STARZ reported higher revenue and adjusted operating earnings for the third quarter, with both total revenue and over-the-top (OTT) revenue up from the prior quarter and a year earlier. The company still posted an operating loss, but adjusted OIBDA more than doubled year over year.
Management reaffirmed its 2026 financial targets and its outlook for a 20% adjusted OIBDA margin in the second half of 2027.
Key details
- Revenue was $322.4 million for the quarter ended Sept. 30. STARZ said total revenue and OTT revenue grew both sequentially and year over year; it did not provide the growth rates in the results presented here.
- Operating loss was $21.2 million. Adjusted OIBDA, the company’s adjusted operating measure, was $44.2 million, more than twice the year-earlier level.
- Cash generation was positive: STARZ generated $18.9 million in cash from operations, $18.8 million in unlevered free cash flow and $13.1 million in equity free cash flow.
- Cash and debt at quarter-end: STARZ had $86.8 million in cash and $687.5 million in total debt, comprising a $362.4 million term loan and $325.1 million of senior unsecured notes. Net corporate debt was $600.7 million.
- Leverage was 2.8 times trailing 12-month adjusted OIBDA. The company’s $183 million revolving credit facility was undrawn.
- 2026 targets remain unchanged: STARZ reiterated its outlook for positive year-over-year OTT revenue growth, mid-single-digit percentage growth in adjusted OIBDA, and $100 million to $120 million in unlevered free cash flow.
- The company also reaffirmed its target of a 20% adjusted OIBDA margin in the second half of 2027 and said it was reiterating its 2026 and 2027 targets across its key financial priorities, including leverage.
- CEO Jeffrey Hirsch said STARZ’s portfolio approach to programming is helping build a more durable revenue base. He said the company remains confident in its plan.
What it means
STARZ combined year-over-year revenue growth with a sharp increase in adjusted OIBDA and positive free cash flow, while still recording an operating loss. Its reported debt and leverage figures provide context for the company’s stated focus on improving earnings, cash generation and leverage.