Starz Entertainment Corp.

Good day, and thank you for standing by. Welcome to the STAAR's third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Neal A. Shaw, with Starz Investor Relations. Please go ahead.

Good afternoon. Thank you for joining us for Starz Entertainment's fiscal 2025 third quarter earnings call. We'll begin with opening remarks from our president and CEO, Jeffrey Hirsch, followed by remarks from our CFO, Scott McDonald. Also joining us on the call today is Allison Hoffman, president of Starz Networks. After our opening remarks, we'll open the call for questions. The matters discussed on the call include four looking statements, including those regarding expected future performance. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the four looking statements as a result of various factors. This includes the risk factors set forth in our most recently filed 10Q for Stars Entertainment Corp. STARS undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. The matters discussed today will also include non-GAAP measures. The reconciliation for these and additional required information is available in the 8K we filed this afternoon, which is available on the STARS Investor Relations website at investors.stars.com. I'll now turn the call over to Jeff.

Thank you, Neelay. Thank you, everyone, for joining us today. I am pleased to report that STARS delivered a strong quarter, both financially and operationally. Before I get into the highlights of the quarter, I want to give an update on how STARS is executing against our post-separation plan. As we laid out at separation, our growth strategy has two clear paths. First, our focus has been on growing our core business. by increasing our margins to 20% as we exit calendar 2028, converting 70% of adjusted OEBDA to unlevered free cash flow, and delevering to two and a half times as quickly as possible. Rebuilding our content library through ownership is a key component to delivering this result. Ownership of our series improves both the cost structure of our content and allows us to generate incremental revenue through international content licensing. Today, we are announcing a structural change to our Canadian operation. We are moving from a joint venture model to a stable, consistent content licensing agreement with our partner Bell Canada. Under this new simplified structure, the STARS branded service will continue to be available in Canada, and STARS will generate international licensing revenue, while Bell will assume full operational responsibility in the territory. This approach is consistent with our strategy of owning our content and creating incremental licensing revenue without the need to operate international services directly. As we've shared over the past couple quarters, we have been aggressively working toward delivering our previously stated goal of owning half of our slate. We opened several writers' rooms just weeks after separation. A couple of weeks after that, we greenlit our first star's owned original, Fightland, from Curtis 50 Cent Jackson. The series is currently in production in London, and we are thrilled with how the show is coming along. We have a stellar cast, an award-winning stable of directors and producers, and we plan to have it ready to premiere next year. I'm excited to share today that we're in the late stages of bringing on a co-commission partner on Fightland, which will improve the economics of the series. This will layer incremental international revenue on top of the previously discussed revenue from Bell Canada. The partnership will lower the per episode cost on an already attractively priced show and has the potential to expand to additional stars owned originally. Both the Bell and Fightland deals will be modestly accretive to adjusted OEBDA and free cash flow in calendar 2026, and they will assist us on our path to reaching 20% margins exiting calendar 2028. While we continue to strengthen our core business, we are also looking to build upon our valuable core demos of women and underrepresented audiences. With a potential for increased consolidation across the media landscape, we believe that we are uniquely positioned to capitalize on potential M&A opportunities. Given our track record of profitably converting our business from linear to digital and our industry-leading tech stack, we are poised to increase our scale as assets that are strategically valuable to stars become available. Turning to the quarter, we delivered on all key operational goals we outlined on our last call. including a return to positive revenue and U.S. OTT subscriber growth. U.S. OTT subscribers have now grown by 670,000 year-over-year, with growth in three out of the last four quarters. We expect to continue revenue and U.S. OTT subscriber growth in the fourth quarter and to finish another year with approximately $200 million of adjusted EBITDA. Digging deeper into the third quarter results, OTT engagement reached a 12-month high, driven by the performance of Blood of My Blood, the prequel to our hit franchise, Outlander. The series successfully re-engaged the fan base while also attracting new subscribers, demonstrating the continued strength of the Outlander universe. The quarter was also aided by the premiere of Ballerina from the John Wick franchise, which we strategically moved to air a quarter earlier than planned. Key temples in the fourth quarter include season three of Power spin-off Force and the new chapter in the Spartacus world, House of Asher. Our slate continues to be strong as we head into calendar 2026. We have a full lineup of originals, including the return of some of our most highly anticipated temples. These include the epic final seasons of Outlander and Power Book 3 Raising Kanan, the premiere of Fightland, the return of Blood of My Blood, and the new season of one of our biggest hits, P-Valley, from Pulitzer Prize-winning creator Katori Hall. Even with the strength of this slate, we expect investment in content to decrease year over year, helping drive improved free cash flow in calendar 2026. In closing, STARS continues to execute well in a rapidly changing operating environment. While the media industry continues to face significant headwinds, we are confident in our ability to deliver on our plan, and we are well positioned to take advantage of the structural changes we expect to take place in the sector over the next 12 to 24 months. And now I'd like to hand it over to Scott to go over the financials.