Q4 2025 Starz Entertainment Corp Earnings Call

February 26, 2026

Speaker #2: Sing me a song of a lust that is gold. Say could that last be I?

Speaker #3: Mary of soul, she sailed on a day over the sea to sky.

Jeffrey Hirsch: They say this is a big rich town. I just come from the poorest part. Bright light city life, I gotta make it. This is where it goes down. I just something that's come apart.

Speaker #4: They say this is a big rich town. I just come from the poorest part. Bright lights, city lights, I gotta make it. This is where it goes down.

Speaker #4: I just happened to come up hard.

Speaker #5: Good day and thank you for standing by. Welcome to the Starz Q4 2025 earnings call. At this time, all participants are in a listen-only mode.

Operator: Good day. Thank you for standing by. Welcome to the STARZ Q4 2025 Earnings Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question-and-answer session. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. I would now like to hand the conference over to your speaker today, Nilay from Investor Relations.

Speaker #5: Please be advised that today's conference is being recorded. After the speakers' presentations, there will be a question-and-answer session. To ask a question, please press star 11 on your telephone and wait for your name to be announced.

Speaker #5: To withdraw your question, please press star 11 again. I would now like to hand the conference over to your speaker today, Nilay from Investor Relations.

Speaker #6: Good afternoon. Thank you for joining us for Starz Entertainment's fiscal 2025 fourth quarter earnings call. We'll begin with opening remarks from our president and CEO, Jeffrey Hirsch, followed by remarks from our CFO, Scott Macdonald.

Nilay Shah: Good afternoon. Thank you for joining us for Starz Entertainment's fiscal 2025 Q4 earnings call. We'll begin with opening remarks from our President and CEO, Jeffrey Hirsch, followed by remarks from our CFO, Scott Macdonald. Also joining us on the call today is Alison Hoffman, President of STARZ Networks. After our opening remarks, we'll open the call for questions. The matters discussed on the call include forward-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 forward-looking statements as a result of various factors. This includes the risk factors set forth in our most recently filed 10-Q for Starz Entertainment Corp. STARZ 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.

Speaker #6: 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 forward-looking statements, including those regarding expected future performance.

Speaker #6: Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors.

Speaker #6: This includes the risk factors set forth in our most recently filed 10Q for Starz Entertainment Corp. Starz 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.

Speaker #6: 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 Starz Investor Relations website at investors.starz.com.

Nilay Shah: The matters discussed today will also include non-GAAP measures. The reconciliation for these and additional required information is available in the 8-K we filed this afternoon, which is available on the Starz investor relations website at investors.starz.com. I'll now turn the call over to Jeff.

Speaker #6: I'll now turn the call over to Jeff.

Speaker #7: Thank you, Nilay, and thank you, everyone, for joining us today. It's only been nine months since our separation, and I'm pleased to report that Starz delivered another strong quarter, both financially and operationally.

Jeffrey Hirsch: Thank you, Nilay. Thank you everyone for joining us today. It's only been nine months since our separation, and I'm pleased to report that Starz delivered another strong quarter, both financially and operationally. Before I get into the highlights of the quarter, I want to give everyone an update on how we are executing in our core operations and how we are positioned for 2026 and beyond. 2025 was a very successful year, one in which we exceeded all of our financial guidance. It's a feat we're especially proud of amidst the pressures you see happening across the industry. We ended the year at an all-time high of 12.7 million OTT subscribers, growing year-over-year by 7.6%. We grew OTT subscribers in three out of four quarters, including adding 370,000 in Q4 alone.

Speaker #7: Before I get into the highlights of the quarter, I want to give everyone an update on how we are executing in our core operations and how we are positioned for 2026 and beyond.

Speaker #7: 2025 was a very successful year, one in which we exceeded all of our financial guidance. It's a feat we're especially proud of amidst the pressures you see happening across the industry.

Speaker #7: We ended the year at an all-time high of $12.7 million OTT subscribers, growing year over year by 7.6%. We grew OTT subscribers in three out of four quarters, including adding 370,000 in the fourth quarter alone.

Speaker #7: This resulted in 170,000 total subscriber growth in quarter four. We grew total revenue on a sequential basis in both quarter three and quarter four.

Jeffrey Hirsch: This resulted in 170,000 total subscriber growth in Q4. We grew total revenue on a sequential basis in both Q3 and Q4. We exceeded our $200 million outlook for 2025 by 2%, delivering $204 million and grew Adjusted OIBDA year-over-year. We exceeded our leverage target ending the year lower than anticipated at 2.9x versus a 3.1x guide. The successful 2025 was aided by an exceptionally strong Q4. Our substantial subscriber growth in the quarter was fueled by the stellar reception to our programming slate. We premiered the highly anticipated Spartacus revival to critical acclaim, and Power Book IV: Force Season 3 delivered impressive in-season viewership growth of 57%. The momentum from Q4 has continued into 2026, resulting in a strong start to the year.

Speaker #7: We exceeded our $200 million outlook for 2025 by 2%, delivering $204 million and grew adjusted EBITDA year over year. And we exceeded our leverage target ending the year lower than anticipated at 2.9 times, versus a 3.1 times guide.

Speaker #7: The successful 2025 was aided by an exceptionally strong December quarter. Our substantial subscriber growth in the quarter was fueled by the stellar reception to our programming slate.

