Starz Entertainment Corp: Form 10-Q for the period ended Sep 30, 2026
Filed with the SEC on Oct 29, 2026 and accepted by EDGAR at Oct 29, 2026, 16:02 ET.
Management's discussion and analysis
As filed, 61,931 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Overview
Prior to the Separation, as further discussed below, the business of Starz Entertainment Corp. (the "Company", "we", "us" or "our"), substantially consisted of the Starz Business of Old Lionsgate’s Media Networks segment, consisting of (i) Starz Networks, which includes the distribution in the U.S. and Canada of STARZ branded premium subscription video services through over-the-top ("OTT") streaming platforms and distributors, on a direct-to-consumer basis through the Starz App and through wholesale U.S. and Canada multichannel video programming distributors ("MVPDs"), including cable operators, satellite television providers and telecommunications companies (in the aggregate the "Starz Platform"), and (ii) International, which consisted of the OTT distribution of subscription video services outside the U.S. and Canada. In October 2025, Starz changed its operations in Canada resulting in its partner assuming all operational oversight of the service and Starz moving to a content licensing arrangement.
Refer to Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies, for further details regarding the Separation, International Restructuring, and Basis of Presentation of the Company and the accompanying financial statements.
Separation
On May 6, 2025, Lions Gate Entertainment Corp. ("Old Lionsgate") completed the separation of its studio operations (the "LG Studios Business") from its media networks operations (the "Starz Business") pursuant to an arrangement agreement, resulting in two independent publicly traded companies: Lionsgate Studios Corp. ("New Lionsgate"), which now holds the LG Studios Business, and Starz Entertainment Corp., which now holds the Starz Business. As part of the distribution, Old Lionsgate shareholders received shares in both companies, and Starz Entertainment Corp. subsequently executed a 15‑for‑1 reverse stock split, such that every fifteen (15) Starz common shares were consolidated into one Starz common share. For accounting purposes under U.S. GAAP, New Lionsgate is considered the accounting spinnor or divesting entity and Starz is considered the accounting spinnee or divested entity, and the historical results of the Starz Business prior to the transaction have been prepared on a carve‑out basis.
Refer to our Transition Report on Form 10‑KT for the nine months ended December 31, 2025 for a full description of the Separation.
International Restructuring
During 2023, Old Lionsgate began a plan to restructure and shut down its international LIONSGATE+ business, which was finalized with the shutdown of the United Kingdom territory in May 2024. Refer to our Transition Report on Form 10‑KT for the nine months ended December 31, 2025, Note 19, Discontinued Operations, for a full description of the international restructuring. The international restructuring is included in discontinued operations in the accompanying financial statements.
Starz Networks Strategic Content Review
During the three and nine months ended September 30, 2026, Starz continued actions initiated in 2025 to rationalize its content portfolio as part of its ongoing efforts to right-size its content cost structure in response to the evolving macroeconomic and industry environment, including continued declines in traditional linear services and operating as a standalone company following the Separation. These actions included evaluating programming on the Starz Platform, terminating certain previously ordered programming, and removing and abandoning content determined to have limited strategic value.
Change in Fiscal Year End
On May 8, 2025, the Company's Board of Directors approved a change in Starz’s fiscal year end from March 31 to December 31. As a result of the change, the Company filed a Transition Report on Form 10-KT for the nine-month transition period from April 1, 2025 to December 31, 2025.
Generally Accepted Accounting Principles
These financial statements have been prepared in accordance with U.S. GAAP.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates made by management in the preparation of the accompanying financial statements relate to the intangible asset associated with the customer relationships with U.S. MVPDs ("Starz Traditional Affiliates"), which is amortized in the proportion that current period revenue bears to management’s estimate of future revenue over the remaining estimated useful life of the asset; estimates of future viewership used for the amortization of programming content; the estimated contract termination liability associated with the termination of certain live-action films under a post-pay-one output licensing arrangement, including assumptions regarding expected theatrical box office performance, timing of payments and discount rates; income taxes including the assessment of valuation allowances for deferred tax assets; and impairment assessments for licensed program rights and intangible assets. Actual results could differ from such estimates.
Segments
Following the Separation, Starz manages and reports its operating results through one reportable segment, Starz Networks, which includes our consolidated operations. During the nine months ended September 30, 2025, International included our operations in India and Southeast Asia. Effective April 1, 2025, we transferred our operations in India and Southeast Asia to New Lionsgate. Given that Starz and New Lionsgate were under common control at the time of the transfer, no gain or loss was recorded related to the transfer.
Relationship with New Lionsgate
Certain functions that Old Lionsgate provided to Starz prior to the completion of the Separation continue to be provided to us by New Lionsgate under a Transition Services Agreement, while other functions previously provided by Old Lionsgate are now performed using our own resources or third-party service providers. Additionally, under our original series programming license agreements, multiyear theatrical film output licensing agreements and library programming agreements with Old Lionsgate, we continue to distribute New Lionsgate programming. We have incurred certain costs in establishing ourselves as a standalone public company, as well as ongoing additional costs associated with operating as an independent, publicly traded company. See "Components of Results of Operations" below for more information.
Components of Results of Operations
Revenue
We earn our revenue from the distribution of the STARZ branded premium subscription video services through OTT streaming platforms and distributors, on a direct-to-consumer basis through the Starz App and through MVPDs, including cable operators, satellite television providers and telecommunications companies.
Pursuant to our distribution agreements, revenue is primarily generated from fees from subscribers who receive the Company's services or based on other factors (variable fee arrangements), or to a lesser extent, may be based on a monthly fixed fee or minimum guarantee, subject to nominal annual escalations.
The variable distribution fee arrangements represent sales or usage-based royalties, which are recognized over the period of such sales or usage by our distributor, which is the same period that the content is provided to the distributor. Estimates of revenue generated but not yet reported to us by our distribution partners are made based on an estimated number of subscribers using historical trends and recent reporting. Other fixed fee or minimum guarantee programming revenue is recognized over the contract term based on the continuous delivery of the content to the distributor. Subscribers through the Starz App are billed in advance of the start of their monthly or multi-month membership period and revenue is recognized ratably over each applicable membership period.
In connection with the distribution rights obtained outside of the Starz Platform, we license rights to other parties who distribute our content for a fee. New Lionsgate acts as distributor in certain of these arrangements.
Expenses
Our primary operating expenses include programming amortization, other operating expenses, advertising and marketing expenses, and general and administrative expenses.
Other operating expenses include programming related salaries, residual expenses, development costs, provision for credit losses on accounts receivable, operating costs for the direct-to-consumer service, transponder expenses, maintenance and repairs, and foreign exchange gains and losses.
Residuals represent amounts payable to various unions or "guilds" such as the Screen Actors Guild - American Federation of Television and Radio Artists, Directors Guild of America, and Writers Guild of America, related to the exhibition or other exploitation of certain owned and licensed content.
