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Starz Entertainment Q1 Loss Wider Than Expected, Revenues Fall Y/Y
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Key Takeaways
STRZ reported Q1 revenues of $306.9M, down 7.2% YoY and marginally missed estimates.
STRZ posted a wider operating loss as OTT and linear revenues both declined from year-ago levels.
STRZ reiterated 2026 targets and moved up its 20% adjusted OIBDA margin goal to second-half 2027.
Starz Entertainment (STRZ - Free Report) reported a first-quarter 2026 loss of $1.55 per share, wider than the Zacks Consensus Estimate of a loss of 62 cents.
The company reported a net loss of $9.83 per share, wider than the year-ago quarter's reported loss of $9.15.
Revenues came in at $306.9 million, down 7.2% year over year, and marginally missed the consensus mark of $307 million by 0.12%. Sequentially, total revenues declined approximately 5%.
STRZ’s Q1 Revenue Breakdown
OTT revenues reached $211.1 million (68.8% of total revenues), down 6.4% from $225.5 million in the year-ago quarter, reflecting ongoing pressure across the direct-to-consumer and wholesale streaming landscape. Even so, management highlighted sequential improvement.
Starz Entertainment Corp. Price, Consensus and EPS Surprise
Linear and other revenues came in at $95.8 million (31.2% of total revenues), down 8.8% from $105.1 million.
STRZ’s Operating Performance
Operating loss was $152.8 million, compared with $142.3 million in the prior-year quarter, reflecting the combined effect of lower revenues and heavier cost items.
Adjusted OIBDA was $58.0 million, down from $93.3 million in the year-ago quarter, while still improving sequentially from $55.5 million.
On a trailing 12-month basis, adjusted OIBDA totaled $168.7 million, translating into an adjusted OIBDA leverage ratio of 3.1x at quarter-end.
STRZ’s Q1 Balance Sheet & Cash Flow
As of March 31, 2026, cash and cash equivalents totaled $102.1 million. Total debt was $625.1 million and net debt stood at $523.0 million, with an adjusted OIBDA leverage ratio of 3.1x on a trailing 12-month basis. The company’s $150 million revolving credit facility remained fully undrawn.
Net cash provided by operating activities was $73.2 million in the first quarter of 2026. Equity-free cash flow was $68.7 million.
Unlevered free cash flow was $80.7 million, supported by the stronger operating cash result and provides a cleaner view of underlying liquidity as the company works to reduce leverage.
STRZ’s 2026 Outlook
For 2026, Starz Entertainment reiterated its previously provided outlook targets, including positive year-over-year OTT revenue growth and low-single-digit year-over-year adjusted OIBDA growth. The company continues to expect unlevered free cash flow of $80 million to $120 million and an adjusted OIBDA leverage ratio exiting 2026 at approximately 2.7x.
Management also accelerated its 20% adjusted OIBDA margin outlook to the second half of 2027, one year ahead of prior guidance.
STRZ’s Zacks Rank & Stocks to Consider
Currently, Starz Entertainment carries a Zacks Rank #3 (Hold).
American Public Education is slated to announce first-quarter 2026 results on May 11. Meanwhile, Fox will report on May 11, and Hasbro is scheduled to release results on May 20.
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Starz Entertainment Q1 Loss Wider Than Expected, Revenues Fall Y/Y
Key Takeaways
Starz Entertainment (STRZ - Free Report) reported a first-quarter 2026 loss of $1.55 per share, wider than the Zacks Consensus Estimate of a loss of 62 cents.
The company reported a net loss of $9.83 per share, wider than the year-ago quarter's reported loss of $9.15.
Revenues came in at $306.9 million, down 7.2% year over year, and marginally missed the consensus mark of $307 million by 0.12%. Sequentially, total revenues declined approximately 5%.
STRZ’s Q1 Revenue Breakdown
OTT revenues reached $211.1 million (68.8% of total revenues), down 6.4% from $225.5 million in the year-ago quarter, reflecting ongoing pressure across the direct-to-consumer and wholesale streaming landscape. Even so, management highlighted sequential improvement.
Starz Entertainment Corp. Price, Consensus and EPS Surprise
Starz Entertainment Corp. price-consensus-eps-surprise-chart | Starz Entertainment Corp. Quote
Linear and other revenues came in at $95.8 million (31.2% of total revenues), down 8.8% from $105.1 million.
STRZ’s Operating Performance
Operating loss was $152.8 million, compared with $142.3 million in the prior-year quarter, reflecting the combined effect of lower revenues and heavier cost items.
Adjusted OIBDA was $58.0 million, down from $93.3 million in the year-ago quarter, while still improving sequentially from $55.5 million.
On a trailing 12-month basis, adjusted OIBDA totaled $168.7 million, translating into an adjusted OIBDA leverage ratio of 3.1x at quarter-end.
STRZ’s Q1 Balance Sheet & Cash Flow
As of March 31, 2026, cash and cash equivalents totaled $102.1 million. Total debt was $625.1 million and net debt stood at $523.0 million, with an adjusted OIBDA leverage ratio of 3.1x on a trailing 12-month basis. The company’s $150 million revolving credit facility remained fully undrawn.
Net cash provided by operating activities was $73.2 million in the first quarter of 2026. Equity-free cash flow was $68.7 million.
Unlevered free cash flow was $80.7 million, supported by the stronger operating cash result and provides a cleaner view of underlying liquidity as the company works to reduce leverage.
STRZ’s 2026 Outlook
For 2026, Starz Entertainment reiterated its previously provided outlook targets, including positive year-over-year OTT revenue growth and low-single-digit year-over-year adjusted OIBDA growth. The company continues to expect unlevered free cash flow of $80 million to $120 million and an adjusted OIBDA leverage ratio exiting 2026 at approximately 2.7x.
Management also accelerated its 20% adjusted OIBDA margin outlook to the second half of 2027, one year ahead of prior guidance.
STRZ’s Zacks Rank & Stocks to Consider
Currently, Starz Entertainment carries a Zacks Rank #3 (Hold).
American Public Education (APEI - Free Report) , Fox (FOX - Free Report) and Hasbro (HAS - Free Report) are some better-ranked stocks that investors can consider in the broader Consumer Discretionary sector.
American Public Education sports a Zacks Rank #1 (Strong Buy) at present, while Fox and Hasbro carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Public Education is slated to announce first-quarter 2026 results on May 11. Meanwhile, Fox will report on May 11, and Hasbro is scheduled to release results on May 20.