Speaker #7: We premiered the highly anticipated Spartacus Revival to critical acclaim and PowerBook 4 Force Season 3 delivered impressive in-season viewership growth of 57%. The momentum from quarter four has continued into 2026, resulting in a strong start to the year.

Speaker #7: The success of our originals proved that our bedrock strategy is working. We deliver edgy, premium content for women and underrepresented audiences that broad-based streamers don't address.

Jeffrey Hirsch: The success of our originals prove that our bedrock strategy is working. We deliver edgy premium content for women and underrepresented audiences that broad-based streamers don't address. Content remains core to everything we do. As we look at the rest of 2026, it's clear we have one of our most compelling lineups of originals. The slate includes the highly anticipated conclusion of Outlander and Power Book III: Raising Kanan, the premiere of STARZ-owned Fightland, the return of Blood of My Blood, and the long-awaited return of one of our biggest hits, P-Valley, from Pulitzer Prize-winning showrunner Katori Hall. These 2026 originals are Pay One movies from Lionsgate, including films like The Housemaid and the Michael biopic, and our robust development pipeline make it clear that STARZ has never been better positioned to keep our audience engaged, entertained, and growing.

Speaker #7: Content remains core to everything we do, and as we look at the rest of 2026, it's clear we have one of our most compelling lineups of originals.

Speaker #7: The slate includes the highly anticipated conclusion of Outlander and PowerBook 3 Raisin Cannon, the premiere of Starz's own Fightland, the return of Blood of My Blood, and the long-awaited return of one of our biggest hits, Pee Valley, from Pulitzer Prize-winning showrunner Katori Hall.

Speaker #7: These 2026 originals are Pay One Movies from Lionsgate, including films like The Housemaid and the Michael biopic, and our robust development pipeline make it clear that Starz has never been better positioned to keep our audience engaged, entertained, and growing.

Speaker #7: Before I get into our key financial targets for 2026, I want to recap our operational milestones in 2025. The restructured our Canadian business into a licensing revenue stream prioritizing our focus on the US market.

Jeffrey Hirsch: Before I get into our key financial targets for 2026, I want to recap our operational milestones in 2025. We restructured our Canadian business into a licensing revenue stream, prioritizing our focus on the US market. We greenlit and completed production on our first wholly owned series, Fightland, advancing our strategy of rebuilding our content library through ownership. This morning, we announced that Sky will come on board as our co-commission partner for Fightland, further improving the already superior unit economics we get from owning the series. We've also made significant strides in de-aging our content slate this year while still expanding our network-defining franchises, Outlander and the Power universe. More specifically, we successfully launched Outlander prequel, Blood of My Blood, and have greenlit a new Power Universe series.

Speaker #7: We greenlit and completed production on our first wholly owned series Fightland, advancing our strategy of rebuilding our content library through ownership. And this morning, we announced that Sky will come on board as our co-commission partner for Fightland.

Speaker #7: Further improving the already superior unit economics we get from owning the series. We've also made significant strides in de-aging our content slate this year while still expanding our network-defining franchises Outlander and The Power Universe.

Speaker #7: More specifically, we successfully launched Outlander prequel Blood of My Blood and have greenlit a new Power Universe series, Power Origins, which has a supersized 18-episode order, is currently in production, and will give fans an action-packed origin story of fan-favorite characters Ghost and Tommy as ambitious young entrepreneurs.

Jeffrey Hirsch: Power: Origins, which has a supersized 18-episode order, is currently in production and will give fans an action-packed origin story of fan favorite characters Ghost and Tommy as ambitious young entrepreneurs. These shifts are critical in achieving our long-term targets of increasing margins to 20%, converting 70% of Adjusted OIBDA to unlevered free cash flow, and delevering to 2.5x as quickly as possible. The changes fortify our long-term path and set us up to continue the growth we delivered in 2025 through 2026. Our outlook for 2026 is strong. We expect OTT revenue to grow. We expect to deliver low single-digit percentage Adjusted OIBDA growth versus 2025. We anticipate generating between $80 million to $120 million of positive unlevered free cash flow, converting the business to positive equity free cash flow.

Speaker #7: These shifts are critical in achieving our long-term targets of increasing margins to 20%, converting 70% of adjusted EBITDA to unleveraged free cash flow, and delivering to two and a half times as quickly as possible.

Speaker #7: The changes fortify our long-term path and set us up to continue the growth we delivered in 2025 through 2026. Our outlook for 2026 is strong.

Speaker #7: We expect OTT revenue to grow. We expect to deliver low single-digit percentage adjusted EBITDA growth versus 2025. We anticipate generating between $80 million and $120 million of positive unleveraged free cash flow.

Speaker #7: Converting the business to positive equity free cash flow. And we expect to end the year at approximately $2.7 times leverage, an improvement from our current $2.9 times leverage and well on our way to reaching our stated goal of $2.5 times leverage.

Jeffrey Hirsch: We expect to end the year at approximately 2.7x leverage, an improvement from our current 2.9x leverage and well on our way to reaching our stated goal of 2.5x leverage. As we stated, we have spent several quarters unwinding some of the legacy constraints of operating within a studio. We believe this has set up the business to drive strong cash flow generation going forward, with 2026 functioning as an inflection point. With the long-term growth of the business as our North Star, we are de-emphasizing the need to manage the business around quarterly subscriber levels. As a result, we will not be disclosing subscribers starting with the Q1 2026. We remain laser-focused on OTT revenue growth, profitability, converting Adjusted OIBDA to free cash flow, and delevering.

