Starz Entertainment Corp(US:STRZ)2025-11-13 21:05Company 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].