Starz Entertainment Corp. Reports Results for the Fourth Quarter Ended December 31, 2025 Grew Fourth Quarter Revenue Sequentially to $322.8 Million Fourth Quarter Operating Loss Improved to $(4.7) Million Grew Fourth Quarter Adjusted OIBDA to $55.5 Million Operating Loss on a Trailing-Twelve Month Basis was $(208.7) Million Achieved $204.0 Million in Annual Trailing-Twelve Month Adjusted OIBDA Exhibit 99.1 Management Achieved or Exceeded All Previously Provided 2025 Outlook Grew OTT and Total Subscribers Se ...

Exhibit 99.1 Starz Entertainment Corp. Reports Results for the Fourth Quarter Ended December 31, 2025 See "Use of Non-GAAP Financial Measures" for a definition of Free Cash Flow. 1 Grew Fourth Quarter Revenue Sequentially to $322.8 Million Fourth Quarter Operating Loss Improved to $(4.7) Million Grew Fourth Quarter Adjusted OIBDA to $55.5 Million Operating Loss on a Trailing-Twelve Month Basis was $(208.7) Million Achieved $204.0 Million in Annual Trailing-Twelve Month Adjusted OIBDA Management Achieved or ...

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 Holding 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 services outside these regions[161]. Financial Performance - Total revenue for the three months ended September 30, 2025, decreased by $26.0 million, or 7.5%, to $320.9 million compared to $346.9 million in the same period of 2024[205]. - OTT revenue declined by $9.4 million, or 4.0%, from $232.2 million in 2024 to $222.8 million in 2025, while linear and other revenue decreased by $16.6 million, or 14.5%[205]. - 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]. - Starz Networks Adjusted OIBDA decreased by $5.1 million to $21.8 million for the three months ended September 30, 2025, primarily due to lower revenue from fewer subscribers[236]. Subscriber Metrics - The number of total subscribers in the United States decreased from 17.83 million in September 2024 to 17.46 million in September 2025, a decline of 2.1%[209]. - Total Starz subscribers decreased from 23.20 million in September 2024 to 19.20 million in September 2025, reflecting a decline of 17.2%[209]. Expenses and Losses - Operating loss for the three months ended September 30, 2025, was $34.8 million, compared to an operating loss of $17.0 million in the same period of 2024, representing an increase in loss of 104.7%[205]. - Net loss from continuing operations increased by $22.0 million, or 72.8%, from $30.2 million in 2024 to $52.2 million in 2025[205]. - General and administrative expenses increased by $2.5 million, or 9.5%, from $26.3 million in 2024 to $28.8 million in 2025[205]. - 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 to $15.8 million for the three months ended September 30, 2025, compared to the same period in 2024[223]. - Net loss from continuing operations for the three months ended September 30, 2025, was $52.6 million, up from a net loss of $30.6 million in the same period of 2024[225]. - Net loss from continuing operations for the six months ended September 30, 2025, was $95.1 million, compared to a net loss of $29.5 million in 2024[253]. Cash Flow and Debt Management - Cash and cash equivalents as of September 30, 2025, were $37.0 million, up from $17.8 million in 2024[258]. - Cash flow from operations, cash on hand, and availability under the $150 million senior secured revolving credit facility are expected to meet operational cash and debt service requirements for the next twelve months[270]. - Total future repayment of debt and other commitments under contractual obligations is projected to be $1,629.7 million, with $591.4 million due in the next 12 months[275]. - 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]. Restructuring and Strategic Review - During the six months ended September 30, 2024, Old Lionsgate executed a restructuring plan, exiting all international territories except Canada, India, and Southeast Asia, which was completed in May 2024[167]. - Starz continues to strategically review its content and performance as a standalone company following the separation[165]. Programming and Content Expenses - Programming amortization expenses decreased by $25.3 million, or 13.9%, from $182.1 million in 2024 to $156.8 million in 2025[205]. - The company premiered fewer original series in the three months ended September 30, 2025, contributing to decreased programming amortization[210]. - For the six months ended September 30, 2025, programming amortization decreased to $319.3 million from $330.0 million in 2024, a decline of $10.7 million or 3.2%[241]. Interest Rate Management - The company has entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk, converting floating-rate borrowings to fixed-rate[289]. - The variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 8.8%[290]. - The average interest rate for Term Loan A is 7.2%[291]. - The fair value of Programming notes is $88.2 million with an average interest rate of 8.8%[291]. - The Production Loan has a fair value of $16.2 million and an average interest rate of 6.5%[291]. - The 5.5% Senior Notes have a fair value of $325.1 million, with a fixed interest rate of 5.5%[291].

