Starz's Net Loss Widens Post-Lionsgate Split Amid Revenue Decline

TL;DR

**Starz is bleeding cash post-split, and its content strategy isn't translating to revenue growth yet – stay away.**

AI Summary

STARZ ENTERTAINMENT CORP. (STRZ) reported a net loss of $52.6 million for the three months ended September 30, 2025, a significant increase from the $30.6 million net loss in the prior-year period. For the six months ended September 30, 2025, the net loss widened to $95.1 million, compared to a $26.4 million net loss in the same period of 2024. Total revenue decreased to $320.9 million for the three months ended September 30, 2025, down from $346.9 million in the prior year, with OTT revenue falling from $232.2 million to $222.8 million and linear revenue declining from $114.7 million to $98.1 million. The company completed its separation from Old Lionsgate on May 6, 2025, becoming a standalone public entity. Strategic content reviews led to the cancellation of certain programming and abandonment of others with limited strategic purpose. Programming amortization decreased to $156.8 million from $182.1 million in the three-month period, while advertising and marketing expenses increased to $78.4 million from $75.5 million. The company also reported a current portion of debt of $3.8 million as of September 30, 2025, up from zero on March 31, 2025, and total debt decreased from $699.9 million to $608.7 million.

Why It Matters

This filing reveals Starz's financial performance as a newly independent company, shedding light on the challenges of operating without Lionsgate's broader studio support. The widening net loss and declining revenue, particularly in OTT, signal potential headwinds in a highly competitive streaming market dominated by larger players like Netflix and Disney+. Investors should scrutinize Starz's ability to generate sustainable growth and profitability, especially given its strategic content review and international restructuring. Employees may face continued uncertainty as the company navigates its new standalone structure and cost-cutting measures. Customers could see shifts in content strategy as Starz aims to optimize its programming slate.

Risk Assessment

Risk Level: high — The company reported a significant net loss of $95.1 million for the six months ended September 30, 2025, compared to a $26.4 million net loss in the prior year, indicating deteriorating profitability. Total revenue declined from $694.5 million to $640.6 million over the same six-month period, suggesting difficulty in growing its core business in a competitive market. The increase in current debt to $3.8 million from zero also signals immediate financial obligations.

Analyst Insight

Investors should exercise extreme caution and consider avoiding STRZ stock given the widening net losses and declining revenue post-separation. Monitor future filings for signs of successful content strategy execution and a reversal in financial performance before considering any investment.

Financial Highlights

debt To Equity

0.92

revenue

$320.9M

operating Margin

-10.8%

total Assets

$1,972.4M

total Debt

$608.7M

net Income

-$52.6M

eps

-$3.15

gross Margin

N/A

cash Position

$37.0M

revenue Growth

-7.5%

Revenue Breakdown

Key Numbers

• $52.6M — Net Loss (3 months) (Increased from $30.6M in prior year)
• $95.1M — Net Loss (6 months) (Increased from $26.4M in prior year)
• $320.9M — Total Revenue (3 months) (Decreased from $346.9M in prior year)
• $640.6M — Total Revenue (6 months) (Decreased from $694.5M in prior year)
• $222.8M — OTT Revenue (3 months) (Decreased from $232.2M in prior year)
• $98.1M — Linear Revenue (3 months) (Decreased from $114.7M in prior year)
• $156.8M — Programming Amortization (3 months) (Decreased from $182.1M in prior year)
• $78.4M — Advertising and Marketing (3 months) (Increased from $75.5M in prior year)
• $608.7M — Total Debt (Decreased from $699.9M as of March 31, 2025)
• 16.7M — Common Shares Outstanding (As of November 10, 2025)

Key Players & Entities

• STARZ ENTERTAINMENT CORP (company) — Registrant
• Lions Gate Entertainment Corp (company) — Former Parent Company
• Lionsgate Studios Corp. (company) — New entity after separation
• SEC (regulator) — Securities and Exchange Commission
• Nasdaq Stock Market LLC (company) — Exchange where STRZ is registered
• $52.6 million (dollar_amount) — Net loss for three months ended September 30, 2025
• $95.1 million (dollar_amount) — Net loss for six months ended September 30, 2025
• $320.9 million (dollar_amount) — Total revenue for three months ended September 30, 2025
• $608.7 million (dollar_amount) — Total debt as of September 30, 2025
• May 6, 2025 (date) — Date of separation from Old Lionsgate

