.

Management Commentary and Tone:

• Jeffrey Hirsch, President and CEO, stated that third-quarter results reflect the continued strength of the business and focused execution against four key financial priorities.
• Management expressed confidence in the outlook and the ability to continue delivering against the plan and create long-term value for shareholders.
• Management highlighted that the portfolio approach to programming is driving a more durable revenue base.

Other Key Points:

• The company held an analyst and investor conference call on October 29, 2026, to discuss the results.
• The company recognized a reduction in previously accrued termination fees during the quarter due to updated assumptions regarding theatrical performance for underlying films.
• The company recognized content recoveries during the quarter related to revisions of estimated license fees.
• The company's $183.0 million revolving credit facility remained fully undrawn as of September 30, 2026.
• The company reported a net loss of $(34.8) million for the quarter and $(389.1) million for the nine months ended September 30, 2026.
• Basic and diluted net loss per common share was $(2.02) for the quarter and $(22.98) for the nine months ended September 30, 2026.
• Weighted average number of common shares outstanding was 17.2 million for the quarter and 16.9 million for the nine months ended September 30, 2026.