Advertising and marketing expenses primarily include the costs of advertising, consumer marketing, distributor marketing support and other marketing costs.
The level of programming amortization and advertising and marketing expenses can fluctuate from period to period depending on the number of original series and first-run output theatrical movies premiering on the network during the period. Programming cost amortization and advertising and marketing expenses generally increase in periods with increased original series and first-run theatrical movie premieres and decrease in periods with fewer original series and first-run theatrical movie premieres.
General and administrative expenses include salaries and other overhead. Prior to the Separation, Old Lionsgate and Legacy Lionsgate Studios entered into a shared services and overhead sharing agreement (the "Shared Services Agreement"). The Shared Services Agreement allocated to the LG Studios Business all of corporate general and administrative expenses of Old Lionsgate, except for an amount of $10.0 million that was charged annually to the Company until the Separation.
Now that the Separation is complete, we are incurring expenses for, among other things, directors’ and officers’ and other insurance, director fees and internal and external accounting, legal and administrative resources and fees.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We describe our significant accounting policies in Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies, to the Company's Financial Statements included in our Form 10-KT. There have been no significant changes in our significant accounting policies since December 31, 2025.
We describe our significant accounting estimates in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-KT. There have been no significant changes in our significant accounting estimates since December 31, 2025.
Recent Accounting Pronouncements
Refer to Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies, for a discussion of recent accounting guidance.
RESULTS OF OPERATIONS
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Consolidated Results of Operations
The following table sets forth our consolidated results of operations for the three months ended September 30, 2026 and September 30, 2025.
(Amounts in millions)
| Revenue | Three Months Ended September 30, 2026 | 2025 | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|
| OTT revenue | $226.6 | $222.8 | $3.8 | 1.7% |
| Linear and other revenue | 95.8 | 98.1 | (2.3) | (2.3)% |
| Total revenue | 322.4 | 320.9 | 1.5 | 0.5% |
| Expenses: | ||||
| Programming amortization | 141.5 | 156.8 | (15.3) | (9.8)% |
| Other operating | 37.5 | 38.8 | (1.3) | (3.4)% |
| Advertising and marketing | 74.2 | 78.4 | (4.2) | (5.4)% |
| General and administrative | 31.3 | 28.8 | 2.5 | 8.7% |
| Depreciation and amortization | 67.4 | 47.9 | 19.5 | 40.7% |
| Restructuring and other | (8.3) | 5.0 | (13.3) | (266.0)% |
| Total expenses | 343.6 | 355.7 | (12.1) | (3.4)% |
| Operating loss | (21.2) | (34.8) | 13.6 | (39.1)% |
| Interest expense | (14.0) | (15.8) | 1.8 | (11.4)% |
| Interest and other income | 0.1 | 0.2 | (0.1) | nm |
| Other expense | (1.4) | (1.8) | 0.4 | (22.2)% |
| Loss from continuing operations | (36.5) | (52.2) | 15.7 | (30.1)% |
| Income tax benefit (expense) | 1.7 | (0.4) | 2.1 | nm |
| Net loss | $(34.8) | $(52.6) | $17.8 | (33.8)% |
nm – Not meaningful.
Revenue. Consolidated revenue increased $1.5 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily driven by higher OTT revenue resulting from subscription price increases and higher distribution and other revenue related to international ancillary market sales of Fightland Season 1 and the transition of our Canadian operations to a content licensing relationship. These increases were partially offset by lower linear revenue resulting from the continued decline in traditional linear households.
During the three months ended September 30, 2026 and the three months ended September 30, 2025, the following original series premiered on STARZ:
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | ||
|---|---|---|---|
| Title | Premiere Date | Title | Premiere Date |
| Fightland Season 1 | July 31, 2026 | Blood of My Blood Season 1 | August 8, 2025 |
| Blood of My Blood Season 2 | September 25, 2026 | Couple Next Door Season 2 | September 19, 2025 |
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Programming Amortization. The level of programming amortization for Starz Networks can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the network during such period, therefore programming amortization generally increases in periods with more new original series and first-run theatrical movie premieres and decreases in periods with fewer original series and first-run theatrical movie premieres.
(Amounts in millions)
| Programming amortization | Three Months Ended September 30, 2026 Amount | % of Revenue | 2025 Amount | % of Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Starz Networks | $141.5 | 43.9% | $156.8 | 48.9% | $(15.3) | (9.8)% |
During the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, programming amortization expense decreased primarily due to fewer premieres of output titles as a result of the termination of certain live-action films under a post-pay-one output licensing agreement entered into in April 2026. The decrease was partially offset by higher development expenses and increased distribution amortization related to international ancillary market sales of Fightland Season 1.
Other Operating Expenses and Advertising and Marketing Expenses. Other operating expenses include programming and operating related salaries, residual expenses, development costs, credit losses on accounts receivable, and foreign exchange gains and losses. The level of other operating expenses and advertising and marketing costs can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the Starz Platform during such period. Advertising and marketing costs generally increase in periods with increased original series and first-run theatrical movie premieres and decrease in periods with fewer original series and first-run movie premieres.
Other Operating Expenses. Other operating expenses and share-based compensation expense were as follows for the three months ended September 30, 2026 and September 30, 2025:
(Amounts in millions)
| Other operating expenses | Three Months Ended September 30, 2026 Amount | % of Revenue | 2025 Amount | % of Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Starz Networks | $36.2 | 11.2% | $38.1 | 11.9% | $(1.9) | (5.0)% |
| Share-based compensation expense | 1.3 | 0.4% | 0.7 | 0.2% | 0.6 | 85.7% |
| $37.5 | 11.6% | $38.8 | 12.1% | $(1.3) | (3.4)% |
Starz Networks other operating expenses decreased $1.3 million during the three months ended September 30, 2026 primarily due to a reduction in legal expenses. The increase in share-based compensation expense was driven by a higher STRZ share price during the quarter, which increased the value of certain equity awards and the related compensation expense recognized.
Advertising and Marketing Expenses. Advertising and marketing expenses were as follows for the three months ended September 30, 2026 and September 30, 2025:
(Amounts in millions)
| Advertising and marketing expenses | Three Months Ended September 30, 2026 Amount | % of Revenue | 2025 Amount | % of Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Starz Networks | $74.2 | 23.0% | $78.4 | 24.4% | $(4.2) | (5.4)% |
Advertising and marketing expenses decreased during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to overall lower direct-to-consumer marketing spend, partially offset by an increase in media spend related to the timing of premieres.
