Key Takeaways NFLX posted about 17% Q3 revenue growth to roughly $11.5B while STRZ's loss widened to $52.6M.NFLX's ad tier hit 190M monthly viewers and is expected to see ad revenue more than double in 2025.STRZ faces high leverage and modest revenue growth of $321M amid its post-spinoff challenges.The streaming entertainment industry continues to evolve rapidly, with both established giants and smaller specialized players competing for viewer attention and subscription dollars. Netflix (NFLX) , the global ...

Core Viewpoint - Starz aims to position itself strategically in the M&A landscape by acquiring linear networks that are undervalued by larger owners, leveraging its technology and expertise to transition these brands into the digital space [1][4]. Financial Performance - Starz reported a revenue of $320.9 million for the quarter ending September, down from $346.9 million year-over-year, aligning with Wall Street forecasts [5]. - Net losses increased to $52.6 million from $30.6 million, while adjusted EBITDA was $21 million, lower than expected, but the company reaffirmed its annual guidance of $200 million [6]. Subscriber Metrics - The company ended the quarter with 12.3 million U.S. OTT subscribers, a sequential increase of 110,000, while total U.S. subscribers decreased by 130,000 to 17.5 million [7]. - Total North American subscribers reached 19.2 million, with a sequential increase of 120,000, driven by a 250,000 increase in Canadian subscribers following the resolution of a carriage dispute [8]. Content Strategy - Starz is focusing on developing a steady pipeline of shows with longer seasons of 18-22 episodes to enhance viewer engagement and reduce churn [7]. - The company is working towards owning half of its content slate and has initiated several writers' rooms post-separation from Lionsgate, with its first original series "Fightland" currently in production [8]. Structural Changes - A new content licensing agreement has been established with Bell Canada, transitioning from a joint venture model to a more stable structure, allowing Starz to generate international licensing revenue while Bell manages operations [10][11].

Financial Data and Key Metrics Changes - Starz reported total revenue of $321 million for the quarter, an increase of $1.2 million sequentially [12] - Adjusted OIBDA was $22 million, down $11 million sequentially due to higher advertising and marketing costs [13] - The company ended the quarter with total net debt of $588 million, with leverage on a trailing 12-month basis at 3.4 times [14] Business Line Data and Key Metrics Changes - U.S. OTT subscribers increased by 110,000, ending the quarter with 12.3 million [11] - North American total subscribers reached 19.2 million, with a sequential increase of 120,000 [12] - OTT revenue rose by $1.7 million to $223 million, while linear and other revenue slightly decreased to $98 million [13] Market Data and Key Metrics Changes - U.S. OTT subscriber growth was driven by the successful debut of "Outlander: Blood of My Blood" and the premiere of "Ballerina" [11][8] - OTT engagement reached a 12-month high, indicating strong performance in content [8] Company Strategy and Development Direction - The company aims to grow its core business by increasing margins to 20% by the end of 2028 and converting 70% of adjusted OIBDA to unleveraged free cash flow [3] - A structural change in the Canadian operation was announced, moving to a content licensing agreement with Bell Canada to generate international licensing revenue [4] - Starz is focused on owning half of its content slate by 2027, which is expected to improve margins and reduce costs [5][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver on their plan despite significant headwinds in the media industry [10] - The company anticipates continued revenue and U.S. OTT subscriber growth in the fourth quarter, aiming for approximately $200 million of adjusted OIBDA for the year [11][8] - Management highlighted the potential for increased consolidation in the media landscape, positioning Starz to capitalize on M&A opportunities [6] Other Important Information - The company plans to decrease content investment year over year, which is expected to improve free cash flow in 2026 [9] - The partnership with Bell Canada and the co-commission on "Fightland" are expected to be modestly accretive to adjusted OIBDA and free cash flow in 2026 [6] Q&A Session Summary Question: Can you explain the cost savings and international revenue from producing your own shows? - Management indicated that owning IP allows for cost control and the potential for incremental revenue through international licensing [17][19] Question: Any updates on other shows announced alongside "Fightland"? - Management confirmed progress on several shows, with plans to have half the slate owned by Starz by 2027 [20][21] Question: Can you walk us through the EBITDA guidance for Q4? - Management expressed confidence in reaching the $200 million EBITDA target, needing approximately $52 million in Q4 [24][25] Question: What are the dynamics around churn and gross acquisitions? - Management noted that two-thirds of subscriber growth was from gross acquisitions, with churn at all-time lows [49] Question: Can you provide insights on the Canadian business model shift? - Management confirmed that the new licensing model is expected to provide stable revenue exceeding previous subscription revenues [52] Question: Is the $700 million cash spend outlook for 2026 still accurate? - Management affirmed that the expectation is to be just under $700 million in 2026, with further reductions anticipated in subsequent years [54]