Speaker #7: As we stated, we've spent several quarters unwinding some of the legacy constraints of operating within a studio. We believe this has set up the business to drive strong cash flow generation going forward, with 2026 functioning as an inflection point.

Speaker #7: With the long-term growth of the business as our North Star, we are de-emphasizing the need to manage the business around quarterly subscriber levels. As a result, we will not be disclosing subscribers starting with the March 2026 quarter.

Speaker #7: We remain laser-focused on OTT revenue growth, profitability, converting adjusted EBITDA to free cash flow, and delivery. We believe this decision is in the best interest of our shareholders, as it puts us on a path to achieving the targets we outlined.

Jeffrey Hirsch: We believe this decision is in the best interest of our shareholders as it puts us on a path to achieving the targets we outlined. Before I hand the call over to Scott, I want to reiterate that we continue to believe that there's an opportunity to scale our two core demos and grow our business as a result of the increased consolidation across the media landscape. Given our track record of profitably converting our business from linear to digital and our industry-leading tech stack, we believe we are uniquely positioned to capitalize on potential M&A opportunities. We are poised to increase our scale as assets that are strategically valuable to STARZ become available. Now let me hand it over to Scott to take you through the financials.

Speaker #7: Before I hand the call over to Scott, I want to reiterate that we continue to believe that there is an opportunity to scale our two core demos and grow our business as a result of the increased consolidation across the media landscape.

Speaker #7: Given our track record of profitably converting our business from linear to digital and our industry-leading tech stack, we believe we are uniquely positioned to capitalize on potential M&A opportunities.

Speaker #7: We are poised to increase our scale as assets that are strategically valuable to Starz become available. Now let me hand it over to Scott to take you through the financials.

Speaker #8: Thank you, Jeff, and good afternoon, everyone. I'll briefly discuss the fourth quarter's financial results, provide an update on our balance sheet, and discuss our outlook for 2026.

Scott Macdonald: Thank you, Jeff. Good afternoon, everyone. I'll briefly discuss the Q4's financial results, provide an update on our balance sheet, and discuss our outlook for 2026. It was a strong Q4 and calendar year for Starz as Jeff outlined. We were able to reach the key milestones we outlined on our previous calls for both the quarter and the year. We positioned the post-separation business to drive a significant increase in free cash flow generation from 2020 to 2026 while further bringing down our leverage. Let me start the breakdown of the Q4 with an update on our subscribers. Please note that our financials for the Q4 reflect the transition of our Canadian operations to a content licensing relationship. Hence, I will focus my discussion on subscriber trends on Starz's US business.

Speaker #8: It was a strong fourth quarter and calendar year for Starz, as Jeff outlined. We were able to reach the key milestones we outlined on our previous calls for both the quarter and the year.

Speaker #8: And we positioned the post-separation business to drive a significant increase in free cash flow generation from 2025 to 2026, while further bringing down our leverage.

Speaker #8: Let me start the breakdown of the quarter with an update on our subscribers. Please note that our financials for the fourth quarter reflect the transition of our Canadian operations to a content licensing relationship, and hence, I will focus my discussion on subscriber trends on Starz's US business.

Speaker #8: Starz added $370,000 domestic OTT subscribers in the quarter, reaching an all-time high of $12.7 million customers. Additionally, total US subscribers grew 170,000 in the period to $17.6 million, as growth in OTT was partially offset by a decline in linear customers.

Scott Macdonald: STARZ added 370,000 domestic OTT subscribers in Q4, reaching an all-time high of 12.7 million customers. Additionally, total US subscribers grew 170,000 in the period to 17.6 million, as growth in OTT was partially offset by a decline in linear customers. The increase in subscribers in the seasonally strong Q4 was driven by demand for our scripted originals, including Force and Spartacus. Moving on to revenue. Total revenue in Q4 was $323 million, up 60 basis points on a sequential basis. Sequential revenue growth was driven by an increase in distribution revenue, primarily from revenue recognized in Q4 related to the transition of our Canadian operations to a content licensing relationship and is reflected in the linear and other revenue line item on our income statement.

Speaker #8: The increase in subscribers in the seasonally strong fourth quarter was driven by demand for our scripted originals, including Force and Spartacus. Moving on to revenue, total revenue in the quarter was $323 million, up 60 basis points on a sequential basis.

Speaker #8: Sequential revenue growth was driven by an increase in distribution revenue, primarily from revenue recognized in the quarter related to the transition of our Canadian operations to a content licensing relationship, and is reflected in the linear and other revenue line item on our income statement.

Speaker #8: This growth in distribution revenue was partially offset by a decline in linear and OTT revenue, which stemmed from ongoing traditional linear declines and heavy holiday seasonal promotions, including lower churn multi-month plans.

Scott Macdonald: This growth in distribution revenue was partially offset by a decline in linear and OTT revenue, which stemmed from ongoing traditional linear declines and heavy holiday seasonal promotions, including lower churn multi-month plans. Adjusted OIBDA for the quarter was $56 million, up over 100% sequentially due to lower programming amortization, lower advertising and marketing, and higher revenue. We ended the calendar year with $204 million of Adjusted OIBDA, exceeding our $200 million outlook. Looking at the balance sheet, we ended the quarter with net debt of $589 million, roughly flat with Q3 levels. Total gross debt was flat at $625 million and includes $325 million of our 5.5% senior unsecured notes, as well as $300 million of our Term Loan A.

