Starz Entertainment Corp. Reports Results for the Third Quarter Ended September 30, 2026

STARZ posts higher OTT revenue and cash flow, but losses persist amid heavy content costs.

What the company is saying

STARZ, led by President and CEO Jeffrey Hirsch, emphasizes sequential and year-over-year growth in OTT and total revenue for the quarter ended September 30, 2026. The company highlights Adjusted OIBDA of $44.2 million for the quarter and net cash flows from operating activities of $18.9 million, positioning these as signs of operational strength. Management reiterates all 2026 and 2027 financial targets, including OTT revenue growth, Adjusted OIBDA growth, leverage reduction, and unlevered free cash flow, projecting confidence in their ability to deliver long-term value. The release foregrounds the durability of the revenue base driven by a portfolio programming approach and increased content ownership. STARZ also notes the maintenance of a fully undrawn $183.0 million revolving credit facility and a 2.8x Adjusted OIBDA leverage ratio. The tone is measured, with forward-looking statements presented as reaffirmations rather than new guidance, and the company is transparent about ongoing restructuring and content impairment costs.

What the data suggests

The quarter ended September 30, 2026, saw STARZ generate $322.4 million in total revenue, with OTT revenue at $226.6 million, up from $222.8 million a year earlier. Operating loss for the quarter was $(21.2) million, and net loss was $(34.8) million, or $(2.02) per share. Adjusted OIBDA reached $44.2 million for the quarter, contributing to $217.6 million over the trailing twelve months. Net cash flows from operating activities were $18.9 million, and unlevered free cash flow was $18.8 million. As of September 30, 2026, cash and equivalents stood at $86.8 million, with total debt of $687.5 million and net corporate debt of $600.7 million. The company incurred $141.5 million in programming amortization and $74.2 million in advertising and marketing expenses for the quarter. Restructuring and other costs were a credit of $(8.3) million in Q3, but totaled $291.4 million over the trailing twelve months, including $136.1 million in contract termination fees and $133.3 million in content impairments. The company’s $183.0 million revolving credit facility remains fully undrawn. While the company claims Adjusted OIBDA more than doubled year-over-year, the prior year figure is not disclosed, limiting verification. The data shows modest OTT revenue growth, positive cash flow, and heavy ongoing content and restructuring costs, with persistent operating and net losses.

Analysis

The announcement provides a comprehensive and factual disclosure of STARZ's financial results for the quarter ended September 30, 2026, including revenue, cash flow, debt, and profitability metrics. The tone is measured, with most claims supported by disclosed numbers. While the company highlights sequential and year-over-year growth in OTT revenue and Adjusted OIBDA, it also transparently reports an operating loss and net loss for the quarter. The only forward-looking statements are reiterations of previously issued guidance for 2026 and 2027, which are reasonable and not overstated. There is no evidence of exaggerated language or narrative inflation; the release avoids promotional phrasing and sticks to quantitative facts. The capital intensity flag is not triggered, as no new large capital outlay is announced and the benefits discussed are tied to current operations. The gap between narrative and evidence is minimal, with the only minor inflation being the unverified claim of Adjusted OIBDA 'more than doubling' year-over-year, as the prior year figure is not disclosed.

Risk flags

• ●Sustained operating and net losses remain a core risk, with a $(21.2) million operating loss and $(34.8) million net loss for the quarter, indicating that revenue growth has not yet translated into profitability.
• ●Content amortization and impairment costs are high, with $141.5 million in programming amortization for the quarter and $133.3 million in content impairments over the trailing twelve months, suggesting ongoing pressure on margins if content investments do not yield expected subscriber or revenue gains.
• ●Restructuring and contract termination costs, totaling $291.4 million over the trailing twelve months, reflect significant business model adjustments and could signal further volatility in future quarters if industry conditions remain challenging.
• ●Leverage remains material, with total debt at $687.5 million and net corporate debt at $600.7 million, creating interest expense drag ($14.0 million for the quarter) and potential refinancing risk if cash flow targets are missed.
• ●Forward-looking targets for Adjusted OIBDA, leverage, and free cash flow are reiterated but not guaranteed, and the company explicitly states that certain GAAP measures cannot be reliably estimated due to the variability of restructuring and share-based compensation expenses.