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 services outside these regions[161]. - During the six months ended September 30, 2024, Old Lionsgate executed a restructuring plan, exiting all international territories except Canada, India, and Southeast Asia, which was completed in May 2024[167]. 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 in 2024[205]. - OTT revenue decreased by $9.4 million or 4.0% to $222.8 million, while linear and other revenue declined by $16.6 million or 14.5% to $98.1 million[206]. - The total number of subscribers for Starz Networks decreased to 19.20 million as of September 30, 2025, down from 23.20 million a year earlier, reflecting a loss of 4.0 million subscribers[209]. - Operating loss increased to $34.8 million for the three months ended September 30, 2025, compared to a loss of $17.0 million in the same period in 2024, representing a 104.7% increase[206]. - Net loss from continuing operations was $52.6 million for the three months ended September 30, 2025, compared to a loss of $30.6 million in 2024, marking a 71.9% increase[206]. - Total revenue for the six months ended September 30, 2025, decreased by $53.9 million (7.8%) to $640.6 million 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]. - The company reported a net loss of $95.1 million for the six months ended September 30, 2025, compared to a net loss of $26.4 million in 2024, representing an increase of $68.7 million (260.2%)[238]. Expenses and Costs - A $10.0 million annual charge for corporate general and administrative expenses was allocated to the Starz Business under a Shared Services Agreement with Old Lionsgate[183]. - Advertising and marketing expenses increased by $2.9 million or 3.8% to $78.4 million for the three months ended September 30, 2025[206]. - General and administrative expenses rose by $2.5 million or 9.5% to $28.8 million for the same period[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]. - 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]. - Depreciation and amortization expense increased by $6.7 million (16.3%) to $47.9 million for the three months ended September 30, 2025, compared to $41.2 million in 2024[221]. - General and administrative expenses increased by $6.3 million to $50.6 million, accounting for 9.0% of revenue, compared to $44.3 million or 8.0% of revenue in 2024[247]. - Share-based compensation expense totaled $11.3 million for the six months ended September 30, 2025, up from $9.6 million in 2024[248]. Debt and Financing - Starz issued $389.9 million in new 5.5% exchange notes due 2029, reducing the principal amount of the existing 5.5% Senior Notes to $325.1 million, with total aggregate debt outstanding at $625.1 million[179]. - The company entered into a new credit agreement providing for a $300.0 million senior secured term loan and a $150.0 million senior secured revolving credit facility[180]. - Interest expense increased by $3.5 million (28.4%) to $15.8 million for the three months ended September 30, 2025, compared to $12.3 million in 2024[223]. - Interest expense increased by $5.9 million to $29.0 million for the six months ended September 30, 2025, primarily due to increased programming-related obligations[251]. - The company has entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk[289]. - The variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 8.8%[290]. - As of September 30, 2025, the outstanding carrying value of Term Loan A is $300.0 million, and the 5.5% Senior Notes is $325.1 million[290]. - 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]. 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]. - Cash flow from operations, cash on hand, and availability under a $150 million undrawn revolving credit facility are expected to meet operational cash and debt service requirements for the next twelve months[270]. Content and Programming - Starz evaluated and strategically reviewed its content, cancelling certain programming in preparation for the separation[165]. - Programming amortization for the three months ended September 30, 2025, was $156.8 million, a decrease of $25.3 million or 13.9% from $182.1 million in 2024[206]. - For the six months ended September 30, 2025, programming amortization for Starz Networks was $319.3 million, a decrease of $10.7 million or 3.2% compared to $330.0 million in 2024[241]. - The estimated future cash outlay for impairment charges related to content is approximately $32.0 million through September 30, 2025[269]. - Programming related obligations included $88.2 million of programming notes and $16.2 million of production loans outstanding as of September 30, 2025[261]. Subscriber Metrics - The number of OTT subscribers in the United States increased to 12.29 million as of September 30, 2025, up from 11.62 million in 2024[209]. - Starz Networks Adjusted OIBDA decreased by $5.1 million to $21.8 million for the three months ended September 30, 2025, primarily due to lower revenue from fewer subscribers[236]. - Adjusted OIBDA for Starz Networks was $55.2 million, a decrease of $29.0 million from $84.2 million in the same period of 2024[257].