Speaker #8: Adjusted EBITDA for the quarter was $56 million, up over 100% sequentially due to lower programming amortization, lower advertising marking, and higher revenue. We ended the calendar year with $204 million of adjusted EBITDA, exceeding our $200 million outlook.

Speaker #8: Looking at the balance sheet, we ended the quarter with net debt of $589 million, roughly flat with Q3 levels. Total gross debt was flat at $625 million, and includes $325 million of our five and a half percent senior unsecured notes, as well as $300 million of our term loan A.

Speaker #8: Cash was $36 million, and our $150 million revolver remained undrawn at the end of the period. Leverage at the end of 2025 was 2.9 times, better than our previous guidance of exiting the year at 3.1 times.

Scott Macdonald: Cash was $36 million and our $150 million revolver remained undrawn at the end of the period. Leverage at the end of 2025 was 2.9x, better than our previous guidance of exiting the year at 3.1x. Looking forward, as Jeff noted in his prepared remarks, 2026 is going to be a year with significant focus on driving increased free cash flow. More specifically, in 2026, we expect unlevered free cash flow to range between $80 million to $120 million, and we expect to generate positive equity free cash flow for the year. This represents approximately an $80 million to $120 million improvement year-over-year in both measures.

Speaker #8: Looking forward, as Jeff noted in his prepared remarks, 2026 is going to be a year with significant focus on driving increased free cash flow.

Speaker #8: More specifically, in 2026, we expect unleveraged free cash flow to range between $80 million to $120 million, and we expect to generate positive equity free cash flow for the year.

Speaker #8: This represents approximately an $80 million to $120 million improvement year over year in both measures. The improvement in cash flow stems from lower cash content spend in 2026 versus 2025, which drives a closer alignment of cash content spend with the programming amortization expense reflected on our income statement.

Scott Macdonald: The improvement in cash flow stems from lower cash content spend in 2026 versus 2025, which drives a closer alignment of cash content spend with the programming amortization expense reflected on our income statement. Finally, as we complete the transition in the first few months of 2026 from being part of a studio business and bringing our content payment timing in better alignment with industry norms, with improved free cash flow and another year of at least $200 million of Adjusted OIBDA. We expect our leverage to continue to decline year-over-year and exit the year at approximately 2.7x. Now I'd like to turn the call back over to Nilay for Q&A.

Speaker #8: Finally, as we complete the transition in the first few months of 2026 from being part of a studio business and bringing our content payment timing in better alignment with industry norms, with improved free cash flow, and another year of at least $200 million of adjusted EBITDA, we expect our leverage to continue to decline year over year and exit the year at approximately 2.7 times.

Speaker #8: Now I'd like to turn the call back over to Nilay for Q&A.

Speaker #1: At operator, could we open up the call for Q&A?

Operator: Operator, could we open up the call for Q&A? Yes, thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for questions. Our first question comes from Brent Penter with Raymond James & Associates. You may proceed.

Nilay Shah: Operator, could we open up the call for Q&A?

Speaker #9: Yes, thank you. As a reminder to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again.

Operator: Yes, thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for questions. Our first question comes from Brent Penter with Raymond James & Associates. You may proceed.

Speaker #9: One moment for questions. And our first question comes from Brent Penter with Raymond James & Associates. You may proceed.

Brent Penter: Hey, good afternoon, everyone. Thanks for taking the questions. First and foremost, appreciate the 50 Cent hold music there. Good to see the $200 million target exceeded in 2025 and then expected to grow in 2026. Can you just walk us through some of the moving pieces? You talked about OTT revenue up. How should we think about total revenue? Then with that 20% margin target out there exiting 2028, what kind of progress in 2026 does the guidance contemplate?

Speaker #10: Hey, good afternoon, everyone. Thanks for taking the questions. And first and foremost, appreciate the $0.50 hold music there. So good to see the $200 million target exceeded in '25 and then expected to grow in '26.

Speaker #10: Can you just walk us through some of the moving pieces? You talked about OTT revenue up. How should we think about total revenue? And then with that 20% margin target out there, exiting 2028, what kind of progress in '26 does the guidance contemplate?

Speaker #8: Hi, Brent. How are you? And look forward to seeing you on Monday. I'll take the second question in terms of the margin. So we're well on our way to exceed to executing against setting to that 20% margin coming out of calendar '28.

Jeffrey Hirsch: Hey, Brent, how are you? Look forward to seeing you on Monday. I'll take the second question in terms of the margin. We're well on our way to executing against getting to that 20% margin coming out at calendar 2028. You'll see a slight improvement in 2026, the lion's share of the improvement really comes in 2027 and 2028 when you start to see the STARZ originals really become a lion's share of our programming slate. There's a lot of, you know, de-aging of the content there, ownership of the content. We announced offsetting some of the cost by bringing Sky in on Fightland as the co-commission partner.

Speaker #8: You'll see a slight improvement in '26, but the lion's share of the improvement really comes in '27 and '28 when you start to see the Starz originals really become a lion's share of our programming slate and there's a lot of de-aging of the content there, ownership of the content.

Speaker #8: We announced offsetting some of the costs by bringing Sky in on flight land at the co-commission partner. So when you take all of the de-aging of the content, Starz owned content, creating that incremental revenue stream by selling it internationally, you really start to see us move significantly toward that 20% margin in '27 and '28.