Company Separation and Structure - Starz Entertainment Corp. completed the separation from Old Lionsgate on May 6, 2025, resulting in two publicly traded companies: Starz Entertainment Corp. and Lionsgate Studios Corp.[162] - The Starz Business primarily consists of Starz Networks, which distributes premium subscription video services in the U.S. and Canada, and international OTT distribution outside these regions[161]. Financial Performance - Total revenue for the three months ended September 30, 2025, was $320.9 million, a decrease of $26.0 million or 7.5% compared to $346.9 million in the same period of 2024[206]. - OTT revenue decreased by $9.4 million (4.0%) to $222.8 million, while linear and other revenue fell by $16.6 million (14.5%) to $98.1 million[206]. - Total revenue for the six months ended September 30, 2025, decreased by $53.9 million (7.8%) to $640.6 million, down from $694.5 million in 2024[238]. - OTT revenue declined by $22.7 million (4.9%) to $443.9 million for the six months ended September 30, 2025, compared to $466.6 million in 2024[238]. Subscriber Metrics - The number of total subscribers in the United States decreased to 17.46 million from 17.83 million, with OTT subscribers increasing to 12.29 million but linear subscribers declining to 5.17 million[209]. - The number of total Starz subscribers decreased to 19.20 million from 23.20 million, with OTT subscribers dropping to 12.97 million from 15.45 million[209]. Expenses and Losses - Operating loss for the three months ended September 30, 2025, was $34.8 million, an increase in loss of $17.8 million (104.7%) from $17.0 million in 2024[206]. - Net loss from continuing operations was $52.6 million, an increase of $22.0 million (71.9%) compared to $30.6 million in the same period of 2024[206]. - General and administrative expenses increased by $2.5 million (9.5%) to $28.8 million compared to $26.3 million in the prior year[206]. - General and administrative expenses rose by $3.0 million (13.2%) to $25.8 million for the three months ended September 30, 2025, from $22.8 million in 2024[220]. - Interest expense increased by $3.5 million (28.5%) to $15.8 million compared to $12.3 million in the prior year[206]. - Advertising and marketing expenses increased by $3.2 million (4.3%) to $78.4 million for the three months ended September 30, 2025, compared to $75.2 million in the same period of 2024[216]. - Net loss from continuing operations for the six months ended September 30, 2025, was $95.1 million, compared to a loss of $29.5 million in 2024[253]. Debt and Financial Obligations - Total aggregate debt outstanding, including $300.0 million outstanding per Term Loan A, was $625.1 million following the Exchange Transaction[179]. - As of September 30, 2025, the company had $300.0 million outstanding under its new Term Loan A and $325.1 million under 5.5% Senior Notes due 2029[259]. - Total future repayment of debt and other commitments under contractual obligations is $1,629.7 million, with $591.4 million due in the next 12 months[275]. - The company has entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk[289]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2025, were $37.0 million, an increase from $17.8 million in 2024[258]. - Net cash flows provided by operating activities for the six months ended September 30, 2025, were $39.3 million, an increase of $57.1 million compared to the same period in 2024[281]. - Cash provided by investing activities for the six months ended September 30, 2025, was $70.7 million, reflecting a net change of $160.7 million compared to 2024[282]. - Cash used in financing activities for the six months ended September 30, 2025, was $(90.8) million, a decrease of $184.2 million compared to the same period in 2024[283]. Programming and Content Costs - Programming amortization for the three months ended September 30, 2025, was $156.8 million, down $25.3 million (13.9%) from $182.1 million in 2024[206]. - Programming related obligations included $88.2 million of programming notes and $16.2 million of a production loan as of September 30, 2025[261]. - Programming amortization for the six months ended September 30, 2025, decreased by $10.7 million (3.2%) to $319.3 million from $330.0 million in 2024[238]. Strategic Initiatives - Starz continues to strategically review its content and performance as a standalone company following the separation[165]. - Management's estimates for financial statements include significant assumptions regarding customer relationships and future revenue, which could differ from actual results[187]. - The company plans to change its fiscal year end from March 31 to December 31, with the next fiscal year end set for December 31, 2025[186].