General and Administrative Expenses. General and administrative expenses and share-based compensation expense were as follows for the three months ended September 30, 2026 and September 30, 2025:
(Amounts in millions)
| General and administrative expenses | Three Months Ended September 30, 2026 Amount | % of Revenue | 2025 Amount | % of Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Starz Networks | $26.3 | 8.2% | $25.8 | 8.0% | $0.5 | 1.9% |
| Share-based compensation expense | 5.0 | 1.6% | 3.0 | 0.9% | 2.0 | 66.7% |
| $31.3 | 9.7% | $28.8 | 9.0% | $2.5 | 8.7% |
During the three months ended September 30, 2026, general and administrative expenses increased $2.5 million as compared to the three months ended September 30, 2025, primarily due to an increase in share-based compensation expense, driven by a higher STRZ share price during the quarter compared to the prior year quarter, which increased the value of certain equity awards and the related compensation expense recognized.
The following table presents share-based compensation expense by financial statement line item:
(Amounts in millions)
| Share-based compensation expense included in: | Three Months Ended September 30, 2026 | 2025 |
|---|---|---|
| Operating expense | $1.3 | $0.7 |
| General and administrative | 5.0 | 3.0 |
| Restructuring and other | 0.8 | 0.2 |
| $7.1 | $3.9 |
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Depreciation and Amortization Expense. Depreciation and amortization expense were as follows for the three months ended September 30, 2026 and September 30, 2025:
(Amounts in millions)
| Depreciation and amortization expenses | Three Months Ended September 30, 2026 Amount | % of Revenue | 2025 Amount | % of Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Depreciation | $5.7 | 1.8% | $5.1 | 1.6% | $0.6 | 11.8% |
| Amortization | 61.7 | 19.1% | 42.8 | 13.3% | 18.9 | 44.2% |
| $67.4 | 20.9% | $47.9 | 14.9% | $19.5 | 40.7% |
Depreciation and amortization of $67.4 million for the three months ended September 30, 2026 increased $19.5 million from $47.9 million during the three months ended September 30, 2025, due primarily to our Starz Traditional Affiliate customer relationship finite-lived intangible asset, which is amortized based on estimated total revenue expected to be generated from the underlying affiliation agreements over its remaining useful life. During the three months ended March 31, 2026, the Company reduced the life of the Starz Traditional Affiliate customer relationship finite-lived intangible asset from 14 years to 12 years, based on the continued decline in linear revenue resulting in higher amortization expense during the three months ended September 30, 2026.
Restructuring and Other. Restructuring and other decreased $13.3 million during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, and includes restructuring costs, certain transaction-related and other expenses, and unusual charges or benefits, as applicable. The decrease was primarily driven by a reduction in estimated contract termination fees recorded during the three months ended September 30, 2026 resulting from updated assumptions underlying the termination liability, partially offset by severance costs associated with workforce reduction initiatives. Refer to Note 8, Restructuring and other, for further details.
(Amounts in millions)
| Restructuring and other | Three Months Ended September 30, 2026 | 2025 |
|---|---|---|
| Contract termination fees(1) | $(11.1) | $— |
| Content recoveries(2) | (3.6) | — |
| Transaction and other costs(3) | 1.2 | 4.8 |
| Severance(4) | 4.4 | — |
| Share-based compensation(5) | 0.8 | 0.2 |
| $(8.3) | $5.0 |
(1) In April 2026, Starz entered into an agreement to terminate certain live-action films under a post-pay-one output licensing agreement. As a result, Starz recognized programming contract termination fees, which were recorded within Restructuring and other costs during the three months ended September 30, 2026.
During the three months ended September 30, 2026, the Company recorded a reduction to the contract termination liability as a result of changes in estimated termination fees based on updated assumptions, including the expected theatrical box office performance of certain underlying films. The resulting reduction in the estimated liability was recorded within Restructuring and other costs during the period.
(2) During the three months ended September 30, 2026 and September 30, 2025, Starz undertook actions to rationalize its content portfolio as part of its ongoing efforts to right-size its content cost structure in response to the evolving macroeconomic and industry environment, including continued declines in traditional linear services and operating as a standalone company following the Separation. These actions included evaluating programming on the Starz Platform, cancelling certain previously ordered programming, and removing and abandoning content determined to have limited strategic value.
Content recoveries during the three months ended September 30, 2026 primarily relate to revisions of estimated license fees for certain programming agreements. As a result of updated assumptions and estimated contractual costs, the Company reduced previously recorded programming liabilities and recognized a recovery during the period.
(3) Transaction and other costs during the three months ended September 30, 2026 and September 30, 2025 reflect costs associated with certain potential strategic transactions, costs associated with certain legal matters, and transaction, integration, and legal costs associated with the Separation.
(4) Severance costs for the three months ended September 30, 2026, represent workforce reductions due to cost-saving initiatives and the continued decline in traditional linear services.
(5) Share-based compensation for the three months ended September 30, 2026 includes the acceleration of vesting for certain equity awards. For the three months ended September 30, 2025, share-based compensation includes a modification of equity awards in connection with the separation from Lionsgate. In June 2025, the compensation committee of the Company approved a cash settlement in lieu of share issuance for the restricted share units that vested in July and August 2025.
Interest Expense. Interest expense of $14.0 million during the three months ended September 30, 2026 decreased $1.8 million from the three months ended September 30, 2025 primarily due to the paydown of our programming notes in August 2026.
Interest and Other Income. Interest and other income of $0.1 million for the three months ended September 30, 2026 decreased by $0.1 million compared to interest and other income of $0.2 million for the three months ended September 30, 2025.
Other Expense. Other expense of $1.4 million for the three months ended September 30, 2026 decreased by $0.4 million compared to other expense of $1.8 million for the three months ended September 30, 2025, which primarily represents the loss recorded related to our monetization of accounts receivable program. See Note 13, Additional Financial Information, to our consolidated financial statements for further details.
Income Tax Benefit. We had an income tax benefit of $1.7 million for the three months ended September 30, 2026, compared to income tax expense of $(0.4) million for the three months ended September 30, 2025. Our income tax provision differs from the U.S. federal statutory rate multiplied by pre-tax income (loss) due to the income tax effects of state income taxes, and changes in the valuation allowance against our deferred tax assets.
Net Loss from Continuing Operations. Net loss from continuing operations for the three months ended September 30, 2026 was $34.8 million. This compares to net loss from continuing operations for the three months ended September 30, 2025 of $52.6 million.
RESULTS OF OPERATIONS
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Consolidated Results of Operations
The following table sets forth our consolidated results of operations for the nine months ended September 30, 2026 and September 30, 2025.