Jeffrey Hirsch: When you take all of the de-aging of the content, STARZ content, creating that incremental revenue stream by selling it internationally, you really start to see us move significantly toward that 20% margin in 2027 and 2028. Scott, do you want to take that?

Speaker #8: Scott, do you want to take that? Well, I would just say on OTT revenue, we feel really good about growth next year. When you look at our slate, it's probably one of the best we've ever had.

Scott Macdonald: Well, I would just say on OTT revenue, we feel really good about growth next year. When you look at our slate, it's probably one of the best we've ever had. It's very consistently placed throughout the year. We feel really good about that as well as our focus on our pricing strategy.

Speaker #8: It's very consistently placed throughout the year, so we feel really good about that, as well as our focus on our pricing strategy.

Speaker #10: Okay. Got it. And then thanks for the commentary on industry consolidation. Sounds like you all are ready to capitalize if there's an opportunity. So I guess what kind of assets would you be interested in?

Brent Penter: Okay. Got it. Thanks for the commentary on industry consolidation. It sounds like you all are ready to capitalize if there's an opportunity. I guess what kind of assets would you be interested in? How should we think about the constraints in terms of your ability to buy something? Is there a leverage level you wanna go above or an equity valuation that you would wanna be at before doing any kind of deal? Just can you help frame those constraints?

Speaker #10: And then how should we think about the constraints in terms of your ability to buy something? Is there a leverage level you want to go above, or an equity valuation that you would want to be at before doing any kind of deal, or just can you help frame those constraints?

Speaker #8: Yeah, great question. I'm not going to comment on our conversations to date, but what I will say, and we've said this repeatedly, we have two very valuable core demos that make us really complementary and important in the ecosystem.

Jeffrey Hirsch: Yeah, great question. I'm not gonna comment on our conversations to date, but what I will say, and we've said this repeatedly, we have two very valuable core demos that make us really complementary and important in the ecosystem. There's a lot of, I would say, linear networks out there that have great brands that kind of complement our two core demos. Are really marooned on the linear side of the business without any kind of tech capability or, you know, desire from their larger corporate parent to try to transition them and reconnect them with their consumers that have moved to the digital side.

Speaker #8: And there's a lot of, I would say, linear networks out there that have great brands that kind of complement our two core demos but are really marooned on the linear side of the business without any kind of tech capability or desire from their larger corporate parent to try to transition them and reconnect them with their consumers that have moved to the digital side.

Speaker #8: And so those are kind of the characteristics that we look at to make sure that we're continuing to lean into what we do on an SVOD side, much more on an ad-supported side.

Jeffrey Hirsch: Those are kind of the characteristics that we look at to make sure that we're continuing to lean into what we do on an SVOD side, much more on an ad-supported side. Again, you know, we continue to drive leverage down. Scott and I continue to focus on getting leverage too down to that 2.5 times. That's where we would like to operate. So any kind of, you know, deal that we do, we'd have to stick within that kind of leverage constraint to keep it around. We don't really wanna operate in a business that's 4, 5, 6 or times leverage. We'll be very cautious about what kind of deal we do when it comes to leverage.

Speaker #8: And again, we continue to drive leverage down. Scott and I continue to focus on getting leverage down to that two and a half times.

Speaker #8: And so that's where we would like to operate. So any kind of deal that we do, we'd have to stick within that kind of leverage constraint to keep it around.

Speaker #8: We don't really want to operate in a business that's four, five, six or times leveraged. And so we'll be very cautious about what kind of deal we do when it comes to leverage.

Speaker #10: Okay. Got it. And then putting M&A aside, given that free cash flow is starting to inflect, how do you rank order your other capital allocation priorities?

Brent Penter: Okay. Got it. Putting M&A aside, given that free cash flow is starting to inflect, how do you rank order your other capital allocation priorities? Obviously, de-levering has been the top goal so far. As you start to get closer to that 2.5 goal, what are your other capital allocation goals? You know, at what point, given where the valuation is, do you start to consider shareholder returns?

Speaker #10: Obviously, deleveraging has been the top goal so far, but as you start to get closer to that two-and-a-half goal, what are your other capital allocation goals?

Speaker #10: And at what point, given where the valuation is, do you start to consider shareholder returns?

Speaker #8: I think we look at this as it's going to be a good problem to have as we move forward. As I noted, we expect free cash flow to improve, or come in the range of, on an unlevered basis, $80 to $120 million.

Scott Macdonald: I think, you know, we look at this as it's gonna be a good problem to have as we move forward. You know, as I noted, you know, we expect free cash flow to improve, or come in the range 80, unlevered basis, $80 to $120 million. That's a significant improvement over the year. You'll start to, you know, have cash that we'll start to build, which will give us an opportunity to lever, further invest in the business. At that point, you know, we would be in a position to make the decision to start returning some of the of that cash to shareholders.

Speaker #8: That's a significant improvement over the year. You'll start to have cash that we'll start to build, which will give us an opportunity to lever further invest in the business.

Speaker #8: And at that point, we would be in a position to make the decision to start returning some of that cash to shareholders.

Speaker #10: Okay. Great. Thanks, everyone.

Brent Penter: Okay, great. Thanks, everyone.

Speaker #9: Thank you.

Operator: Thank you. Operator, could we get the next question, please? Our next question comes from Thomas Yeh with Morgan Stanley. You may proceed.

Nilay Shah: Thank you. Operator, could we get the next question, please?

