What Starz Entertainment (STRZ) Said on Its Q3 Earnings Call

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Key Points

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• Q3 revenue reached $322 million, led by OTT revenue of $227 million, while adjusted OIBDA rose to $44 million. Starz generated $19 million in unlevered free cash flow and reaffirmed its 2026 outlook for mid-single-digit OIBDA growth and $100 million–$120 million in unlevered free cash flow.

• Starz is emphasizing owned programming to increase distribution and international revenue, expecting to own roughly half its content slate in 2027. Upcoming priorities include the final season of P-Valley, the development of a second season of Fightland, and the 2027 launch of Power: Origins.

• The company reported improving subscriber economics, including historically low churn, higher average revenue per user and stronger retention from bundles. Starz also reduced financing costs through a refinancing, while targeting year-end 2026 leverage of approximately 2.7 times.

Starz Entertainment (NASDAQ:STRZ) reported third-quarter revenue growth and reiterated its full-year outlook, citing higher over-the-top revenue, distribution gains from owned programming and continued progress on free cash flow and leverage reduction.

Total third-quarter revenue was $322 million, the company’s strongest quarter of 2026 OTT revenue reached $227 million, up 1.7% from a year earlier and 2.4% sequentially. On a pro forma basis excluding the effect of Starz’s shift in Canada to a content-licensing arrangement in late 2025, OTT revenue would have risen 3.2% year over year

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Macdonald said OTT growth reflected annual subscribers renewing at higher promotional prices as well as the continuing benefit of an April price increase. Linear and other revenue was $96 million, with ongoing pressure on traditional video households partly offset by increased distribution revenue tied to Starz’s strategy of owning more programming.

Profitability and Cash Flow

Adjusted OIBDA totaled $44 million during the quarter, coming in ahead of the company’s expectations and rising significantly from the prior year. Starz said its third-quarter outperformance allowed it to move part of its planned marketing investment into the fourth quarter to support the return of P-Valley.

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Unlevered free cash flow was positive $19 million in the quarter and $85 million through the first nine months of 2026. Equity free cash flow was positive $13 million for the quarter and $48 million year to date.