(Amounts in millions)
| Revenue | Nine Months Ended September 30, 2026 | 2025 | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|
| OTT revenue | $659.0 | $669.4 | $(10.4) | (1.6)% |
| Linear and other revenue | 278.2 | 301.8 | (23.6) | (7.8)% |
| Total revenue | 937.2 | 971.2 | (34.0) | (3.5)% |
| Expenses: | ||||
| Programming amortization | 393.9 | 437.7 | (43.8) | (10.0)% |
| Other operating | 112.3 | 114.0 | (1.7) | (1.5)% |
| Advertising and marketing | 194.9 | 200.7 | (5.8) | (2.9)% |
| General and administrative | 100.4 | 83.3 | 17.1 | 20.5% |
| Depreciation and amortization | 203.2 | 144.7 | 58.5 | 40.4% |
| Restructuring and other | 282.0 | 194.8 | 87.2 | 44.8% |
| Total expenses | 1,286.7 | 1,175.2 | 111.5 | 9.5% |
| Operating loss | (349.5) | (204.0) | (145.5) | 71.3% |
| Interest expense | (41.5) | (39.9) | (1.6) | 4.0% |
| Interest and other income | 1.0 | 1.9 | (0.9) | (47.4)% |
| Other expense | (5.2) | (6.1) | 0.9 | (14.8)% |
| Loss on extinguishment of debt | — | (0.7) | 0.7 | nm |
| Loss from continuing operations | (395.2) | (248.8) | (146.4) | 58.8% |
| Income tax benefit (expense) | 6.1 | (0.3) | 6.4 | nm |
| Net loss | $(389.1) | $(249.1) | $(140.0) | 56.2% |
nm – Not meaningful.
Revenue. Revenue by segment was as follows for the nine months ended September 30, 2026 and September 30, 2025:
(Amounts in millions)
| Revenue | Nine Months Ended September 30, 2026 | 2025 | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|
| Starz Networks | $937.2 | $966.8 | $(29.6) | (3.1)% |
| International | — | 4.4 | (4.4) | nm |
| $937.2 | $971.2 | $(34.0) | (3.5)% |
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Consolidated revenue decreased $34.0 million. The decrease in Starz Networks revenue reflects declines of $36.8 million driven by the continued decline in traditional linear revenue due to lower linear households. In addition, the decrease in Starz Networks revenue includes an $8.4 million decline in OTT services, primarily related to our Canadian operations which we transitioned to a content licensing relationship in the fourth quarter of 2025. The declines in revenue were partially offset by a $15.6 million increase in distribution and other revenue related to international ancillary market sales of Fightland Season 1 and the transition of our Canadian operations to a content licensing relationship.
During the nine months ended September 30, 2026 and the nine months ended September 30, 2025, the following original series premiered on STARZ:
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | ||
|---|---|---|---|
| Title | Premiere Date | Title | Premiere Date |
| First Quarter: | |||
| BMF Documentary Season 2 | January 16, 2026 | Couple Next Door Season 1 | January 17, 2025 |
| The Nowhere Man Season 1 | January 16, 2026 | Power Book III: Raising Kanan Season 4 | March 7, 2025 |
| Outlander Season 8 | March 6, 2026 | ||
| Second Quarter: | |||
| Amadeus Season 1 | May 8, 2026 | Black Mafia Family Season 4 | June 6, 2025 |
| Power Book III: Kanan Season 5 | June 12, 2026 | ||
| The Listeners Season 1 | June 12, 2026 | ||
| Third Quarter: | |||
| Fightland Season 1 | July 31, 2026 | Blood of My Blood Season 1 | August 8, 2025 |
| Blood of My Blood Season 2 | September 25, 2026 | Couple Next Door Season 2 | September 19, 2025 |
Programming Amortization. The level of programming amortization for Starz Networks can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the network during such period. Therefore, programming amortization generally increases in periods where increased new original series and first-run theatrical movies premiere and decreases in periods where fewer original series and first-run theatrical movies premiere.
(Amounts in millions)
| Programming amortization | Nine Months Ended September 30, 2026 Amount | % of Segment Revenue | 2025 Amount | % of Segment Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Starz Networks | $393.9 | $435.4 | 45.0% | $(41.5) | (9.5)% | |
| International | — | 2.3 | 52.3% | (2.3) | nm | |
| $393.9 | 42.0% | $437.7 | 45.1% | $(43.8) | (10.0)% |
During the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, Starz Networks' programming amortization expense decreased primarily due to fewer premieres of output titles as a result of the termination of certain live-action films under a post-pay-one output licensing agreement entered into in April 2026. The decrease was partially offset by the timing, and higher number, of original series airing on the Starz Platform, higher development expenses and increased distribution amortization expense as a result of the release of Fightland Season 1.
Other Operating Expenses and Advertising and Marketing Expenses. Other operating expenses include programming and operating related salaries, residual expenses, development costs, credit losses on accounts receivable, and foreign exchange gains and losses. The level of other operating expenses and advertising and marketing costs can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the Starz Platform during such period. Advertising and marketing costs generally increase in periods with increased original series and first-run theatrical movie premieres and decrease in periods with fewer original series and first-run movie premieres.
Other Operating Expenses. Other operating expenses by segment and share-based compensation expense which is not allocated to our segments were as follows for the nine months ended September 30, 2026 and September 30, 2025:
(Amounts in millions)
| Other operating expenses | Nine Months Ended September 30, 2026 Amount | % of Segment Revenue | 2025 Amount | % of Segment Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Starz Networks | $107.1 | 11.4% | $111.6 | 11.5% | $(4.5) | (4.0)% |
| Share-based compensation expense | 5.2 | 0.6% | 2.4 | 0.2% | 2.8 | 116.7% |
| $112.3 | 12.0% | $114.0 | 11.7% | $(1.7) | (1.5)% |
Starz Networks' other operating expenses decreased by $4.5 million during the nine months ended September 30, 2026, primarily due to a reduction in legal fees and increased capitalization of software development costs. The increase in share-based compensation expense was driven by a higher STRZ share price during the period, which increased the value of certain equity awards and the related compensation expense recognized.
Advertising and Marketing Expenses. Advertising and marketing expenses by segment were as follows for the nine months ended September 30, 2026 and September 30, 2025:
(Amounts in millions)
| Advertising and marketing expenses | Nine Months Ended September 30, 2026 Amount | % of Segment Revenue | 2025 Amount | % of Segment Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Starz Networks | $194.9 | nm | $200.4 | 20.7% | $(5.5) | (2.7)% |
| International | — | nm | 0.3 | 6.8% | (0.3) | nm |
| $194.9 | 20.8% | $200.7 | 20.7% | $(5.8) | (2.9)% |
Starz Networks' advertising and marketing expenses decreased during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to overall lower direct-to-consumer marketing spend, partially offset by an increase in media spend related to the timing of premieres. International declined due to the transfer of our operations in India and Southeast Asia to New Lionsgate effective April 1, 2025.