Financial Performance - STARZ reported third quarter revenue of $320.9 million, a decrease from $346.9 million in the same quarter last year[4]. - The company experienced a net loss of $(52.6) million, translating to a net loss per share of $(3.15)[4]. - Adjusted OIBDA for the quarter was $21.8 million, with a total Adjusted OIBDA leverage ratio of 3.4x[4][6]. - For the six months ended September 30, 2025, the net loss from continuing operations was $95.1 million, compared to a net loss of $29.5 million for the same period in 2024[13]. - The company reported adjusted OIBDA of $83.5 million for the six months ended September 30, 2025, an increase from $24.7 million in the same period of 2024[15]. - The restructuring and other costs for the six months ended September 30, 2025, totaled $11.4 million, compared to a recovery of $1.7 million in the same period of 2024[18]. Subscriber Metrics - U.S. OTT subscriber growth reached 520,000 year-to-date and 670,000 year-over-year, totaling 12.3 million U.S. OTT subscribers[4]. - Total North American subscribers increased by 120,000 to 19.2 million, with Canadian subscribers rising by 250,000 due to the resolution of a carriage dispute[4]. - Total subscribers in the United States decreased to 17.46 million as of September 30, 2025, down from 18.00 million as of March 31, 2025, reflecting a decline of approximately 3%[22]. - The company reported a total of 12.29 million OTT subscribers in the United States as of September 30, 2025, a slight decrease from 12.30 million as of March 31, 2025[22]. Cash and Debt Management - STARZ ended the quarter with $300 million outstanding on its Term Loan A credit facility and total net debt of $588.1 million[4]. - STARZ's cash and cash equivalents increased to $37.0 million from $17.8 million in the previous quarter[10]. - The company had cash and cash equivalents of $37.0 million at the end of the period, an increase from $17.8 million at the beginning of the period[13]. - The company experienced a net cash provided by operating activities of $39.3 million for continuing operations, a significant improvement from a net cash used of $17.8 million in the prior year[13]. Capital Expenditures and Programming Costs - Capital expenditures for the six months ended September 30, 2025, were $12.1 million, compared to $9.6 million for the same period in 2024[13]. - Programming amortization for the six months ended September 30, 2025, was $319.3 million, slightly down from $331.1 million in the same period of 2024[13]. - The adjusted share-based compensation expense for the six months ended September 30, 2025, was $8.9 million, compared to $9.3 million in the same period of 2024[20]. Strategic Outlook - The company plans to generate new revenue through content licensing and improve ownership of series on the network[3]. - STARZ's programming mix includes a strong slate of originals aimed at women and underrepresented audiences, enhancing its market position[3][7]. - The company maintains its previously provided 2025 outlook, indicating confidence in future performance[1][3].

