Starz Narrows Net Loss to $34.8 Million as Streaming Offsets Linear Declines

Starz reported a net loss of $2.02 per share, on revenue of $322.4 million, beating the $2.96 per share loss and $319.5 million in revenue expected by Wall Street analysts, per Yahoo Finance. Executives maintained the company’s outlook for 2026, which includes positive-year-over-year streaming growth and mid single-digit growth in adjusted operating income Shares of the company fell 3.4% to $21.74 on Thursday ahead of the results. Starz posted its second consecutive quarter of revenue growth and narrowed its net loss as growth in its streaming business offset continued declines in the linear TV business. The company beat Wall Street expectations, with total revenue growing 0.5% to $322.4 million on a narrowed net loss to $34.8 million, or $2.02 per share. Wall Street had expected revenue of $319.5 million on a loss of $2.96 a share. Streaming revenue grew 1.7% to $226.6 million, driven by annual subscribers renewing at higher promotional pricing as well as the continued impact of its April price increase. Also bolstering the results was the finale of “Power Book III: Raising Kanan,” the premiere of its first owned original “Fightland,” “Outlander: “Blood of My Blood” Season 2, “S.W.A.T. Exiles.” and the “Michael” biopic — Starz’s best-performing Pay 1 title in history. Starz CEO and President Jeff Hirsch noted that engagement among long-tenured subscribers on its app — those who have been with the service for a year or more — reached all-time highs in both numbers and share. The company no longer reports subscriber figures on a quarterly basis, following in the footsteps of major players Netflix, Disney and Warner Bros. Discovery, but last disclosed a total of 12.7 million over-the-top subscribers and 5 million linear TV subscribers in February. As of the end of 2025, Starz’s Canada business also transitioned from a distribution partnership with Bell Media to a content licensing model. When adjusting for this change, streaming revenue growth for the quarter would’ve been 3.2%. Meanwhile linear and other revenue fell 2.3% to $95.8 million. The continued decline in linear viewership due to cord-cutting was partially offset by increased distribution revenue, driven by “Fightland.” The third quarter results included $67 million in “depreciation and amortization” expenses, the majority of which was tied to legacy linear distribution agreements. “Our third-quarter results reflect the continued strength of the business and our focused execution against our four key financial priorities. Our portfolio approach to programming is driving a more durable revenue base, and we are just beginning to unlock the financial upside of increased ownership,” Hirsch said. “We remain confident in our outlook and in our ability to continue delivering against our plan and create long-term value for our shareholders.” Looking ahead, Starz executives expect the return of “P-Valley” to drive subscriber growth and engagement in the fourth quarter. In 2027, it will also debut the 18-episode first season of “Power: Origins” and its second owned original, the untitled Black Rodeo series, which is in production. “As our owned library grows, we expect to capture more of the economic value created by our content,” Hirsch said. Hirsch added that it is “well positioned” to benefit as the industry moves toward greater consolidation and bundling. Starz launched in Prime Video’s first-ever five-service bundle in September and reached a new carriage deal with Verizon Fios in October. “Starz does not need to own the entire consumer ecosystem to grow,” he continued. “Traditional distribution, add-on subscriptions, strategic partnerships, and new bundles give us multiple ways to reach our audiences wherever they choose to watch.” Starz executives reiterated the company’s full-year outlook of positive-year-over-year streaming growth, mid single-digit growth in adjusted operating income, unlevered free cash flow of $100 million to $120 million and a leverage ratio of approximately 2.7x exiting 2026. The company also continues to expect cash content spend below $600 million in 2026, an adjusted operating margin of 20% in the second half of 2027 and an increase in annual free cash flow in 2029 following the termination of payments in 2028 tied to exiting its pay-2 deal with Universal. Starz ended the quarter with net debt of $601 million and an adjusted operating leverage ratio of 2.8x, its lowest level since separating from Lionsgate. “Our financial story is simple: growing OTT revenue, expanding margins, growing free cash flow, and reducing leverage,” Chief Financial Officer Scott MacDonald said. “We’re confident in our trajectory, and we look forward to continuing to demonstrate our progress.”