General and Administrative Expenses. General and administrative expenses by segment and share-based compensation expense which is not allocated to our segments were as follows for the nine months ended September 30, 2026 and 2025:
(Amounts in millions)
| General and administrative expenses | Nine Months Ended September 30, 2026 Amount | % of Segment Revenue | 2025 Amount | % of Segment Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Starz Networks | $79.2 | 8.5% | $72.3 | 7.5% | $6.9 | 9.5% |
| International | — | nm | 0.4 | 9.1% | (0.4) | nm |
| Share-based compensation expense | 21.2 | 2.2% | 10.6 | 1.1% | 10.6 | 100.0% |
| $100.4 | 10.7% | $83.3 | 8.6% | $17.1 | 20.5% |
During the nine months ended September 30, 2026, Starz Networks' general and administrative expenses increased $6.9 million as compared to the nine months ended September 30, 2025, primarily due to an increase in employee-related costs, partially offset by lower corporate overhead allocations previously charged by Old Lionsgate and lower public company-related fees. International declined due to the transfer of our operations in India and Southeast Asia to New Lionsgate effective April 1, 2025. The increase in share-based compensation expense was driven by a higher STRZ share price during the period, which increased the value of certain employee equity awards and the related compensation expense recognized.
The following table presents share-based compensation expense by financial statement line item:
(Amounts in millions)
| Share-based compensation expense included in: | Nine Months Ended September 30, 2026 | 2025 |
|---|---|---|
| Operating expense | $5.2 | $2.4 |
| General and administrative | 21.2 | 10.6 |
| Restructuring and other | 0.9 | 2.6 |
| $27.3 | $15.6 |
Depreciation and Amortization Expense. Depreciation and amortization expense were as follows for the nine months ended September 30, 2026 and September 30, 2025:
(Amounts in millions)
| Depreciation and amortization expenses | Nine Months Ended September 30, 2026 2026 Amount | % of Revenue | 2025 Amount | % of Revenue | Increase (Decrease) Amount | Percent |
|---|---|---|---|---|---|---|
| Depreciation | $16.7 | 1.8% | $15.6 | 1.6% | $1.1 | 7.1% |
| Amortization | 186.5 | 19.9% | 129.1 | 13.3% | 57.4 | 44.5% |
| $203.2 | 21.7% | $144.7 | 14.9% | $58.5 | 40.4% |
Depreciation and amortization of $203.2 million for the nine months ended September 30, 2026 increased $58.5 million from $144.7 million in the nine months ended September 30, 2025, due primarily to our Starz Traditional Affiliate customer relationship finite-lived intangible asset, which is amortized based on estimated total revenue expected to be generated from the underlying affiliation agreements over its remaining useful life. During the three months ended March 31, 2026, the Company reduced the life of the Starz Traditional Affiliate customer relationship finite-lived intangible asset from 14 years to 12 years, based on the continued decline in linear revenue resulting in higher amortization expense during the nine months ended September 30, 2026.
Restructuring and Other. Restructuring and other increased $87.2 million during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, and includes restructuring costs, certain transaction-related and other expenses, and unusual charges or benefits, as applicable. The increase is primarily the result of the rationalization of the content portfolio and the termination of certain live-action films under a post-pay-one output licensing agreement discussed below, partially offset by lower legal and other costs incurred related to transaction-related expenses as compared to the prior year. Refer to Note 8, Restructuring and other, for further details.
(Amounts in millions)
| Restructuring and other | Nine Months Ended September 30, 2026 | 2025 |
|---|---|---|
| Contract termination fees(1) | $136.1 | $— |
| Content impairments(2) | 126.2 | 167.4 |
| Transaction and other costs(3) | 8.0 | 23.3 |
| Severance(4) | 10.8 | 1.5 |
| Share-based compensation(5) | 0.9 | 2.6 |
| $282.0 | $194.8 |
(1) In April 2026, Starz entered into an agreement to terminate certain live-action films under a post-pay-one output licensing agreement. As a result, Starz recognized programming contract termination fees, which were recorded within Restructuring and other costs during the nine months ended September 30, 2026.
(2) During the nine months ended September 30, 2026 and September 30, 2025, Starz undertook actions to rationalize its content portfolio as part of its ongoing efforts to right-size its content cost structure in response to the evolving macroeconomic and industry environment, including continued declines in traditional linear services and operating as a standalone company following the Separation. These actions included evaluating programming on the Starz Platform, cancelling certain previously ordered programming, and removing and abandoning content determined to have limited strategic value.
(3) Transaction and other costs during the nine months ended September 30, 2026 and September 30, 2025 reflect costs associated with certain potential strategic transactions, costs associated with certain legal matters, and transaction, integration, and legal costs associated with the Separation.
(4) Severance costs for the nine months ended September 30, 2026 and September 30, 2025, represent workforce reductions due to cost-saving initiatives and the continued decline in traditional linear services.
(5) Share-based compensation for the nine months ended September 30, 2026 includes the acceleration of vesting for certain equity awards. For the nine months ended September 30, 2025, share-based compensation includes a modification of equity awards in connection with the separation from Lionsgate. In June 2025, the compensation committee of the Company approved a cash settlement in lieu of share issuance for the restricted share units that vested in July and August 2025.
Interest Expense. Interest expense of $41.5 million during the nine months ended September 30, 2026 increased $1.6 million from the nine months ended September 30, 2025 primarily reflecting higher interest expense resulting from increased term loan borrowings.
Interest and Other Income. Interest and other income of $1.0 million during the nine months ended September 30, 2026 decreased by $0.9 million compared to interest and other income of $1.9 million for the nine months ended September 30, 2025, which was related to guarantee fees from Old Lionsgate received during the nine months ended September 30, 2025.
Other Expense. Other expense of $5.2 million during the nine months ended September 30, 2026 decreased by $0.9 million compared to other expense of $6.1 million for the nine months ended September 30, 2025, which primarily represents the loss recorded related to our monetization of accounts receivable program. See Note 13, Additional Financial Information, to our consolidated financial statements for further details.
Income Tax Benefit. We had an income tax benefit of $6.1 million during the nine months ended September 30, 2026, compared to an income tax expense of $0.3 million for the nine months ended September 30, 2025. Our income tax provision differs from the U.S. federal statutory rate multiplied by pre-tax income (loss) due to the income tax effects of state income taxes, and changes in the valuation allowance against our deferred tax assets.
Net Loss from Continuing Operations. Net loss from continuing operations for the nine months ended September 30, 2026 was $389.1 million. This compares to net loss from continuing operations for the nine months ended September 30, 2025 of $249.1 million.
Non-GAAP Financial Measures
Adjusted OIBDA
Adjusted OIBDA is defined as operating income (loss) before depreciation and amortization, adjusted for share-based compensation, restructuring and other costs, and unusual gains or losses, (such as goodwill and intangible asset impairment), when applicable.
- Depreciation and amortization as presented on our consolidated statement of operations.
- Adjusted share-based compensation represents share-based compensation excluding the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements, which are included in restructuring and other expenses, when applicable.
