Financial Data and Key Metrics Changes - STARZ ended the year with an all-time high of 12.7 million OTT subscribers, growing year-over-year by 7.6% and adding 370,000 in Q4 alone [5][15] - Total revenue for Q4 was $323 million, up 60 basis points sequentially, driven by an increase in distribution revenue [16] - Adjusted OIBDA for the quarter was $56 million, up over 100% sequentially, with total adjusted OIBDA for the year reaching $204 million, exceeding the $200 million outlook [17][18] - The company ended the year with a leverage ratio of 2.9x, better than the previous guidance of 3.1x [18] Business Line Data and Key Metrics Changes - The increase in OTT subscribers was partially offset by a decline in linear customers, with total U.S. subscribers growing to 17.6 million [15] - The growth in subscribers was driven by demand for scripted originals, including "Force" and "Spartacus" [16] Market Data and Key Metrics Changes - The company is focusing on the U.S. market after restructuring its Canadian business into a licensing revenue stream [9] - The company anticipates generating between $80 million to $120 million of positive unlevered free cash flow in 2026, marking a significant improvement year-over-year [18] Company Strategy and Development Direction - STARZ aims to increase margins to 20% by 2028, with a slight improvement expected in 2026 [22] - The company is de-emphasizing the need to manage the business around quarterly subscriber levels, focusing instead on OTT revenue growth and profitability [12] - STARZ is positioned to capitalize on potential M&A opportunities due to increased consolidation across the media landscape [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to 2026, driven by a compelling lineup of originals [7] - The company believes it is uniquely positioned to capitalize on potential M&A opportunities due to its track record of profitably converting from linear to digital [12] - Management noted that 2026 is expected to be an inflection point for cash flow generation [11] Other Important Information - The company will not disclose subscriber numbers starting with the March 2026 quarter, focusing instead on revenue growth and profitability [12] - STARZ has made significant strides in de-aging its content slate while expanding its network-defining franchises [10] Q&A Session Summary Question: Can you walk us through some of the moving pieces regarding OTT revenue and total revenue? - Management indicated that they are on track to exceed the 20% margin target by 2028, with slight improvements expected in 2026 [22][24] Question: What kind of assets would you be interested in for potential M&A? - Management stated they are looking for linear networks with great brands that complement their core demos, while maintaining a leverage constraint of around 2.5x [27] Question: How do you rank order your capital allocation priorities as free cash flow improves? - Management noted that as free cash flow improves, they would consider returning cash to shareholders while continuing to invest in the business [28] Question: Can you discuss the retention patterns for subscribers? - Management highlighted that the programming slate is designed to maintain strong retention throughout the year, supported by longer-term offers [34] Question: How do you view the demand environment for your programming internationally? - Management expressed confidence in the international market, particularly in the U.K. and France, and noted a strong appetite for their content [48] Question: How do you think about relying on spin-offs versus new originals? - Management emphasized the importance of franchising successful shows like "Power" and "Outlander" to drive engagement and acquisition [54]

Financial Data and Key Metrics Changes - STARZ achieved an all-time high of 12.7 million OTT subscribers, growing year-over-year by 7.6% and adding 370,000 subscribers in Q4 alone [5][15] - Total revenue for the quarter was $323 million, up 60 basis points sequentially, driven by an increase in Distribution revenue [16] - Adjusted OIBDA for Q4 was $56 million, up over 100% sequentially, with a total of $204 million for the year, exceeding the $200 million outlook [17][18] - The company ended the year with a leverage ratio of 2.9x, better than the previous guidance of 3.1x [18] Business Line Data and Key Metrics Changes - The increase in OTT subscribers was partially offset by a decline in linear customers, with total U.S. subscribers growing to 17.6 million [15] - The growth in subscribers was driven by demand for scripted originals, including "Force" and "Spartacus" [16] Market Data and Key Metrics Changes - The company restructured its Canadian business into a Licensing revenue stream, focusing on the U.S. market [9] - The transition to a content licensing relationship in Canada impacted revenue recognition, contributing to the sequential revenue growth [16] Company Strategy and Development Direction - STARZ aims to increase margins to 20% by 2028, with a focus on owning more content and expanding its programming slate [10][22] - The company is positioned to capitalize on potential M&A opportunities due to increased consolidation in the media landscape [12] - STARZ plans to de-emphasize quarterly subscriber management and focus on long-term OTT revenue growth and profitability [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to 2026, driven by a compelling lineup of originals and a focus on underrepresented audiences [7][8] - The company expects unlevered free cash flow to range between $80 million and $120 million in 2026, with a continued focus on reducing leverage [18][19] Other Important Information - STARZ will not disclose subscriber numbers starting with the March 2026 quarter, focusing instead on revenue growth and profitability [12] - The company is excited about expanding bundling relationships, which are driving new additions and better retention [34][35] Q&A Session Summary Question: Can you walk us through some of the moving pieces regarding OTT revenue and total revenue? - Management indicated that OTT revenue is expected to grow, with a slight improvement in margins anticipated for 2026, while significant improvements are expected in 2027 and 2028 [21][22] Question: What kind of assets would you be interested in for potential M&A? - Management highlighted the importance of complementary assets that can transition from linear to digital, emphasizing a cautious approach to leverage [25][27] Question: How do you rank order your capital allocation priorities as free cash flow improves? - Management noted that as free cash flow improves, they will consider returning cash to shareholders while continuing to invest in the business [28] Question: Can you discuss the retention patterns for subscribers from recent shows? - Management stated that the programming slate is designed to maintain subscriber retention throughout the year, supported by longer-term offers [32][33] Question: How do you view the demand environment for your programming internationally? - Management expressed optimism about the international market, particularly in the U.K. and France, and highlighted the strong relationship with Sky as a key partnership [48] Question: How do you plan to manage pricing strategy going forward? - Management indicated that they aim to remain underpriced compared to broad-based streamers, allowing room for future price increases [50] Question: How do you weigh starting new shows versus spin-offs of existing successful shows? - Management emphasized the importance of franchising successful shows like "Power" and "Outlander" to drive engagement and launch new IP [53][55]

