Starz Entertainment Corp. reported third‑quarter 2025 results that highlighted a widening net loss and a modest revenue miss, while U.S. over‑the‑top (OTT) subscriber growth continued to outpace declines in linear service subscribers. Revenue for the quarter was $320.9 million, falling $0.4 million (0.1%) short of the $321.35 million consensus estimate and 1.5% lower than the $326.4 million earned in Q3 2024. The company’s net loss per share was $3.15, a $2.69 increase from the $0.54 loss reported in the same quarter last year and a $2.69 swing from the $-0.46 consensus estimate.
The revenue shortfall was driven primarily by a 1.2% decline in linear subscription revenue, which fell to $112.3 million from $114.5 million in Q3 2024. In contrast, OTT revenue grew 3.4% to $208.7 million, supported by a 110,000‑unit sequential increase in U.S. OTT subscribers. The mix shift toward higher‑margin OTT content partially offset the linear decline, but the overall revenue dip reflects continued pressure on legacy pay‑TV services.
The EPS miss was largely attributable to higher content‑acquisition costs and a one‑time restructuring charge of $0.45 million, which were not fully offset by the cost‑control measures that had previously narrowed the loss. Management noted that the company’s investment in original programming is expected to generate incremental revenue in the coming quarters, but the current quarter’s loss underscores the need for continued cost discipline.
Subscriber dynamics further illustrate the company’s strategic pivot. U.S. OTT subscribers increased by 110,000 units sequentially and 670,000 year‑over‑year, while total U.S. subscribers fell by 130,000 units due to the linear decline. CEO Jeffrey Hirsch emphasized that the “strong slate of originals” will help convert OTT growth into long‑term profitability, but he also acknowledged that the linear subscriber base remains a headwind.
Financially, Starz reported a net debt of $588.1 million and an adjusted OIBDA leverage ratio of 3.4x, unchanged from the prior quarter. The company reiterated its 2025 outlook, maintaining guidance for full‑year revenue of $4.14 billion to $4.15 billion and adjusted operating income of $2.15 billion to $2.16 billion. The guidance reflects confidence in the company’s content strategy while recognizing the need to manage the cost base.
Market reaction to the earnings was muted, with the stock remaining flat in the days following the announcement. Analysts noted that the earnings miss, particularly the widened net loss, tempered enthusiasm for the company’s growth narrative, even as the OTT subscriber gains were viewed positively.
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