Starz missed Wall Street expectations as the company posted a wider-than-expected loss of $52.6 million and revenue tumbled 8% to $320.9 million in its third quarter of 2025.
The company shed 130,000 U.S. subscribers for a total of 17.5 million, driven primarily by continued pressure on linear subscribers due to cord-cutting. Linear subscribers fell by 24o,000 to 5.17 million. Meanwhile, streaming was a bright spot as Starz added 110,000 U.S. over-the-top subscribers for a total of 12.3 million.
When including Canada, total North American subscribers grew 120,000 to 19.2 million. Canadian subscribers grew 250,000 to 1.74 million due to the resolution of a carriage dispute, which resulted in a reinstatement of linear subscribers that were previously removed. Linear subscribers totaled 1.06 million, an increase of 979,000 from the previous quarter, while OTT subscribers were flat at 68,000.
OTT revenue for the quarter came in at $222.8 million, up from 232.2 million in the year ago period, while linear and other revenue fell to $98.1 million, from $114.7 million a year ago.
Here are the results:
Net loss: $52.6 million, compared to a loss of $30.6 million a year ago.
Earnings per share: A loss of $3.15 per share, compared to a loss of $1.81 per share expected by analysts surveyed by Yahoo Finance.
Revenue: $320.9 million, compared to $321.35 million expected by analysts surveyed by Yahoo Finance.
OTT engagement hit a 12-month high, which was attributed to the performance of “Outlander: Blood of my Blood.” Also boosting the results was the premiere of “Ballerina.” Upcoming releases include Season 3 of “Power: Force,” and “Spartacus: House of Ashur” in the fourth quarter of 2025 and the final season of “Outlander,” “Power Book III: Raising Kanan,” the premiere of “Fightland,” “Blood of My Blood” Season 2 and a new season of “P-Valley.”
Looking ahead, Starz expects continued U.S. OTT subscriber growth in the fourth quarter and will finish 2025 with approximately $200 million in adjusted operating income. It also remains focused on converting 70% of its adjusted operating income to free cash flow and delevering to 2.5 times as quickly as possible.
“Starz continues to execute well in a rapidly changing operating environment,” CEO Jeff Hirsch told analysts during the company’s third quarter earnings call on Thursday. “While the media industry continues to face significant headwinds, we are confident in our ability to deliver on our plan, and we are well-positioned to take advantage of the structural changes we expect to take place in the sector over the next 12-24 months.”
Executives said Starz’s investment in content would decrease year over year to help drive improved free cash flow, with cash content spend expected to be just under $700 million in 2026 and drop to $600 million to $650 million in the next few years. Hirsch also said that Starz has room to grow its subscriber base without implementing price increases.
Starz restructures Canada business, strikes co-commissioning deal on “Fightland”
During the earnings call, Hirsch said the company would undergo a restructuring in Canada that would see it move from a joint venture model to a content licensing agreement with Bell Canada.
The new structure will see Starz-branded service continue to be available in the country, with Starz generating international licensing revenue, while Bell will assume full operational responsibility in the territory.
“This approach is consistent with our strategy of owning our content and creating incremental licensing revenue without the need to operate international services directly,” Hirsch said.
As part of its goal to own half of its content slate following its separation from Lionsgate, Starz opened several writers’ rooms and greenly its first owned original “Fightland” from Curtis “50 Cent” Jackson, which is now in production in London.
Starz is also in the late stages of bringing on a co-commission partner on “Fightland,” which will improve its economics by lowering the per-episode cost and add incremental international revenue, with the potential to expand to additional Starz-owned originals..
Hirsch said the Bell and “Fightland” deals would be “modestly accretive” to adjusted operating income and free cash flow in 2026 and assist the company in its goal to reach 20% margins by the end of 2028.
Capitalizing on consolidation with M&A
In addition, Starz is looking to build upon its core demographics of women and underrepresented audiences through M&A.
“With a potential for increased consolidation across the media landscape, we believe that we are uniquely positioned to capitalize on potential M&A opportunities,” Hirsch said. “Given our track record of profitably converting our business from linear to digital and our industry leading tech stack, we are poised to increase our scale as assets that are strategically valuable to Starz become available.”
Hirsch declined to comment on specific assets that the company would look at, but reiterated that the company is interested in partnering with networks “marooned on the linear side” that it can help transition to digital. Roughly 70% of Starz’s revenue comes from the digital side of its business.
“We can use our tech platform to reposition those brands into the digital world that are very complementary to the Starz content on the SVOD world. And as we’ve seen in a lot of work we’ve done, as you put complementary AVOD businesses next to the SVOD business, the churn reduction on the Starz side is really meaningful and really can accelerate both subscriber and revenue growth on scale,” Hirsch said. “So we’re super interested in looking at that.”
He added that Starz would not do any deal that puts an “incredible amount of leverage” on the business. The company ended the quarter with net debt of $588.1 million and leverage of 3.4 times on a trailing twelve-month basis.
“If it’s a deal that allows us to stay within the the leverage range that we have, it sits with us strategically in terms of our two core demos, and we believe that we can actually convert the business from linear to digital, we think that’s a home run deal for us,” he said.