Financial Data and Key Metrics Changes - Starz Entertainment ended Q4 2025 with 12.7 million OTT subscribers, a year-over-year growth of 7.6% and added 370,000 subscribers in Q4 alone [4][13] - Total revenue for Q4 was $323 million, reflecting a sequential increase of 60 basis points, driven by distribution revenue from the transition of Canadian operations to a licensing model [13][14] - Adjusted OIBDA for Q4 was $56 million, up over 100% sequentially, with a total of $204 million for the year, exceeding the $200 million outlook [14][15] - The company ended 2025 with a leverage ratio of 2.9x, better than the guidance of 3.1x [15] Business Line Data and Key Metrics Changes - The growth in OTT subscribers was partially offset by a decline in linear customers, with total U.S. subscribers reaching 17.6 million [13] - The strong performance in Q4 was attributed to the success of scripted originals like "Spartacus" and "Power Book IV: Force" [5][12] Market Data and Key Metrics Changes - The company is focusing on the U.S. market after restructuring its Canadian operations into a licensing revenue stream [7] - Starz is positioned to capitalize on potential M&A opportunities due to increased consolidation in the media landscape [10] Company Strategy and Development Direction - The company aims to increase margins to 20% by 2028, with a slight improvement expected in 2026 [18] - Starz is focusing on delivering edgy, premium content for women and underrepresented audiences, which broad-based streamers do not address [6] - The company plans to de-emphasize quarterly subscriber management and will not disclose subscriber numbers starting March 2026 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to 2026, driven by a compelling lineup of originals and a focus on profitability and cash flow generation [6][9] - The company expects unlevered free cash flow to range between $80 million and $120 million in 2026, representing a significant year-over-year improvement [15][16] Other Important Information - Starz has announced a co-commission partnership with Sky for the series "Fightland," which is expected to improve unit economics [7][10] - The company is also focusing on bundling partnerships to expand its distribution relationships and drive new additions to the business [30][31] Q&A Session Summary Question: Can you walk us through some of the moving pieces regarding OTT revenue and total revenue? - Management indicated that there will be slight improvements in margins in 2026, with significant improvements expected in 2027 and 2028 as original content becomes a larger part of the slate [18][19] Question: What kind of assets would you be interested in for potential M&A? - Management stated they are looking for linear networks with strong brands that complement their core demos, while maintaining a leverage constraint of around 2.5x [21][23] Question: How do you rank order your capital allocation priorities as free cash flow improves? - Management noted that as free cash flow improves, they will consider returning cash to shareholders while continuing to invest in the business [24] Question: Can you discuss the retention patterns for subscribers from recent successful shows? - Management highlighted that the programming slate is designed to maintain subscriber retention throughout the year, with longer-term offers helping to reduce churn [28][29] Question: How do you view the demand environment for your programming internationally? - Management expressed optimism about the appetite for their content in international markets, particularly in the U.K. and France, and emphasized the importance of their relationship with Sky [43][44] Question: How do you plan to manage pricing strategy going forward? - Management indicated they will monitor the pricing strategies of broad-based streamers and adjust their pricing accordingly to maintain competitiveness [45] Question: How do you weigh starting new shows versus spin-offs of reliable franchises? - Management emphasized the importance of franchising and how successful franchises like "Power" and "Outlander" serve as platforms to launch new IP [48][50]

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].

Core Insights - STARZ is currently offering its lowest subscription prices, making it one of the most affordable streaming services available [2][4][7] - The platform features a diverse range of content, including popular series and blockbuster movies, appealing to a wide audience [1][8] Pricing and Plans - The annual subscription plan is priced at $23.99, down from $69.99, representing a 66% discount [4][7] - The monthly subscription is available for $3.99, reduced from $10.99, which is a 64% savings [6][7] - The annual plan requires upfront payment for the full year, while the monthly plan allows for a three-month commitment [9][14] Content Offering - STARZ provides access to hit series such as "Outlander," "BMF," and "The Spanish Princess," along with popular movies like "Spider-Man: No Way Home" and "Fast X" [1][8] - The service is noted for its ad-free experience and frequent promotional deals throughout the year [6][7] Subscription Details - The current discounts are valid for the first year of the annual plan or the first three months of the monthly plan [9][12] - Existing subscribers can take advantage of the annual deal if they re-subscribe, while the monthly deal is exclusive to new subscribers [12] - The subscription will automatically renew at the standard price after the promotional period ends [9]