{"id":2408655,"date":"2026-05-09T04:12:15","date_gmt":"2026-05-09T04:12:15","guid":{"rendered":"https:\/\/celebrity.land\/en\/?p=2408655"},"modified":"2026-05-09T04:12:15","modified_gmt":"2026-05-09T04:12:15","slug":"starz-entertainment-q1-earnings-call-highlights","status":"publish","type":"post","link":"https:\/\/celebrity.land\/en\/starz-entertainment-q1-earnings-call-highlights\/","title":{"rendered":"Starz Entertainment Q1 Earnings Call Highlights"},"content":{"rendered":"

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Starz Entertainment logo <\/figcaption><\/figure>\n

Starz Entertainment (NASDAQ:STRZ) executives said the company delivered a strong first quarter of fiscal 2026 and is moving faster than previously expected toward its long-term margin target, aided by content cost reductions, pricing discipline and a shift toward owned original programming.<\/p>\n

President and CEO Jeffrey Hirsch said the quarter coincided with the one-year anniversary of Starz\u2019s separation and argued that the company is now \u201cstructurally stronger\u201d than it was at the time of the split. He said Starz has met or exceeded its key first-year financial targets, including improving margins, converting adjusted OIBDA into free cash flow and reducing leverage.<\/p>\n

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\u201cCalendar 2026 will serve as a financial inflection point for the business,\u201d Hirsch said, adding that Starz is now managing against four core metrics: OTT revenue growth, adjusted OIBDA, free cash flow and deleveraging.<\/p>\n

Quarterly Results Meet or Exceed Guidance <\/h2>\n

CFO Scott Macdonald said first-quarter OTT revenue was $211 million, up from $210 million in the fourth quarter of fiscal 2025. Total revenue was $307 million, down from $323 million sequentially, primarily due to the timing of Canadian licensing revenue.<\/p>\n

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Adjusted OIBDA was $58 million in the quarter, up sequentially from the prior quarter, driven mainly by lower advertising and general and administrative expenses. On a year-over-year basis, adjusted OIBDA declined due to lower revenue and higher content amortization, partly offset by lower advertising and marketing expenses.<\/p>\n

Macdonald said the adjusted OIBDA result was ahead of the company\u2019s internal plan, supporting Starz\u2019s full-year forecast for low single-digit adjusted OIBDA growth. He also said quarterly adjusted OIBDA should be more consistent in 2026 than it was in 2025.<\/p>\n

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Unlevered free cash flow was $81 million in the quarter, up $147 million year over year, while equity free cash flow rose $136 million year over year to $69 million. Macdonald cautioned that the quarter benefited from lower content spending, which the company expects to catch up in the second quarter, and said Starz is not raising its free cash flow outlook at this time.<\/p>\n

As of March 31, Starz had net debt of $523 million and a leverage ratio of 3.1x. Macdonald said the company remains confident it can exit the year at approximately 2.7x leverage. Starz\u2019s $150 million revolver remains undrawn.<\/p>\n

Universal Pay-2 Exit Pulls Margin Target Forward <\/h2>\n

A key development in the quarter was Starz\u2019s decision to exit its Pay-2 agreement with Universal. Hirsch said the Universal titles were \u201cincredibly popular\u201d and had significant box office strength, but their performance on Starz was lower than expected because of high subscriber overlap with Amazon, where the titles were heavily watched before reaching Starz in the Pay-2 window.<\/p>\n<\/p><\/div>\n