Starz Reports $164.9M Q1 Loss, Revenue Declines 7% Amid Streaming and Linear Challenges

Starz reported revenue of $306.9 million on a net loss of $164.9 million, or 9.83 per share.

Wall Street had expected revenue of $305.7 million on a loss of 81 cents per share, according to Yahoo Finance.

The quarterly results coincide with the premium cable network and streamer celebrating its one-year anniversary since the Lionsgate separation.

Q1 Financial Performance: Losses Widen, Revenue Declines

Starz posted a net loss of $164.9 million in the first quarter, a 7% increase from a loss of $153 million in the same period last year.

Total revenue declined 7% year over year to $306.9 million, driven by:

• A 5.5% year-over-year drop in streaming revenue to $211.1 million.
• A 6.8% year-over-year decline in linear and other revenue to $95.8 million.

The Starz Networks segment saw operating income fall 37.8% to $58 million, while the company’s total operating loss widened 7% to $152.8 million.

Key Business Adjustments

The quarter’s results reflected Starz’s restructuring of its Canada business into a licensing revenue stream. Additionally, the company has discontinued quarterly subscriber disclosures, aligning with industry leaders such as Netflix, Disney, and Warner Bros. Discovery.

Starz last disclosed a total of 12.7 million over-the-top subscribers and 5 million linear TV subscribers.

Leadership Perspective: Strategic Progress and Future Outlook

“As we mark the one-year anniversary of our separation today, I’m proud to report that Starz is a structurally stronger company than when we separated. Over the past year, we have executed with discipline against our strategic and financial priorities to position the company for long-term value creation. Given our progress and one of our strongest content lineups we’ve had in years, we are increasingly confident in our ability to drive OTT revenue growth, reduce leverage, expand margins, and generate sustainable free cash flow in the years ahead.”

Jeff Hirsch, CEO of Starz

2024 Guidance and Long-Term Expectations

Looking ahead, Starz maintained its guidance of:

• Positive year-over-year streaming revenue growth.
• Low single-digit adjusted operating income growth.
• Unlevered free cash flow between $80 million and $120 million.
• A leverage ratio exiting 2026 of approximately 2.7 times.