STARZ Entertainment Corp (NASDAQ: STRZ), newly spun off from Lionsgate as of May 6, reported robust Q4 and fiscal year 2025 results following its first full quarter as an independent company.

Subscriber Momentum and Strategic Shift

• U.S. Over-the-Top (OTT) adds: 530,000 net new customers in Q4, lifting the total to 12.3 million
• Total U.S. subscribers: Reached 18.0 million (+320,000 sequentially), fueled by the premiere of Power Book III: Raising Kanan Season 4
• North America subscriber base: Dropped slightly to 19.6 million, attributed to a Canadian carriage dispute—a shift management downplayed given the low revenue impact from those linear subscribers

Executives emphasized that OTT gains remain the strategic priority, with direct streaming revenue now outpacing legacy linear channels.

Financials and Profit Levers

• Q4 total revenue: $330.6 million
• Operating loss: $136.3 million
• Adjusted OIBDA: $93.3 million—more than double the prior-year period
• Annual adjusted OIBDA: $201.5 million—hitting the company’s stated goal for FY2025

Much of the sequential improvement came from reduced programming amortization and tighter marketing spend, thanks in part to content calendar shifts and more efficient direct-to-consumer advertising.

Standalone Cost Discipline and Content Ownership

CEO Jeffrey Hirsch noted the business has made a full pivot: “70% of our revenue is digital,” a sharp contrast to STARZ’s linear roots.

He detailed the company’s $177 million restructuring charge in Q4, reflecting a right-sized content pipeline and restructured operations designed to support long-term profitability as a standalone entity.

Writers’ rooms are now open on several STARZ-owned IP projects. The company aims to own 50% of its slate by calendar year 2027—giving it greater control over margins and licensing opportunities.

Outlook: Growth, Deleveraging, and Margin Expansion

• Revenue may trend down year-over-year in FY2025 due to a slower original content slate (impacted by strike delays) and continued erosion of linear subscriber revenue.
• However, management forecasts sequential growth in the back half of the year as new titles launch and audience engagement rebounds.
• Net debt sits at $615.5 million with leverage at 3.1×. The separation included new financing facilities, and deleveraging is expected beyond FY2026.

INSIDER TAKE

STARZ’s performance offers a blueprint for subscription companies navigating platform separation, channel shifts, or operational resets. In the face of declining linear revenue and industry-wide belt tightening, STARZ is showing how focused investment in owned IP, OTT-first distribution, and disciplined cost management can yield real operating leverage.

Subscriber growth—particularly on the direct-to-consumer side—suggests strong retention and acquisition mechanics are in place. And while many streaming and digital subscription businesses struggle with margin pressure, STARZ just posted a quarter where adjusted profit more than doubled, even with fewer original releases.

For subscription operators outside media, this underscores a core lesson: recurring revenue businesses thrive when they can reduce third-party dependency (whether content, platforms, or distribution), align cost structures with usage, and keep direct relationships with high-value customers. STARZ, now fully standing on its own, is building that model in real time.