Speaker #2: Operator, could we get the next question, please?

Speaker #9: Our next question comes from Thomas Yeh with Morgan Stanley. You may proceed.

Operator: Our next question comes from Thomas Yeh with Morgan Stanley. You may proceed.

Speaker #2: Thanks. On the OTT subscriber momentum into this year, I think you mentioned 1Q is pacing pretty healthy. Can you just talk about the retention patterns that you're seeing for the subscribers that might have come in for Spartacus or came back for PowerBook 4 season 3?

Thomas Yeh: Thanks. On the OTT subscriber momentum into this year, I think you mentioned Q1 is pacing pretty healthy. Can you just talk about the retention patterns that you're seeing for the subscribers that might have come in for Spartacus or came back for Power Book IV Season 3? Is the slate structured to run that retention through or is there, you know, something more to do there still?

Speaker #2: Is the slate structured to run that retention through, or is there something more to do there still?

Jeffrey Hirsch: I think there's really two components to that. One is the slate's really set up to have a great connected year throughout the year. We have some of our biggest shows throughout the year, you know, Canaan, P-Valley, Fightland. That's a real long, good run across the year against one of our demos. We've got Outlander finale, Blood of My Blood coming in. We have a couple acquisitions to fill the gaps there. We have a great complete slate, couple, you know, again, surrounded by great movies from the Lionsgate Pay One and the Universal Pay 2. That plus, you know, we really deployed what we've seen in our data.

Speaker #8: I think there's really two components to that. One is the slate's really set up to have a great connected year throughout the year. We have some of our biggest shows throughout the year, Canaan, Pee Valley, Fight Land.

Speaker #8: That's a real long, good run across the year against one of our demos. We've got Outlander finale, Blood of My Blood coming in. We have a couple of acquisitions to fill the gaps there.

Speaker #8: So we have a great complete slate. Again, surrounded by great movies from the Lionsgate, Pay1, and the Universal Pay2. That plus we've really deployed what we've seen in our data.

Speaker #8: We've really deployed longer-term offers. So annual offers which we see really has when people roll from that 12-month offer to retail, the take rate up to retail is significantly higher.

Jeffrey Hirsch: We really deployed longer-term offers, so annual offers, which we see really has, you know, when people, you know, roll from that 12-month offer to retail, the take rate up to retail is significantly higher. You see a lot more spike in ARPU at the end of those offers. They're also great for you know, long-term churn. The combination of a great slate and longer term offers really lead us to push churn down over the next, you know, 12 to 18 months.

Speaker #8: And so you see a lot more spike in RPU at the end of those offers. And they're also great for long-term churn. And so the combination of a great slate and longer-term offers really lead us to push churn down over the next 12 to 18 months.

Speaker #2: Okay, that's helpful. Anything on the distribution partnership side that's kicking in as well, or any update on progress there in terms of the bundled partnerships that you've taken on?

Thomas Yeh: Okay, that's helpful. Anything on the distribution partnership side that is kicking in as well? Any update on progress there in terms of the bundled partnerships that you've taken on?

Alison Hoffman: You know, Thomas, this is Alison. I would say, you know, we continue to be at the forefront of bundling. This is really a focus for us. We've set up the business to be a complementary or an add-on partner to a broad-based streamer, to targeted streamers. That's a real focus for us. I think that, you know, we're excited to expand our bundling relationships, and we're excited to see expansion in our distribution relationships. We think that even with the disruption in the industry, that those will come. Just to comment on, you know, particularly the bundling piece, you know, our data is showing that it is very good for business. The bundles that we have in place, are expanding our TAM. They're driving net new additions to the business.

Speaker #1: Thomas, this is Allison. I would say we continue to be at the forefront of bundling. This is really a focus for us. We've set up the business to be a complementary or an add-on partner to a broad-based streamer, to targeted streamers.

Speaker #1: And so that's a real focus for us. I think that we're excited to expand our bundling relationships, and we're excited to see expansion in our distribution relationships.

Speaker #1: And we think that even with the disruption in the industry that those will come, and just to comment on particularly the bundling piece, our data is showing that it is very good for business.

Speaker #1: The bundles that we have in place are expanding our TAM. They're driving net new additions to the business. The revenue accretive and then also ultimately our driving better retention for the business.

Alison Hoffman: They're revenue accretive, you know, also ultimately are driving better retention for the business. Bundling and distribution are a big focus for us, and we're excited about the year to come.

Speaker #1: So bundling and distribution are our big focus for us, and we're excited about the year to come.

Speaker #2: Okay. Great. And then last one for me. You've talked about a timeline to get to 60% plus slate ownership. If we just think about the opportunities there, is it fair to assume that we should think about the international sales as concurrent with that ramp and then ancillaries maybe start to build thereafter?

Thomas Yeh: Okay, great. Last one for me. You've talked about a timeline to get to 60% plus slate ownership. If we just think about the opportunities there, is it fair to assume that we should think about the international sales as concurrent with that ramp and then, you know, ancillaries maybe start to build thereafter?

Speaker #8: I think that's spot on. I mean, we've announced four originals that we have in some stage of production. All fours, we've just brought in Plan B.