FAQ

Risk Factors

• Content Strategy and Programming Costs [high — operational]: The company has undertaken strategic content reviews, leading to the cancellation of certain programming and abandonment of others. This impacts programming amortization, which decreased to $156.8 million for the three months ended September 30, 2025, down from $182.1 million in the prior year. However, the effectiveness and future appeal of remaining content are critical to revenue generation.
• Increased Net Loss and Revenue Decline [high — financial]: STARZ reported a net loss of $52.6 million for the three months ended September 30, 2025, a significant increase from $30.6 million in the prior year. Total revenue also declined to $320.9 million from $346.9 million. This widening loss and revenue contraction raise concerns about financial sustainability.
• Debt Management [medium — financial]: Total debt decreased from $699.9 million as of March 31, 2025, to $608.7 million as of September 30, 2025. However, the current portion of debt increased to $3.8 million from zero, indicating a need for careful management of short-term obligations.
• Competition in Streaming Market [high — market]: The company operates in a highly competitive streaming market with numerous players offering diverse content. The decline in OTT revenue from $232.2 million to $222.8 million suggests challenges in retaining subscribers or attracting new ones amidst intense competition.
• Increased Advertising and Marketing Spend [medium — operational]: Advertising and marketing expenses increased to $78.4 million from $75.5 million in the three-month period. While intended to drive growth, this increased expenditure without a corresponding revenue increase could pressure margins.
• Separation from Old Lionsgate [medium — regulatory]: The company completed its separation from Old Lionsgate on May 6, 2025, becoming a standalone entity. This transition may involve ongoing adjustments and potential regulatory scrutiny related to its new corporate structure and operations.

Industry Context

The streaming entertainment industry remains highly competitive, characterized by a proliferation of content providers vying for subscriber attention and market share. Companies are increasingly focused on content differentiation, cost management, and optimizing revenue models, including direct-to-consumer (DTC) offerings and traditional distribution channels. Economic pressures and evolving consumer preferences continue to shape demand for premium content.

Regulatory Implications

As a standalone public entity following its separation from Old Lionsgate, STARZ may face increased scrutiny regarding its financial reporting and corporate governance. Compliance with securities regulations and industry-specific broadcasting laws remains paramount. Any shifts in content ownership or distribution agreements could also trigger regulatory considerations.

What Investors Should Do

1. Monitor subscriber growth and churn rates
2. Analyze the impact of content strategy changes
3. Evaluate debt reduction and cash flow generation
4. Assess competitive positioning

Key Dates

• 2025-09-30: End of Third Quarter 2025 — Reporting period for the 10-Q, showing increased net loss and decreased revenue.
• 2025-05-06: Separation from Old Lionsgate — Became a standalone public entity, marking a significant corporate restructuring.
• 2025-03-31: End of Second Quarter 2025 — Previous reporting period, showing a lower net loss and higher total debt.

Glossary

OTT revenue

Revenue generated from Over-The-Top streaming services, delivered directly to consumers over the internet. (A key revenue stream for STARZ, showing a decline in this period.)

Linear and other revenue

Revenue from traditional television channels and other non-streaming sources. (Another significant revenue component for STARZ, which also declined.)

Programming amortization

The systematic expensing of the cost of acquired or produced programming content over its expected useful life. (A major operating expense for STARZ, which decreased due to content strategy changes.)

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income. (Indicates the company has incurred more losses than profits since its inception.)

Debt to Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. (Measures financial leverage; calculated as Total Debt / Total Equity.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, STARZ ENTERTAINMENT CORP. has experienced a significant increase in net losses, with the three-month period widening from $30.6 million to $52.6 million and the six-month period from $26.4 million to $95.1 million. Total revenue has also declined, with the three-month period falling from $346.9 million to $320.9 million and the six-month period from $694.5 million to $640.6 million. This indicates a challenging operating environment characterized by revenue contraction and escalating losses, despite a reduction in programming amortization expenses.