Bottom line

STARZ’s Q3 2026 results show incremental OTT revenue growth and positive cash flow, but the company remains unprofitable, with significant operating and net losses driven by high content and restructuring costs. The balance sheet is leveraged, with $687.5 million in debt, but liquidity is supported by $86.8 million in cash and a fully undrawn $183.0 million revolver. Management’s reaffirmation of 2026 and 2027 targets signals confidence, but execution will depend on controlling content costs and delivering on free cash flow and leverage reduction. The narrative is credible in its transparency, but the lack of full prior-period comparatives for some growth claims limits independent verification. Investors should focus on whether STARZ can convert revenue gains into sustainable profitability and meet its free cash flow and leverage targets by year-end 2026. The most important takeaway is that, despite some operational improvements, STARZ’s path to profitability remains uncertain and will require disciplined execution over the next year.

Announcement summary

(NASDAQ:STRZ) STARZ reported financial results for the quarter ended September 30, 2026, showing sequential and year-over-year growth in OTT and total revenue. Revenue for the quarter was $322.4 million. The company reported an operating loss of $(21.2) million for the quarter. Adjusted OIBDA for the quarter was $44.2 million. Net cash flows provided by operating activities were $18.9 million. Unlevered Free Cash Flow for the quarter was $18.8 million, and Equity Free Cash Flow was $13.1 million. As of September 30, 2026, STARZ had cash and cash equivalents of $86.8 million. Total debt stood at $687.5 million, 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. The Adjusted OIBDA Leverage Ratio was 2.8x for the trailing twelve months, based on total Adjusted OIBDA of $217.6 million. The company's $183.0 million revolving credit facility remained fully undrawn. OTT revenue for the quarter was $226.6 million, compared to $222.8 million in the prior year period. Linear and other revenue was $95.8 million, compared to $98.1 million in the prior year period. For the nine months ended September 30, 2026, total revenue was $937.2 million, with OTT revenue of $659.0 million and linear and other revenue of $278.2 million. Programming amortization expense for the quarter was $141.5 million. Advertising and marketing expenses were $74.2 million. General and administrative expenses were $31.3 million. Depreciation and amortization expense was $67.4 million. Restructuring and other costs for the quarter were a credit of $(8.3) million. Total expenses for the quarter were $343.6 million. Interest expense for the quarter was $14.0 million. Net loss for the quarter was $(34.8) million, or $(2.02) per basic and diluted share. Weighted average number of common shares outstanding was 17.2 million. As of September 30, 2026, total assets were $1,594.4 million and total liabilities were $1,325.5 million. Common shares issued and outstanding were 17.2 million. For the nine months ended September 30, 2026, net cash flows provided by operating activities were $63.9 million. Capital expenditures for the nine months were $15.5 million. Cash paid for programming content for the nine months ended September 30, 2026 was $469.4 million. Adjusted OIBDA for the trailing twelve months ended September 30, 2026 was $217.6 million. Restructuring and other costs for the trailing twelve months were $291.4 million. Contract termination fees for the trailing twelve months were $136.1 million. Content impairments for the trailing twelve months were $133.3 million. Transaction and other costs for the trailing twelve months were $10.1 million. Severance for the trailing twelve months was $11.0 million. The company reiterated its outlook for positive year-over-year OTT revenue growth, mid-single-digit percentage growth in Adjusted OIBDA, Unlevered Free Cash Flow of $100 million to $120 million, and an Adjusted OIBDA Leverage Ratio of approximately 2.7x exiting 2026. STARZ held an analyst and investor conference call on October 29, 2026, at 5:00 p.m. ET / 2:00 p.m. PT.

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