Jeffrey Hirsch: I think that's spot on. I mean, we've got, you know, we've announced four originals that we have in some stage of production. All four, as we've just brought in Plan B, a production agency, to help produce that show, and we're super excited about that. Kingmaker, Masquerade, the rooms have just finished, and we're just, you know, getting the materials into a place. We're out looking for production partners there as well to see, you know, where we're gonna shoot those shows and at what cost. Again, as you know, as you saw with the Sky announcement this morning, we have somewhat of a first look deal with Sky where they continue to look at our slate and be excited about it, and I expect that partnership to build and grow.

Speaker #8: A production agency to help produce that show, and we're super excited about that. Kingmaker Masquerade, The Rooms have just finished, and we're just getting the materials into a place.

Speaker #8: We're outlooking for production partners there as well to see where we're going to shoot those shows and at what cost. And again, as you saw with the SKY announcement this morning, we have somewhat of a first-look deal with SKY where they continue to look at our slate and be excited about it.

Speaker #8: And I expect that partnership to build and grow. Also, Fight Land was Lionsgate, who's our international sales partner today. Took Fight Land out to Content London last night to very, very great reviews.

Jeffrey Hirsch: Also, Fightland was Lionsgate, who's our international sales partner today, took Fightland out to Content London last night, to very, very great reviews. Outside of the Sky markets, Lionsgate will sell that for us. I expect that only the unit economics of Fightland to only continue to get better.

Speaker #8: So outside of the SKY markets, Lionsgate will sell that for us. So I expect that only the unit economics of Fight Land to only continue to get better.

Speaker #2: Okay. Appreciate it. Thank you.

Thomas Yeh: Okay, appreciate it. Thank you.

Speaker #10: Could we get the next question, please?

Jeffrey Hirsch: Could we get the next question, please?

Nilay Shah: Could we get the next question, please?

Speaker #9: Thank you. Our next question comes from David Joyce with Seaport Research Partners. You may proceed.

Operator: Thank you. Our next question comes from David Joyce with Seaport Research Partners. You may proceed.

Speaker #8: Thank you. A couple of things. Last year, you had a few volatile quarters of cash flow in and out, and margins up and down.

Thomas Yeh: Thank you. A couple things. Last year, you had a few volatile quarters of cash flow in and out and margins up and down, you know, tied to some of the final, you know, content arrangements with Lionsgate. How should we think about the cadence this year of both EBITDA and free cash flow? On the free cash flow side, are, you know, is it going to be, you know, moving around based on spending for originals? That's the first question. Thanks.

David Joyce: Thank you. A couple things. Last year, you had a few volatile quarters of cash flow in and out and margins up and down, you know, tied to some of the final, you know, content arrangements with Lionsgate. How should we think about the cadence this year of both EBITDA and free cash flow? On the free cash flow side, are, you know, is it going to be, you know, moving around based on spending for originals? That's the first question. Thanks.

Speaker #8: Tied to some of the final content arrangements with Lionsgate, how should we think about the cadence this year of both EBITDA and free cash flow?

Speaker #8: And on the free cash flow side, is it going to be moving around based on spending for originals? That's the first question. Thanks. Okay.

Jeffrey Hirsch: Okay. Thanks, David. That's a good question. When, you know, you think about our, you know, P&L, it has been very up and down. A lot of that was driven by the transition from, you know, being part of a bigger studio, same thing with the related cash. You know, we worked, you know, over the last few months to bring that into better alignment. You know, we worked with our teams as to better, you know, sync up when we're spending the dollars on the production and getting that more in alignment when they are much more in line with industry standards. You know, when you're part of a bigger organization, the cash management is just totally different. You know, it's not necessarily based on just what Starz needs are.

Speaker #8: Thanks, David. That's a good question. When you think about our P&L, it has been very up and down. A lot of that was driven by the transition.

Speaker #8: From being part of a bigger studio—same thing with the related cash. We worked over the last few months to bring that better into better alignment.

Speaker #8: We worked with our teams just to better sync up when we're spending the dollars on the production and getting that more in alignment when they air.

Speaker #8: Much more in line with industry standards. When you're part of a bigger organization, the cash management is just totally different. It's not necessarily based on just what's stars needs are.

Speaker #8: So we feel like we're getting that into a really good place now as we move into '26. There's a little bit of work to do here in the first part of the year.

Jeffrey Hirsch: We feel like we're getting that into a really good place now as we move into 2026. There's a little bit of work to do here in the first part of the year, but we feel like we're on a really good glide path to improve our spend. You know, we see content spend coming in under about $650 million next year. From a P&L cadence, you'll see very consistent over the year, especially the first three quarters. The Q4 in 2026 will be a more positive quarter, but the first three will be very consistent. Won't be as choppy as you've seen in the past.

Speaker #8: But we feel like we're on a really good glide path to improve our spend. And we see content spend coming in under about $650 million next year.

Speaker #8: From a P&L cadence, you'll see very consistent over the year. Especially the first three quarters. The fourth quarter in '26 will be a more positive quarter, but the first three will be very consistent.

Speaker #8: Won't be as choppy as you've seen in the past. Okay. Thanks. And on my other question, I see you've got $41 million in production loans now.

Thomas Yeh: Okay, thanks. On my other question, I see you've got $41 million in production loans now. How many projects is that for? Is that just Fightland or is that a couple others? How many originals do you think will be in production by the time you're exiting 2026?

David Joyce: Okay, thanks. On my other question, I see you've got $41 million in production loans now. How many projects is that for? Is that just Fightland or is that a couple others? How many originals do you think will be in production by the time you're exiting 2026?