Financial Performance - STARZ reported third quarter revenue of $320.9 million, a decrease from $346.9 million in the same quarter last year[4]. - The company experienced a net loss of $(52.6) million, translating to a net loss per share of $(3.15)[4]. - Adjusted OIBDA for the quarter was $21.8 million, with a total Adjusted OIBDA leverage ratio of 3.4x[4][6]. - For the six months ended September 30, 2025, the net loss from continuing operations was $95.1 million, compared to a net loss of $29.5 million for the same period in 2024[13]. - The company reported adjusted OIBDA of $83.5 million for the six months ended September 30, 2025, an increase from $24.7 million in the same period of 2024[15]. - The adjusted share-based compensation expense for the six months ended September 30, 2025, was $8.9 million, compared to $9.3 million in the same period of 2024[20]. Subscriber Metrics - U.S. OTT subscriber growth reached 520,000 year-to-date and 670,000 year-over-year, totaling 12.3 million U.S. OTT subscribers[4]. - Total North American subscribers increased by 120,000 to 19.2 million, with Canadian subscribers rising by 250,000 due to the resolution of a carriage dispute[4]. - Total subscribers in the United States decreased to 17.46 million as of September 30, 2025, down from 18.00 million as of March 31, 2025, reflecting a decline of 3%[22]. - The company had a total of 12.29 million OTT subscribers in the United States as of September 30, 2025, a slight decrease from 12.30 million as of March 31, 2025[22]. - The company reported a total of 19.20 million subscribers across Starz Networks as of September 30, 2025, down from 19.60 million as of March 31, 2025[22]. Cash Flow and Debt - STARZ ended the quarter with $300 million outstanding on its Term Loan A credit facility and total net debt of $588.1 million[4]. - STARZ's cash and cash equivalents increased to $37.0 million from $17.8 million in the previous quarter[10]. - The company experienced a cash inflow of $39.3 million from operating activities for the six months ended September 30, 2025, compared to an outflow of $24.4 million in the same period of 2024[13]. - The net cash used in financing activities for the six months ended September 30, 2025, was $90.8 million, compared to a cash inflow of $96.2 million in the same period of 2024[13]. - The company’s cash and cash equivalents at the end of the period were $37.0 million, an increase from $18.8 million at the end of the previous period[13]. Strategic Initiatives - The company plans to generate new revenue through content licensing and improve ownership of series on the network[3]. - STARZ's programming mix includes a strong slate of originals aimed at women and underrepresented audiences, enhancing its market position[3][7]. - The company maintains its previously provided 2025 outlook, indicating confidence in future performance[1]. Capital Expenditures - Capital expenditures for the six months ended September 30, 2025, were $12.1 million, compared to $9.6 million in the same period of 2024[13].

Core Insights - GAMCO Investors, led by Mario Gabelli, has made significant reductions in its equity portfolio, indicating a selective trimming of positions where valuations have increased or catalysts have played out [1] - The firm executed several full exits this quarter, reflecting a continued streamlining of the portfolio and reallocating capital towards higher-conviction opportunities [2] Reductions by Percentage Change - 3D Systems Corp (DDD) saw a reduction of 82.14%, with GAMCO selling 46,000 shares, leaving only 10,000, indicating concerns about the 3D printing sector's adoption and profitability [5] - Blue Owl Capital Inc (OWL) was reduced by 80.12%, with 222,080 shares trimmed, suggesting a reassessment of alternative asset managers amid changing market conditions [5] - Diamondback Energy Inc (FANG) experienced a 74.74% reduction, with 7,549 shares sold, likely reflecting profit-taking after strong sector performance [5] - Illinois Tool Works (ITW) was reduced by 58.99%, with 7,020 shares trimmed, possibly indicating concerns about valuation or cyclical demand [5] - AllianceBernstein Holding LP (AB) saw a reduction of 53.89%, with 38,800 shares sold, reflecting tactical portfolio management amid earnings pressures [5] Full Exits - Notable full exits included Sandy Spring Bancorp ($6.15M), Intra-Cellular Therapies ($5.0M), and Lions Gate Entertainment ($3.6M), indicating a disciplined approach to realizing gains [2] - Other significant exits included Patterson Companies, Beacon Roofing Supply, and Barrick Gold, highlighting a diverse range of sectors from which GAMCO has divested [2]