- Restructuring and other includes restructuring costs, certain transaction-related and other expenses, and unusual items, when applicable.
- Goodwill impairment and intangible asset impairment, when applicable.
Overall: This measure is a non-GAAP financial measure as defined in Regulation G promulgated by the SEC and is in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with United States GAAP.
The Company uses this non-GAAP financial measure, among other measures, to evaluate the operating performance of our business. We believe this measure provides useful information to investors regarding our results of operations before non-operating items. Adjusted OIBDA is considered an important measure of the Company’s performance because this measure eliminates amounts that, in management’s opinion, do not necessarily reflect the fundamental performance of the Company’s businesses, are infrequent in occurrence, and in some cases are non-cash expenses.
This non-GAAP financial measure is commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. However, not all companies calculate this measure in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies due to differences in the methods of calculation and excluded items.
A general limitation of this non-GAAP financial measure is that it is not prepared in accordance with U.S. GAAP. This measure should be reviewed in conjunction with the relevant GAAP financial measures and is not presented as an alternative measure of operating loss.
The following table sets forth Adjusted OIBDA by segment:
(Amounts in millions)
| Three Months Ended September 30, 2026 | 2025 | |
|---|---|---|
| Revenue | $322.4 | $320.9 |
| Programming amortization | (141.5) | (156.8) |
| Other operating | (36.2) | (38.1) |
| Advertising and marketing | (74.2) | (78.4) |
| General and administrative | (26.3) | (25.8) |
| Adjusted OIBDA(1) | $44.2 | $21.8 |
(1) Share-based compensation expense excluded from Adjusted OIBDA for the three months ended September 30, 2026 and September 30, 2025 includes $1.3 million and $0.7 million, respectively, in other operating expenses, and $5.0 million and $3.0 million, respectively, in general and administrative expenses. Refer to Note 6, Capital Stock, for further details.
Starz Networks Adjusted OIBDA of $44.2 million for the three months ended September 30, 2026, increased by $22.4 million from the three months ended September 30, 2025. Such increase was primarily due to lower programming amortization and lower advertising and marketing expenses.
(Amounts in millions)
| Nine Months Ended September 30, 2026 Starz Networks | September 30, 2025 Starz Networks | International | Total | |
|---|---|---|---|---|
| Revenue | $937.2 | $966.8 | $4.4 | $971.2 |
| Programming amortization | (393.9) | (435.3) | (2.4) | (437.7) |
| Other operating | (107.1) | (111.5) | — | (111.5) |
| Advertising and marketing | (194.9) | (200.5) | (0.2) | (200.7) |
| General and administrative | (79.2) | (72.2) | (0.6) | (72.8) |
| Adjusted OIBDA(2) | $162.1 | $147.3 | $1.2 | $148.5 |
(2) Share-based compensation expense excluded from Adjusted OIBDA for the nine months ended September 30, 2026 and September 30, 2025 includes $5.2 million and $2.4 million, respectively, in other operating expenses, and $21.2 million and $10.6 million, respectively, in general and administrative expenses. Refer to Note 6, Capital Stock, for further details.
Starz Networks Adjusted OIBDA of $162.1 million for the nine months ended September 30, 2026, increased by $13.6 million from the nine months ended September 30, 2025. Such increase was primarily due to lower programming amortization expense and advertising and marketing expenses, offset by lower revenue and increased general and administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
Sources of Cash
Our liquidity and capital resources for the three and nine months ended September 30, 2026 were provided principally through cash generated from operations, our $183.0 million revolving credit facility, programming related obligations, and the monetization of trade accounts receivable as discussed below.
As of September 30, 2026 and September 30, 2025, we had cash and cash equivalents of $86.8 million and $37.0 million, respectively.
Credit Agreement and Existing Notes
As of September 30, 2026, we had $362.4 million and $325.1 million, respectively, outstanding under our new Term Loan A and 5.5% Senior Notes due 2029. No amounts were outstanding under our $183.0 million revolving credit facility. Refer to Note 3, Debt, for a discussion of our corporate debt.
Programming Related Obligations
We utilize programming related obligations to fund certain of our film and television productions or licenses during production through the time the program airs on the Starz Platform. Our programming related obligations include secured production loans which represent individual loans for the license or production of certain of our original series. As of September 30, 2026, current and non-current programming related obligations include secured production loans with outstanding balances of $40.6 million due in January 2027 and $38.0 million due in May 2028.
Refer to Note 4, Programming Related Obligations, for a discussion of our programming related obligations.
Accounts Receivable Monetization
Our accounts receivable monetization program includes individual agreements to monetize certain of our trade accounts receivable directly with third-party purchasers.
Refer to Note 13, Additional Financial Information, for a discussion of our accounts receivable monetization program.
Uses of Cash
The nature of our business is such that significant initial expenditures are required to acquire, produce, and market our programming content, while revenue from the exhibition of our programming content is earned over an extended period of time after their acquisition. As such, our principal uses of cash include payments for licensing, acquisition, and production of our programming content, advertising and marketing expenditures and general and administrative expenses. We also use cash for debt service (i.e. principal and interest payments) requirements, and capital expenditures.
We may from time to time seek to retire or refinance our outstanding debt through cash purchases, in open market purchases, privately negotiated transactions, refinancings, or otherwise. Such retirements or refinancings, if any, will depend on prevailing market conditions, our liquidity requirements, our assessment of opportunities to lower interest expense, contractual restrictions and other factors, and such retirements or refinancings could result in a gain or loss from the early extinguishment of debt. The amounts involved may be material.
Under the Starz Networks Strategic Content Review and International Restructuring, the remaining liability associated with the future cash outlay less estimated recoveries for contractual commitments related to programming content restructuring charges and contract termination fees recorded through September 30, 2026 is estimated to be approximately $178.0 million. During the nine months ended September 30, 2026, we paid $67.1 million of this liability. See, Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies, for further details.
We currently believe that cash flow from operations, cash on hand, availability under our $183.0 million senior secured revolving credit facility which is undrawn at September 30, 2026, monetization of trade accounts receivable and available programming related obligations will be adequate to meet known operational cash and debt service requirements (i.e. principal and interest payments) for the next twelve months and beyond, including the funding of programming content which includes amounts under our original series licensing and production agreements, theatrical output and library agreements and remaining impairment charges. We monitor our operating cash flow, including content spending and capital expenditures and our debt service and leverage ratios with the goal of maintaining our credit worthiness and financial flexibility.
