Starz 2025 Q4 Earnings Misses Targets as Net Income Falls 68.1%

Starz (STRZ) reported its fiscal 2025 Q4 earnings on Jun 26th, 2025. The results fell short of expectations as the company reported a significant decline in net income, down 68.1% compared to the previous year. The guidance for fiscal 2025 remains in line with previous forecasts, projecting approximately $200 million in Adjusted OIBDA. Despite these challenges, Starz continues to emphasize its restructuring initiatives and strategic content realignment to enhance future performance.

Revenue

Earnings/Net Income

Starz's EPS declined 77.9% to $0.14 in 2025 Q4 from $0.63 in 2024 Q4. Meanwhile, the company's net income declined to $48.30 million in 2025 Q4, down 68.1% from $151.60 million reported in 2024 Q4. The decline in EPS highlights a challenging quarter for Starz.

Post-Earnings Price Action Review

The post-earnings strategy of buying STRZ when revenues miss and holding for 30 days has historically yielded robust returns. This approach delivered an impressive overall return of 39.43% and an exceptional compound annual growth rate (CAGR) of 1165.46%. Despite encountering a maximum drawdown of -29.23%, the strategy maintained a commendable Sharpe ratio of 10.56, reflecting strong risk-adjusted returns. Furthermore, the strategy achieved a significant excess return of 33.64% compared to the benchmark, underscoring its effectiveness in capitalizing on market opportunities. Investors have found this approach to be a valuable tool for navigating the company's financial landscape, highlighting the potential for enhanced returns through strategic timing and market analysis.

CEO Commentary

Jeffrey Hirsch, President and CEO of STARZ, expressed satisfaction with the company's robust operating and financial results, highlighting strong U.S. OTT subscriber growth, which increased by 530,000 in the quarter. He acknowledged challenges from a "strike-impacted slate," yet remained optimistic about delivering over $200 million of Adjusted OIBDA for fiscal year 2025. Hirsch emphasized that the restructuring initiative, primarily targeting content portfolio reassessment, is integral to aligning operations as an independent public company. He reinforced confidence in STARZ's financial trajectory and its positioning as a leading entertainment destination for underrepresented audiences.

Guidance

STARZ forecasts approximately $200 million in Adjusted OIBDA for calendar year 2025. The company will not report earnings per share (EPS) for the fourth quarter but plans to initiate EPS reporting beginning with the quarter ending June 30, 2025. Following its separation from Lionsgate, STARZ has adjusted its fiscal year end from March 31 to December 31, aiming to enhance operational focus and strategic direction amid evolving market conditions.

Additional News

Starz has recently completed its separation from Lionsgate, marking a significant milestone as it becomes a standalone public entity. Trading under the ticker symbol STRZ on the Nasdaq, Starz is now focused on leveraging its digital footprint, which accounts for approximately 70% of its revenue. The company aims to enhance its growth through new bundling and distribution partnerships. This strategic move is expected to unlock substantial value while positioning Starz as a leading premium entertainment destination for women and underrepresented audiences. Additionally, Starz has maintained a strong balance sheet, setting the stage for potential mergers and acquisitions in the evolving media landscape.