Restructuring and Impairment Charges - Starz Entertainment Corp. incurred impairment charges totaling $456.7 million from the inception of its restructuring plan through June 30, 2025[171]. - The company executed a restructuring plan to shut down its international LIONSGATE+ business, exiting all international territories except Canada, India, and Southeast Asia, completed in May 2024[172]. - The company may incur additional content impairment charges in the future as it continues to evaluate its restructuring plan[171]. - The restructuring initiatives included the cancellation of certain ordered programming and the removal of programming with limited strategic purpose[169]. - The company expects to incur additional content impairment charges as part of ongoing business activities, with an estimated future cash outlay of approximately $45.0 million for impairment charges recorded through June 30, 2025[263]. Financial Performance - Total revenue for the quarter ended June 30, 2025, was $319.7 million, a decrease of $27.9 million or 8.0% compared to $347.6 million in the same quarter of 2024[214]. - OTT revenue decreased by $13.3 million (5.7%) to $221.1 million, while linear and other revenue fell by $14.6 million (12.9%) to $98.6 million[214]. - The total number of domestic subscribers decreased from 18.93 million in June 2024 to 17.59 million in June 2025, reflecting a decline in both OTT and linear subscribers[217]. - Operating loss for the quarter was $26.9 million, a decrease of $37.0 million compared to an operating income of $10.1 million in the prior year[214]. - Net loss from continuing operations was $42.5 million for the quarter, a significant decline from a net income of $1.1 million in the same quarter of 2024[214]. - The number of total Starz subscribers decreased from 23.90 million in June 2024 to 19.08 million in June 2025, with OTT subscribers dropping from 15.80 million to 12.86 million[217]. - Adjusted OIBDA for Starz Networks decreased by $23.9 million to $33.4 million for the quarter ended June 30, 2025, down from $57.3 million in the same quarter of 2024[245]. Expenses and Cash Flow - Advertising and marketing expenses decreased by $19.3 million (23.3%) to $63.4 million, reflecting a reduction in promotional activities[214]. - Starz Networks' general and administrative expenses increased by $2.5 million to $29.1 million for the quarter ended June 30, 2025, compared to $26.6 million in the same quarter of 2024, representing a 9.4% increase[226][229]. - Interest expense increased by $2.4 million (22.2%) to $13.2 million compared to the previous year[214]. - Cash and cash equivalents increased to $51.6 million as of June 30, 2025, compared to $17.8 million as of June 30, 2024[246]. - The company reported a net cash flow from operating activities of $65.4 million for the quarter ended June 30, 2025, an increase of $92.2 million compared to a net cash flow of $(26.8) million for the same quarter in 2024[274]. - Cash provided by investing activities for the quarter ended June 30, 2025, was $75.2 million, primarily due to cash provided from the LG Studios Business through the New Lionsgate revolving credit facility[275]. Debt and Financial Obligations - Starz Entertainment Corp. has a $300.0 million senior secured term loan credit facility and a $150.0 million senior secured revolving credit facility under the new Starz Credit Agreement[185]. - Total future repayment of debt and other commitments under contractual obligations is estimated at $1.82 billion, with $814.5 million due in the next 12 months[270]. - The company anticipates cash flow from operations, cash on hand, and borrowings under its $150 million revolving credit facility will be sufficient to meet operational cash and debt service requirements for the next twelve months[264]. - The company has significant cash requirements related to corporate debt and programming obligations, with programming related obligations commitments totaling $419.2 million[268]. - The company utilized $291.8 million in borrowings from Term Loan A during the quarter ended June 30, 2025, net of deferred financing costs[278]. Shareholder and Corporate Actions - Following the Separation, Starz Entertainment Corp. issued $389.9 million in new 5.5% exchange notes due 2029, reducing the principal amount of the existing 5.5% Senior Notes to $325.1 million[184]. - Starz Entertainment Corp. shareholders received 1.12 shares of both New Lionsgate and Starz Entertainment Corp. common shares for each Class A common share held prior to the Separation[167]. - The change in fiscal year end from March 31 to December 31 was approved by the Board of Directors, with the next fiscal year end set for December 31, 2025[191]. Interest Rate and Currency Management - The Company entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk, converting floating-rate borrowings to fixed-rate borrowings[286]. - The variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 8.8%[287]. - The average interest rate for Term Loan A is 7.3%[288]. - The average interest rate for programming notes is 8.8%[288]. - The Company has entered into forward foreign exchange contracts to hedge foreign currency exposures on future programming production costs denominated in British Pounds[284]. - Interest rate swap contracts were entered into to mitigate the impact of interest rate changes on earnings and cash flows[285]. - Certain borrowings are at variable rates, exposing the Company to interest rate risk, which could decrease net income if rates increase[286].