Core Insights - STARZ reported consolidated revenue of $320.9 million for the third quarter ended September 30, 2025, with a net loss of $(52.6) million, translating to a net loss per share of $(3.15) [2][4] - The company experienced U.S. OTT subscriber growth of 520,000 year-to-date and 670,000 year-over-year, reaching a total of 12.3 million U.S. OTT subscribers [4][2] - Management reiterated its previously provided 2025 outlook, indicating confidence in future performance [2] Financial Performance - Total revenue for the quarter was $320.9 million, down from $346.9 million in the same quarter last year [10] - Operating loss was $(34.8) million, compared to $(17.0) million in the prior year [10] - Adjusted OIBDA for the quarter was $21.8 million, a decrease from $33.4 million year-over-year [13] Subscriber Metrics - STARZ ended the quarter with 12.3 million U.S. OTT subscribers, a sequential increase of 110,000, while total U.S. subscribers decreased by 130,000 to 17.5 million [4][2] - Total North American subscribers, including Canada, reached 19.2 million, reflecting a sequential increase of 120,000, driven by a resolution of a carriage dispute in Canada [4][2] Debt and Cash Position - As of September 30, 2025, STARZ had $300 million outstanding on its Term Loan A credit facility and $325.1 million in senior unsecured notes, resulting in total net debt of $588.1 million [3] - The company ended the quarter with $37.0 million in cash, an increase from $17.8 million at the beginning of the period [9][3] Management Commentary - STARZ President & CEO Jeffrey Hirsch expressed optimism about the company's operational and financial performance, highlighting plans to generate new revenue through content licensing and ownership of series [2] - The management emphasized the opportunity to scale its core audience of women and underrepresented audiences with a strong slate of original content [2]

Exhibit 99.1 Starz Entertainment Corp. Reports Results for the Third Quarter Ended September 30, 2025 Third Quarter Revenue was $320.9 Million Third Quarter Operating Loss was $(34.8) Million Third Quarter Adjusted OIBDA was $21.8 Million Total Revenue, OTT Revenue, and U.S. OTT Subscriber Growth U.S. OTT Subscriber Growth of 520,000 YTD and 670,000 YoY Engagement on STARZ App Reached 12-Month High During Period Management Reiterates All Previously Provided 2025 Outlook SANTA MONICA, CA, and VANCOUVER, B.C. ...

Group 1 - STARZ will report its third quarter financial results for calendar 2025 on November 13, 2025, after market close [1] - Senior management will hold an analyst and investor call at 2:00 PM PT/5:00 PM ET to discuss the results [1] - A live audio webcast will be available, with a full replay accessible later the same evening [1] Group 2 - STARZ is a leading premium entertainment destination targeting women and underrepresented audiences [2] - The company offers a diverse programming mix, including original series and blockbuster movies, under the brand positioning "We're All Adults Here" [2] - STARZ is available across various digital OTT platforms and multichannel video distributors, and is recognized for its advanced technology and data analytics [2]

