Starz Restores Cash Generation After a Restructuring Quarter

The Tip Desk · October 29, 2026 · 3 min read

Unlevered free cash flow was $18.8 million in the third quarter, and the company reiterated 2026 targets including $100 million to $120 million of unlevered free cash flow.

Starz Entertainment Corp. (STRZ) reported third-quarter revenue of $322.4 million, up from $307.9 million in the second quarter, and restored positive cash generation after a period of operating cash outflows.

The premium entertainment company said OTT revenue was $226.6 million, compared with $222.8 million a year earlier, while linear and other revenue was $95.8 million. Total revenue therefore grew both sequentially and year-over-year, a mix the company highlighted in its release.

Adjusted OIBDA was $44.2 million, more than double the $21.8 million recorded in the year-ago quarter. Sequentially, the measure declined from $59.9 million in the second quarter and $58.0 million in the first quarter. The company attributed the year-over-year increase to the same period comparison in its headline bullets.

The GAAP operating loss narrowed to $(21.2) million from $(175.5) million in the second quarter, which the company said was due largely to a non-recurring restructuring charge. Restructuring and other swung to an $8.3 million credit in the third quarter from a $151.2 million charge in the second quarter. That credit included an $11.1 million reduction in previously accrued film contract-termination fees after the company updated its estimate of the termination liability, and a $3.6 million content recovery tied to revised license-fee assumptions.

Programming amortization was $141.5 million, down from $156.8 million a year earlier. Other operating expenses were $37.5 million, advertising and marketing $74.2 million, and general and administrative $31.3 million. Depreciation and amortization was $67.4 million.

Net cash provided by operating activities was $18.9 million, reversing a $28.2 million use in the second quarter. Unlevered free cash flow was $18.8 million, versus a $14.7 million outflow in the prior quarter. Equity free cash flow was $13.1 million, versus a $33.4 million outflow. Cash paid for programming content was $174.4 million in the quarter.

Cash and cash equivalents rose to $86.8 million from $59.6 million at June 30. Total debt increased to $687.5 million, including a $362.4 million Term Loan A facility versus $300.0 million previously, and $325.1 million of senior unsecured notes. Net corporate debt was $600.7 million. The $183.0 million revolving credit facility remained fully undrawn.

Trailing-twelve-month Adjusted OIBDA leverage improved to 2.8x from 2.9x at June 30. Trailing-twelve-month Adjusted OIBDA was $217.6 million.

The company reiterated all 2026 targets after having raised the Adjusted OIBDA and unlevered free cash flow outlooks in the second-quarter release. Those 2026 targets include positive year-over-year OTT revenue growth, mid-single-digit Adjusted OIBDA growth, unlevered free cash flow of $100 million to $120 million, and an Adjusted OIBDA leverage ratio exiting 2026 of approximately 2.7x. It also reiterated a 20% Adjusted OIBDA margin outlook for the second half of 2027.

President and CEO Jeffrey Hirsch said the results reflected continued strength and execution against four key financial priorities, and that the company remained confident in its outlook.