Restructuring and Impairment - Starz Entertainment Corp. incurred impairment charges totaling $456.7 million from the inception of its restructuring plan through June 30, 2025[171]. - The company executed a restructuring plan to shut down its international LIONSGATE+ business, exiting all international territories except Canada, India, and Southeast Asia, completed in May 2024[172]. - The restructuring initiatives included the removal of certain programming from the Starz Platform, with further evaluations planned for future content[169]. - The company anticipates a net future cash outlay of approximately $45.0 million for impairment charges related to content commitments in exited territories[263]. Financial Performance - Total revenue for the quarter ended June 30, 2025, was $319.7 million, a decrease of $27.9 million or 8.0% compared to $347.6 million in the same quarter of 2024[214]. - OTT revenue decreased by $13.3 million (5.7%) to $221.1 million, while linear and other revenue declined by $14.6 million (12.9%) to $98.6 million[214]. - The total number of domestic subscribers decreased to 17.59 million from 18.93 million, with OTT subscribers at 12.18 million and linear subscribers at 5.41 million[217]. - Operating loss for the quarter was $26.9 million, a decline of $37.0 million compared to an operating income of $10.1 million in the prior year[214]. - Net loss from continuing operations was $42.5 million, a significant increase from a net income of $1.1 million in the same quarter of 2024[214]. - Starz Networks reported an Adjusted OIBDA of $33.4 million for the quarter ended June 30, 2025, down $23.9 million from $57.3 million in the same quarter of 2024[245]. Expenses and Costs - The Starz Business incurred a $10.0 million annual charge for corporate general and administrative expenses from Old Lionsgate under the Shared Services Agreement[189]. - General and administrative expenses increased by $2.5 million (9.4%) to $29.1 million, reflecting the costs associated with operating as an independent public company[214]. - Advertising and marketing expenses decreased by $19.3 million (23.3%) to $63.4 million, influenced by fewer new series launches during the period[214]. - Depreciation and amortization expense increased by $7.1 million to $48.7 million for the quarter ended June 30, 2025, up from $41.6 million in the same quarter of 2024[230]. - Interest expense rose by $2.4 million (22.2%) to $13.2 million, contributing to the overall financial challenges faced during the quarter[214]. Debt and Financing - Following the Separation, Starz Entertainment Corp. issued $389.9 million aggregate principal amount of new 5.5% exchange notes due 2029, reducing the outstanding principal amount of the 5.5% Senior Notes to $325.1 million[184]. - The company’s total aggregate debt outstanding, including $300.0 million outstanding per Term Loan A, was $625.1 million post-Separation[184]. - The company had $300.0 million of 5.5% senior notes outstanding as of June 30, 2025, down from $325.1 million in the same period of 2024[249]. - Total future repayment of debt and other commitments under contractual obligations is estimated at $1,820.7 million, with $814.5 million due in the next 12 months[270]. - The company’s programming related obligations commitments total $419.2 million, with $260.1 million expected to be repaid in the next 12 months[270]. Cash Flow and Liquidity - Cash and cash equivalents increased to $51.6 million as of June 30, 2025, compared to $17.8 million as of June 30, 2024[246]. - The company reported a net cash flow from operating activities of $65.4 million for the quarter ended June 30, 2025, compared to a cash outflow of $26.8 million for the same quarter in 2024, resulting in a net change of $92.2 million[274]. - The company had a significant increase in cash provided by investing activities, totaling $75.2 million for the quarter ended June 30, 2025, compared to a cash outflow of $71.6 million for the same quarter in 2024[275]. - Cash flow from operations, cash on hand, and borrowings under a $150 million senior secured revolving credit facility are expected to meet operational cash and debt service requirements for the next twelve months[264]. Interest Rate and Currency Management - The Company entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk[286]. - The variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 8.8%[287]. - The average interest rate for Term Loan A is 7.3%[288]. - The average interest rate for programming notes is 8.8%[288]. - The Company has entered into forward foreign exchange contracts to hedge foreign currency exposures on future programming production costs[284]. - Interest rate swap contracts were entered into to mitigate the impact of interest rate changes on earnings and cash flows[285]. - Certain borrowings are at variable rates, exposing the Company to interest rate risk, which could decrease net income if rates increase[286]. Corporate Changes - Starz Entertainment Corp. will change its fiscal year end from March 31 to December 31, with the next fiscal year end on December 31, 2025[191]. - The company’s financial statements prior to the Separation were prepared on a carve-out basis, reflecting the combined historical financial position of the Starz Business[174]. - Starz Entertainment Corp. is considered the accounting spinnee or divested entity following the Separation from Old Lionsgate[168].