Core Insights - Starz Entertainment Corp. reported modest results for 2Q25, missing revenue and adjusted EPS estimates, with revenue of $319.7 million, down 8.0% YoY from $347.6 million in 2Q24 [2][14] - The company experienced an operating loss of $26.9 million in 2Q25, compared to an operating income of $10.1 million in the prior-year period [2][14] - Starz ended the quarter with 12.2 million U.S. OTT subscribers, a sequential decline of 120,000, and total U.S. subscribers reached 17.6 million, down 410,000 from the previous quarter [2][15] Financial Performance - Adjusted OIBDA for 2Q25 was $33.4 million, down from $56.3 million in 2Q24, leading to a decrease in adjusted OIBDA margin to 10.4% from 16.2% [2][14] - The net loss for the quarter was $42.5 million, compared to a net income of $4.2 million in 2Q24, with diluted loss per share at $2.54 versus diluted earnings per share of $0.26 in 2Q24 [2][14] Subscriber Trends - The decline in subscribers was attributed to lower OTT additions and ongoing pressure on linear subscribers, particularly due to the underperformance of BMF Season 4 [2][15] - Despite the overall decline, the Outlander prequel, Blood of My Blood, achieved strong performance, becoming the third-highest series premiere in Starz history for subscriber additions [2][10] Strategic Outlook - Starz is focusing on a digital-first growth strategy and expects sequential revenue and OTT subscriber growth in upcoming quarters, supported by a strong content lineup [2][8] - The company aims to reach $200 million in adjusted OIBDA by year-end and convert 70% of that into free cash flow by 2026 [2][8] Valuation - The intrinsic value of Starz Entertainment Corp. is estimated at $18.00 per share, based on a 2026e EV/EBITDA multiple of 4.4x, maintaining a 'Buy' rating with an implied upside of 33.3% from the current market price of $13.50 [6][16] - The valuation is sensitive to fluctuations in adjusted EBITDA and EV/EBITDA multiples, with potential changes impacting the target prices significantly [18] Company Strategy - Starz is strategically exiting seven international territories to streamline its business and is prioritizing lower-cost original content production [21] - The company is targeting key demographics and aims to achieve a 20% margin run rate by FY28 to boost profitability [11][12]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $319.7 million, down 2% sequentially and 7.4% year over year [12] - Adjusted OIBDA was $33.4 million, down from $92 million in the previous quarter, primarily due to higher content amortization [13] - The company ended the quarter with $573.5 million in total net debt, down $42.1 million sequentially, with a leverage ratio of 3.2 times [14] Business Line Data and Key Metrics Changes - The company had 12.18 million U.S. OTT subscribers, a sequential decline of 120,000, and a total of 19.08 million North American subscribers, down 520,000 sequentially [12] - OTT revenue was $221.1 million, while linear and other revenue was $98.6 million, reflecting declines due to lower OTT subscriber additions [13] Market Data and Key Metrics Changes - The linear subscriber base declined to 6.22 million, reflecting continued declines in Pay TV households [12] - The company expects sequential revenue and OTT subscriber growth in the next two quarters due to the successful premiere of "Blood of My Blood" [13] Company Strategy and Development Direction - The company aims for higher adjusted OIBDA margins, higher free cash flow, and lower leverage, with a target of reaching a 20% margin by the end of calendar 2028 [6][10] - The content slate includes high-performing returning series and new premieres, which are expected to drive subscriber growth and revenue [9][10] Management's Comments on Operating Environment and Future Outlook - Management views 2025 as a transition year for cash flow management, with a focus on deleveraging in 2026 and 2027 [14] - The company believes it is undervalued compared to peers and expects valuation disconnect to become more apparent as large media companies spin off their linear networks [6] Other Important Information - The company is excited about its content slate, including the return of "Spartacus" and the launch of "Fightland," which is expected to have a lower cost structure compared to previous productions [10][46] - The passage of the One Big Beautiful Bill Act allows the company to reduce federal tax liabilities, leading to no significant cash tax payments anticipated for the foreseeable future [14] Q&A Session Summary Question: What defines scale in this business and prerequisites for M&A? - Management has a clear plan for deleveraging and achieving a 20% margin, focusing on delivering that plan regardless of M&A participation [18] Question: What caused the underperformance of BMF and adjustments going forward? - BMF was still a large show but did not meet growth expectations due to gross adds issues; management is analyzing the situation and has new content in development [28] Question: Insights on ARPU and distribution relationships? - ARPU was slightly down due to more customers on multi-month offers, which helps reduce churn; no rate increases are planned for the next year [30][32] Question: Audience transition for "Blood of My Blood"? - The company has a strong track record of franchising, with spin-offs typically retaining over 85% of the original audience [38] Question: Confidence in the return of "Spartacus"? - There is significant demand for "Spartacus" to return, and the company has incorporated diverse characters to appeal to a broader audience [46]

Core Insights - Starz reported total revenue of $319.7 million in Q2, slightly below Wall Street expectations due to declines in subscriber levels on linear TV and streaming [1] - The company, which became independent from Lionsgate earlier this year, is projecting growth in both subscribers and revenue over the next two quarters [2] - Adjusted operating income before depreciation and amortization (OIBDA) reached $33.4 million, meeting Street forecasts [2] Subscriber Metrics - Starz has over two-thirds of its subscriber base in streaming, ending Q2 with 12.2 million streaming customers in the U.S., a decline of 120,000 from the prior quarter [3] - Total U.S. subscribers (linear and streaming combined) reached 17.6 million, down 410,000 [3] - North American subscriber count was 19.1 million, reflecting a quarter-to-quarter decline of 520,000 [3] Financial Performance - The company reported net losses of $42.5 million, equating to a loss of $2.54 per share [4] - Starz had total net debt of $573.5 million at the end of the quarter, with a leverage ratio of 3.2 times trailing 12-month adjusted OIBDA [6] Content and Future Outlook - The main new series released in Q2 was "Power Book III: Raising Kanaan," with the current quarter seeing strong performance from the "Outlander" spinoff "Blood of My Blood" [5] - Executives expect growth in both subscribers and revenue in Q3 and Q4, although no specific projections were provided [5] - CEO Jeffrey Hirsch highlighted significant progress towards financial and operational objectives since becoming a standalone public company [6] Stock Performance - Starz shares have nearly doubled since the company's May IPO, reaching a high of $21 before drifting down closer to $15 in recent trading sessions [7]