Q2 2025 Starz Entertainment Corp Earnings Call Transcript
Key Points
- Starz Entertainment Corp (STRZ) reported strong performance from the Outlander prequel, Blood of my Blood, which exceeded expectations and generated the third highest number of subscriber additions for a series premiere in Starz history.
- The company is focusing on a digital-first network strategy, catering to valuable demographics such as women and underrepresented audiences, which has resulted in a profitable transition.
- Starz Entertainment Corp (STRZ) is expecting sequential revenue and OTT subscriber growth in the upcoming quarters, driven by a strong content slate including high-performing series like Force, Raising Kanan, and the return of Spartacus.
- The company is implementing a strategy to reduce content costs, aiming for a 20% margin target run rate by calendar '28, which is expected to improve profitability.
- Starz Entertainment Corp (STRZ) has a strong balance sheet with a reduction in net debt and no borrowings under its revolving credit facility, positioning it well for future growth.
- The company experienced a sequential decline in OTT subscribers, primarily due to the underperformance of BMF Season 4, which did not meet expected audience scale.
- Total revenue for the quarter was down 2% sequentially and 7.4% year over year, impacted by lower OTT subscriber additions and continued pressure on linear revenue.
- Adjusted OIBDA was significantly down from the previous quarter, primarily due to higher content amortization costs related to new series premieres.
- Starz Entertainment Corp (STRZ) anticipates an increase in leverage to approximately 3.5 times in the September quarter due to timing related to content payments.
- The company faces challenges in maintaining subscriber growth amidst a competitive media landscape, with some series not performing as expected, impacting overall subscriber additions.
Good day, everyone and welcome to the Starz second quarter 2025 earnings call. (Operator Instructions) Please note this conference is being recorded.
Now it's my pleasure to turn the call over to Nilay Shah with Starz Investor Relations. Please go ahead.
Good afternoon. Thank you for joining us for Starz Entertainment's fiscal 2025 second quarter earnings call. We'll begin with opening remarks from our President and CEO, Jeffrey Hirsch followed by remarks from our CFO, Scott Macdonald. Also joining us on the call today is Alison Hoffman, President of Starz Networks. After our opening remarks, we'll open the call for questions.
The matters discussed on the call include forward-looking statements, including those regarding expected future performance. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors
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