Our current financing strategy is to fund operations and to leverage investments in programming content in the short-term and long-term through our cash flow from operations, the monetization of trade accounts receivable, borrowings from our $183.0 million revolving credit facility which is undrawn at September 30, 2026, and available programming related obligations. In addition, we may acquire businesses or assets, including individual films or libraries that are complementary to our business. Any such transaction could be financed through our cash flow from operations, credit facilities, and/or equity or debt financing. If additional financing beyond our existing sources cannot fund such transactions, there is no assurance that such financing will be available on terms acceptable to us. Our ability to obtain any additional financing will depend on, among other things, our business plans, operating performance, the condition of the capital markets at the time we seek financing, and debt ratings assigned by independent rating agencies. Additionally, circumstances such as the war in the Middle East and other global events have from time to time caused disruption in the capital markets, which could make financing more difficult and/or expensive, and we may not be able to obtain such financing. We may also dispose of assets and use the net proceeds from such dispositions to fund operations or such acquisitions, or to repay debt.
Material Cash Requirements from Known Contractual Obligations and Commitments
The following table sets forth our significant contractual and other obligations as of September 30, 2026 and the estimated timing of payment:
(Amounts in millions)
| Future annual repayment of debt and other obligations recorded as of September 30, 2026 (on-balance sheet arrangements) (1) | Total | Next 12 Months | Beyond 12 Months |
|---|---|---|---|
| Term Loan A | $362.4 | $20.2 | $342.2 |
| 5.5% Senior Notes | 325.1 | — | 325.1 |
| Programming related obligations(2) | 78.6 | 40.6 | 38.0 |
| Programming related payables(3) | 170.3 | 149.3 | 21.0 |
| Contract termination liability(4) | 128.6 | 59.5 | 69.1 |
| Operating lease obligations | 52.0 | 11.9 | 40.1 |
| $1,117.0 | $281.5 | $835.5 | |
| Contractual commitments by expected repayment date (off-balance sheet arrangements) | |||
| Programming related payables commitments(5) | $163.8 | $152.0 | $11.8 |
| Interest payments(6) | 143.9 | 44.8 | 99.1 |
| Other contractual obligations(7) | 57.6 | 44.3 | 13.3 |
| Contract termination liability accretion | 18.4 | 3.7 | 14.7 |
| 383.7 | 244.8 | 138.9 | |
| Total future repayment of debt and other commitments under contractual obligations | $1,500.7 | $526.3 | $974.4 |
(1) Refer to Note 3, Debt, for further information on our corporate debt and financing transactions following the completion of the Separation. Refer to Note 4, Programming Related Obligations, for further information on programming related obligations.
(2) Programming related obligations include secured production loans with an outstanding total balance of $78.6 million, due in January 2027 and May 2028. Refer to Note 4, Programming Related Obligations, for further information on programming related obligations.
(3) Programming related payables at September 30, 2026 include $34.4 million of restructuring related content liabilities.
(4) The contract termination liability reflects termination fees payable in connection with our agreement to terminate certain live-action films under a post-pay-one output licensing arrangement. The termination cost is based on an agreed fee schedule which includes a measure of theatrical box office performance. Some of the underlying films have not yet been released theatrically, therefore the liability is an estimate and the final termination cost may differ.
(5) Programming related payables commitments include program rights commitments not reflected on the consolidated balance sheets as they do not currently meet the criteria for recognition. Program rights commitments represent contractual commitments under programming license agreements related to third party commitments for our original series in production and films that are not available for exhibition until some future date (see below for further details).
(6) Includes cash interest payments on the Company's corporate debt as of September 30, 2026, including Term Loan A, 5.5% Senior Notes, and operating lease liabilities imputed interest.
(7) Includes contractual obligations related to advertising and marketing spend, executive employment arrangements, and affiliate marketing agreements.
We have an exclusive multi-year output licensing agreement with New Lionsgate for Lionsgate label titles theatrically released in the U.S. that started January 1, 2022, and for Summit label titles theatrically released in the U.S. that started January 1, 2023. The programming fees paid by us under the arrangements are based on the quantity and domestic theatrical exhibition receipts of qualifying films. We are unable to estimate the amounts to be paid under this agreement for films that have not yet been released in theaters, however, such amounts are expected to be significant.
On January 1, 2022, we entered into an exclusive multiyear post-pay-one output licensing agreement with Universal for live-action films theatrically released in the U.S. The Universal agreement provided us with rights to exhibit these films immediately following their pay-one windows. The programming fees paid by us under this agreement are based on the quantity and domestic theatrical exhibition receipts of qualifying films. In April 2026, Starz entered into an agreement to terminate certain live-action films under this post-pay-one output licensing agreement. As a result, Starz recognized a programming contract termination liability, which was recorded in Restructuring and other costs during the three and nine months ended September 30, 2026.
Remaining Revenue Performance Obligations
Remaining revenue performance obligations represent deferred revenue on the balance sheet. As described in Note 7, Revenue, to the accompanying financial statements, remaining performance obligations were $59.1 million as of September 30, 2026 and $52.8 million as of December 31, 2025.
Discussion of Operating, Investing, Financing Cash Flows
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Cash and cash equivalents increased by $51.1 million for the nine months ended September 30, 2026 and increased by $22.8 million for the nine months ended September 30, 2025. Components of these changes are discussed below in more detail.
Operating Activities. Cash flows provided by (used in) operating activities for the nine months ended September 30, 2026 and September 30, 2025 were as follows:
(Amounts in millions)
| Nine Months Ended September 30, 2026 | 2025 | 2026 vs 2025 Net Change | |
|---|---|---|---|
| Net cash flows provided by (used in) operating activities | $63.9 | (24.2) | $88.1 |
The increase in cash provided by operating activities in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 is primarily due to lower cash paid for programming content along with the timing of receipts of accounts receivable, and payments of accounts payable, and accrued liabilities. Cash paid for programming content totaled $469.4 million and $553.9 million for the nine months ended September 30, 2026 and September 30, 2025, respectively.
Investing Activities. Cash (used in) provided by investing activities for the nine months ended September 30, 2026 and September 30, 2025 were as follows:
STARZ ENTERTAINMENT CORP.
(Amounts in millions)
| Nine Months Ended September 30, 2026 | 2025 | 2026 vs 2025 Net Change | |
|---|---|---|---|
| Capital expenditures | $(15.5) | $(16.0) | $0.5 |
| Deferred purchase price of receivables sold | 1.2 | 1.2 | — |
| New Lionsgate revolving credit facility – increases | — | 455.5 | (455.5) |
| New Lionsgate revolving credit facility – decreases | — | (321.5) | 321.5 |
| Net cash flows (used in) provided by investing activities | $(14.3) | $119.2 | $(133.5) |
Cash flows used in investing activities for the nine months ended September 30, 2026 primarily reflects cash used for capital expenditures. Cash flows provided by investing activities for the nine months ended September 30, 2025, primarily reflects cash provided to the LG Studios Business through the Intercompany Revolver partially offset by the cash used for capital expenditures.
