Starz Entertainment Corp. (NASDAQ:STRZ) reported second-quarter results on Friday that fell short of revenue expectations, although the media company increased its full-year guidance for adjusted operating profit and free cash flow.
Shares were little changed in pre-market trading, edging slightly lower following the announcement.
Revenue Declines Despite OTT Growth
Starz generated revenue of $307.9 million for the quarter ended 30 June 2026, down from $319.7 million a year earlier and below analysts’ consensus estimate of $882.65 million.
The company reported a loss of $11.27 per share for the quarter.
Its direct-to-consumer streaming business continued to show resilience, with OTT revenue rising marginally to $221.3 million from $221.1 million in the prior-year period.
However, this was offset by continued weakness in the traditional television business, with linear and other revenue declining to $86.6 million from $98.6 million.
Company Raises 2026 Guidance
Despite the revenue shortfall, Starz improved its outlook for the remainder of the year.
Management now expects adjusted OIBDA growth to be in the mid-single-digit percentage range, compared with its previous forecast for low-single-digit growth.
The company also raised its outlook for unlevered free cash flow, now expecting results toward the mid-to-upper end of its previously announced range of $80 million to $120 million.
Starz reaffirmed its target of ending 2026 with an adjusted OIBDA leverage ratio of approximately 2.7x.
Content Strategy Drives Audience Engagement
President and Chief Executive Officer Jeffrey Hirsch said, “Our second-quarter results reflect the momentum we are building across the business and the strength of our content portfolio.”
He added, “We delivered another quarter of strong audience engagement and OTT revenue growth, and the success of the ‘Fightland’ premiere validates our ownership strategy.”
Adjusted OIBDA improved significantly to $59.9 million, compared with $33.4 million in the same period last year.
Restructuring Charges Impact Results
The company recorded an operating loss of $175.5 million during the quarter, largely due to a one-off restructuring charge.
This included $147.2 million in contract termination costs linked to the company’s decision to exit certain live-action film commitments under a post pay-one output licensing agreement.
As of 30 June 2026, Starz held cash and cash equivalents of $59.6 million, while total debt stood at $625.1 million, resulting in net debt of $565.5 million.
Starz Entertainment stock price