Filing Documents

• starz-20250930.htm (10-Q) — 1518KB
• exhibit311certificationofc.htm (EX-31.1) — 9KB
• exhibit312certificationofc.htm (EX-31.2) — 9KB
• exhibit321certificationofc.htm (EX-32.1) — 5KB
• 0000929351-25-000142.txt ( ) — 7332KB
• starz-20250930.xsd (EX-101.SCH) — 54KB
• starz-20250930_cal.xml (EX-101.CAL) — 81KB
• starz-20250930_def.xml (EX-101.DEF) — 264KB
• starz-20250930_lab.xml (EX-101.LAB) — 574KB
• starz-20250930_pre.xml (EX-101.PRE) — 442KB
• starz-20250930_htm.xml (XML) — 1011KB

Financial Information

Part I. Financial Information Item 1 .

Financial Statements (Unaudited)

Financial Statements (Unaudited) 4 Unaudited Condensed Consolidated Balance Sheets 4 Unaudited Condensed Consolidated Statements of Operations 5 Unaudited Condensed Consolidated Statements of Comprehensive L oss 6 Unaudited Condensed Consolidated Statements of Equity 7 Unaudited Condensed Consolidated Statements of Cash Flows 8 Notes to Unaudited Condensed Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 47 Item 4.

Controls and Procedures

Controls and Procedures 48

Other Information

Part II. Other Information 48 Item 1.

Legal Proceedings

Legal Proceedings 48 Item 1A.

Risk Factors

Risk Factors 48 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 48 Item 3. Defaults Upon Senior Securities 48 Item 4. Mine Safety Disclosures 48 Item 5. Other Information 48 Item 6. Exhibits 49

Signatures

Signatures 50 2 Table of Contents STARZ ENTERTAINMENT CORP.

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q includes statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "potential," "anticipates," "expects," "intends," "plans," "projects," "forecasts," "may," "will," "could," "would" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those discussed under Part I, Item 1A. Risk Factors found in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on June 26, 2025 (the "Form 10-K") as updated by any update to the risk factors found under Part II, Item 1A. "Risk Factors" herein. These risk factors should not be construed as exhaustive and should be read with our Form 10-K and the other cautionary statements and information in this report. We caution you that forward-looking statements made in this report or anywhere else are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the i

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2025 March 31, 2025 (Amounts in millions) ASSETS Cash and cash equivalents $ 37.0 $ 17.8 Accounts receivable, net 65.5 52.7 Due from LG Studios Business (Note 15) — 81.6 Prepaid expenses and other 11.2 18.4 Total current assets 113.7 170.5 Programming content, net 1,028.7 1,096.3 Property and equipment, net 50.3 48.6 Intangible assets, net 729.8 816.0 Other assets 49.9 41.8 Total assets $ 1,972.4 $ 2,173.2 LIABILITIES Current portion of debt $ 3.8 $ — Accounts payable 83.2 64.5 Programming related payables 312.7 101.8 Other accrued liabilities 40.6 64.5 Residuals 29.8 29.5 Programming related obligations 88.2 90.7 Deferred revenue 41.5 39.4 Due to LG Studios Business (Note 15) — 232.1 Total current liabilities 599.8 622.5 Debt 608.7 699.9 Other liabilities 92.4 75.9 Deferred tax liabilities 8.3 8.5 Total liabilities 1,309.2 1,406.8 Contingencies (Note 16) EQUITY Common stock, no par value, unlimited authorized, 16.7 shares issued (March 31, 2025 – nil ) 731.8 — Accumulated other comprehensive income 19.2 19.2 Parent net investment — 747.2 Accumulated deficit ( 87.8 ) — Total equity 663.2 766.4 Total liabilities and equity $ 1,972.4 $ 2,173.2 See accompanying notes. 4 Table of Contents STARZ ENTERTAINMENT CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Six Months Ended September 30, September 30, 2025 2024 2025 2024 (Amounts in millions) (Amounts in millions) Revenue OTT revenue $ 222.8 $ 232.2 $ 443.9 $ 466.6 Linear and other revenue 98.1 114.7 196.7 227.9 Total revenue 320.9 346.9 640.6 694.5 Operating expenses: Programming amortization 156.8 182.1 319.3 330.0 Other operating 38.8 39.9 75.3 79.2 Advertising and marketing 78.4 75.5 141.8 158.2 General and administrative 28.8 26.3 57.9 52.9 Depreciation and amortization 47.9 41.2 96.6 82.8 Restructuring and other 5.0 ( 1.1 ) 11.4

View Full Filing

View this 10-Q filing on SEC EDGAR