Financial Performance - STARZ reported consolidated revenue of $319.7 million for the quarter ended June 30, 2025, a decrease from $347.6 million in the same quarter of the previous year, representing a decline of approximately 8.5%[4] - The net loss for the quarter was $(42.5) million, translating to a net loss per share of $(2.54), compared to a net income of $4.2 million in the prior year[4][12] - Adjusted OIBDA for the quarter was $33.4 million, with a total Adjusted OIBDA Leverage Ratio of 3.2x based on a trailing twelve-month total of $178.6 million[5][7] - Adjusted OIBDA for the three months ended June 30, 2025, was $33.4 million, a decrease from $93.3 million in the previous quarter[14] - Operating income for the three months ended June 30, 2024, was $10.1 million, while the operating loss for the three months ended March 31, 2025, was $142.3 million[14] Subscriber Metrics - STARZ ended the quarter with 12.2 million U.S. Over-The-Top (OTT) subscribers, reflecting a sequential decline of 120,000 subscribers, and total U.S. subscribers decreased by 410,000 to 17.6 million[5] - The company experienced a decline in Canadian subscribers by 110,000 during the quarter, contributing to a total North American subscriber decline of 520,000[5] - Total domestic subscribers as of June 30, 2025, were 17.59 million, down from 18.00 million as of March 31, 2025, indicating a decline of approximately 2.3%[22] - OTT subscribers in the U.S. as of June 30, 2025, were 12.18 million, a decrease from 12.30 million in the previous quarter[22] - Total Starz Networks subscribers as of June 30, 2025, were 19.08 million, a decrease from 19.60 million in the previous quarter[22] Expenses and Costs - STARZ's programming amortization expenses increased to $162.5 million from $147.9 million year-over-year, contributing to total operating expenses of $346.6 million[12] - STARZ's advertising and marketing expenses decreased to $63.4 million from $82.7 million year-over-year, indicating a strategic shift in spending[12] - Total share-based compensation expense for the three months ended June 30, 2025, was $7.4 million, compared to $5.2 million for the same period in 2024[20] - Restructuring and other costs for the three months ended June 30, 2025, amounted to $6.4 million, reflecting transaction and integration costs associated with strategic transactions[16] - The adjusted share-based compensation expense remained stable at $5.2 million for both the three months ended June 30, 2025, and June 30, 2024[20] - The company reported a depreciation and amortization expense of $48.7 million for the three months ended June 30, 2025[14] Debt and Cash Position - The company had total net debt of $573.5 million, with $300 million outstanding on its Term Loan A credit facility and $325.1 million in senior unsecured notes[5] - STARZ's cash and cash equivalents increased to $51.6 million at the end of the quarter, up from $17.8 million at the beginning of the period[11][13] Future Outlook - The company anticipates sequential revenue and OTT subscriber growth in Q3 and Q4 of 2025, supported by a compelling content slate and improved cost structure[2][3] - The company is focusing on strategic transactions and restructuring activities to improve operational efficiency and financial performance[17]