Financing Activities. Cash flows used in financing activities for the nine months ended September 30, 2026 and September 30, 2025 were as follows:
(Amounts in millions)
| Nine Months Ended September 30, 2026 | 2025 | 2026 vs 2025 Net Change | |
|---|---|---|---|
| Debt – borrowings, net of debt issuance and redemption costs | $232.3 | $491.3 | $(259.0) |
| Debt – repayments | (173.4) | (199.5) | 26.1 |
| Net borrowings of debt | 58.9 | 291.8 | (232.9) |
| Programming related obligations – borrowings | 269.4 | 412.9 | (143.5) |
| Programming related obligations – repayments | (321.5) | (385.0) | 63.5 |
| Net (repayments) borrowings from programming related obligations | (52.1) | 27.9 | (80.0) |
| Exercise of stock options | 0.8 | — | 0.8 |
| Tax withholding on equity awards | (6.1) | — | (6.1) |
| Distribution of Exchange Notes to New Lionsgate upon Separation | — | (389.9) | 389.9 |
| Parent net investment | — | (2.0) | 2.0 |
| Net cash flows provided by (used in) financing activities | $1.5 | $(72.2) | $73.7 |
Cash flows provided by financing activities for the nine months ended September 30, 2026 includes $58.9 million of net borrowings of debt, primarily reflecting the $67.0 million drawn under the incremental Term Loan A facility entered into in August 2026, partially offset by principal repayments and debt issuance costs. Financing activities also included $52.1 million of net repayments of programming-related obligations.
Cash flows used in financing activities for the nine months ended September 30, 2025 reflects the release of the Company's obligation towards the $389.9 million of Exchange Notes at the date of Separation, net borrowings under the Old Lionsgate Revolving Credit Facility of $291.8 million and from programming related obligations of $27.9 million. In addition, $2.0 million of intercompany activity with Old Lionsgate was reflected as cash flows used in financing activities during the nine months ended September 30, 2025.
Market risk
As filed, 3,134 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Currency and Interest Rate Risk Management
Market risks relating to our operations result primarily from changes in interest rates and, to a lesser extent, changes in foreign currency exchange rates. Our exposure to interest rate risk results primarily from variable-rate borrowings under our debt arrangements, while our exposure to foreign currency exchange rate risk relates to transactions denominated in currencies other than the U.S. Dollar. As part of our overall risk management program, we evaluate our exposure to changes in interest rates and foreign currency exchange rates on an ongoing basis and may utilize derivative financial instruments to manage identified risks.
Interest Rate Risk. Certain of our borrowings, primarily borrowings under our credit facilities, are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on this variable rate indebtedness would increase even though the amount borrowed remained the same, and our net loss would increase. The Company’s objective is to mitigate the impact of interest rate changes on earnings and cash flows and has entered into $150.0 million worth of pay-fixed interest rate exchange swaps to facilitate its interest rate risk management activities. Pay-fixed swaps effectively convert floating-rate borrowings to fixed-rate borrowings. Refer to Note 12, Derivative Instruments and Hedging Activities, for further details.
Currency Rate Risk. The Company is exposed to foreign currency exchange rate fluctuations related to certain programming, production and operating costs denominated in foreign currencies. However, the Company does not believe that foreign currency exchange rate fluctuations represent a material market risk as of September 30, 2026.
Our variable interest rate production loans incur SOFR-based interest of 6.3%.
At September 30, 2026, our Term Loan A had an outstanding carrying value of $357.0 million, with a fair value of $362.4 million, and our 5.5% Senior Notes had an outstanding carrying value of $320.7 million, with a fair value of $277.1 million.
The following table presents information about our financial instruments that are sensitive to changes in interest rates. The table also presents the cash flows of the principal amounts of the financial instruments, and related weighted-average interest rates by expected maturity or required principal payment dates and the fair value of the instrument as of September 30, 2026:
(Amounts in millions)
| Variable Rates: | 2026 | Year Ended December 31, 2027 | 2028 | 2029 | Thereafter | Total | Fair Value September 30, 2026 |
|---|---|---|---|---|---|---|---|
| Term Loan A | $4.6 | $22.0 | $335.8 | $— | $— | $362.4 | $362.4 |
| Average Interest Rate | 6.8% | ||||||
| Production Loans | $— | $40.6 | $38.0 | $— | $— | $78.6 | $78.6 |
| Average Interest Rate | 6.3% | ||||||
| Fixed Rates: | |||||||
| 5.5% Senior Notes | $— | $— | $— | $325.1 | $— | $325.1 | $277.1 |
| Fixed Interest Rate | 5.5% |
46
Controls and procedures
As filed, 1,758 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We periodically review the design and effectiveness of our disclosure controls and internal control over financial reporting. We make modifications to improve the design and effectiveness of our disclosure controls and internal control structure, and may take other corrective action, if our reviews identify a need for such modifications or actions.
As of September 30, 2026, the end of the period covered by this report, the Company’s management had carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that such controls and procedures were effective as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Risk factors
As filed, 156 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
There were no material changes to the risk factors previously reported in our Annual Report on Form 10-KT for the transition period ended December 31, 2025.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2026-09-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2026-07-01 to 2026-09-30 | $322.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months2026-01-01 to 2026-09-30 | $937.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months2026-07-01 to 2026-09-30 | −$21.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months2026-01-01 to 2026-09-30 | −$349.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months2026-07-01 to 2026-09-30 | $14.0m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months2026-01-01 to 2026-09-30 | $41.5m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months2026-07-01 to 2026-09-30 | −$1.7m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months2026-01-01 to 2026-09-30 | −$6.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2026-07-01 to 2026-09-30 | −$34.8m | us-gaap:NetIncomeLoss |
| Net income | 9 months2026-01-01 to 2026-09-30 | −$389.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2026-07-01 to 2026-09-30 | −$2.02 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months2026-01-01 to 2026-09-30 | −$22.98 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2026-07-01 to 2026-09-30 | −$2.02 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months2026-01-01 to 2026-09-30 | −$22.98 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2026-07-01 to 2026-09-30 | 17,200,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months2026-01-01 to 2026-09-30 | 16,900,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months2026-01-01 to 2026-09-30 | $63.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months2026-01-01 to 2026-09-30 | $15.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | At period end2026-09-30 | $86.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2026-09-30 | $164.1m | us-gaap:AssetsCurrent |
| Total assets | At period end2026-09-30 | $1.59bn | us-gaap:Assets |
| Current liabilities | At period end2026-09-30 | $492.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | At period end2026-09-30 | $1.33bn | us-gaap:Liabilities |
| Long-term debt | At period end2026-09-30 | $657.5m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | At period end2026-09-30 | $20.2m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | At period end2026-09-30 | $268.9m | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0000929351-26-000054. Last ingested by Listed: Oct 29, 2026, 16:31 ET. Listed shows no prices and gives no investment advice.