Speaker #8: How many projects is that for? Is that just Fight Land, or is that a couple others? And how many originals do you think will be in production by the time you're exiting 2026?

Jeffrey Hirsch: That is just for Fightland, that particular production loan. We look. It's very cost-effective, cost to capital, so we like to use those. They line up, help us line up our cash flows with those shows. You know, as we greenlight the new shows coming up here, we would expect to have production loans for those shows. It will take a time to, you know, as those will build up over time. You know, at some point, you know, the show will be complete, and you'll repay the loan. Should be end up being a fairly consistent balance after we get through the end of this year.

Speaker #8: That is just for Fight Land, that particular production loan. We look. It's very cost-effective, cost of capital. So we like to use those a line to help us line up our cash flows with those shows.

Speaker #8: As we greenlight the new shows coming up here, we would expect to have production loans for those shows. It will take a time to as those will build up over time.

Speaker #8: But at some point, the show will be completed, and you'll repay the loan. So it should end up being a fairly consistent balance after we get through the end of this year.

Speaker #8: Okay. Thank you. Thanks.

Katori Hall: Thank you.

David Joyce: Thank you.

Jeffrey Hirsch: Thanks.

Nilay Shah: Thanks. David, operator, could we get the next question, please?

Speaker #10: David, operator, could we get the next question, please?

Operator: David, operator, could we get the next question, please? Thank you. Our next question comes from Vikram Kesavabhotla with Baird. You may proceed.

Speaker #9: Thank you. Our next question comes from Vikram. Casavolta with Baird. You may proceed.

Operator: Thank you. Our next question comes from Vikram Kesavabhotla with Baird. You may proceed.

Speaker #11: Yeah. Hey, thanks for taking the questions. I wanted to follow up on the co-commission deal with SKY. Can you talk more about why they were the right partner?

Vikram Kesavabhotla: Yeah. Hey, thanks for taking the questions. Wanted to follow up on the co-commission deal with Sky. Can you talk more about why they were the right partner? From a higher level, you know, when you look at the content slate that you have planned, how would you characterize the demand environment for your programming internationally?

Speaker #11: And from a higher level, when you look at the content slate that you have planned, how would you characterize the demand environment for your programming internationally?

Jeffrey Hirsch: Hey, Vikram. Jeff, thanks for the question. Look, we think that we've seen in the past when we were in the international business before, that the UK market is an incredible market for all of our shows. Over time, that has actually expanded in France as well. We think there's a real big appetite for our content in some of the biggest international markets. We've had a great relationship with Sky. We've licensed Amadeus from them, we've licensed Sweetpea from them, we have an ongoing relationship with them. I think they're very interested in what we have in production, I think there's others that will be as well. I think the slate that we've designed, we've obviously designed it with international revenue in mind.

Speaker #8: Hey, Vikram and Jeff, thanks for the question. We think that we've seen in the past when we were in the international business before that the UK market is an incredible market for all of our shows.

Speaker #8: And over time, that has actually expanded in France as well. And so we think there's a real big appetite for our content in some of the biggest international markets.

Speaker #8: We've had a great relationship with SKY. We've licensed Amadeus from them. We've licensed Sweet Pea from them. And so we have an ongoing relationship with them.

Speaker #8: I think they're very interested in what we have in production. And I think there's others that will be as well. And so I think the slate that we've designed, we've obviously designed it with international revenue in mind.

Speaker #8: And I expect that to continue to grow as we get more ownership back onto the network and own our own library.

Jeffrey Hirsch: I expect that to continue to grow as we get more ownership back onto the network and own our own library.

Speaker #11: Okay. That's helpful. And then you referenced the pricing strategy a few times in your previous answers. Can you just elaborate more on your plot to be there?

Vikram Kesavabhotla: Okay. That's helpful. Yeah, you referenced the pricing strategy a few times in your previous answers. Can you just elaborate more on your thoughts there? I mean, do you think there's one way for you to raise price on your subscriptions over time? How do you plan to manage the cadence of that going forward?

Speaker #11: I mean, do you think there's one way for you to raise price on your subscriptions over time? And how do you plan to manage the cadence of that going forward?

Speaker #8: Yeah. So as we've said, and we'll continue to say, we're a complementary service. We've always wanted to be underpriced way underpriced of the broad-based streamers out there.

Jeffrey Hirsch: Yeah. As we've said, we'll continue to say, we're a complimentary service. We've always wanted to be underpriced, way underpriced to the broad-based streamers out there. As they continue to raise rate, it gives us room to raise rate. You've seen the broad-based streamers raise anywhere from $1 to 3 over the last couple of years. It's created a lot of room for us to have some pricing power against the broad-based streamers. We'll continue to look at that, you know, right time, right place, right slate to determine whether that's right for our consumers. We'll watch the industry, watch the broad-based streamers, we'll make decisions based on where we think that's right to drop that in.

Speaker #8: And so as they continue to raise rate, it gives us room to raise rate. You've seen the broad-based streamers raise anywhere from 1 to 3 dollars over the last couple of years.

Speaker #8: So it's created a lot of room for us to have some pricing power. Against the broad-based streamers. And we'll continue to look at that.

Speaker #8: Right time, right place, right slate to determine whether that's right for our consumers. So we'll watch the industry, watch the broad-based streamers, and we'll make decisions based on where we think that's right to drop that in.

Speaker #11: Okay. Great. Thank you.

Vikram Kesavabhotla: Okay, great. Thank you.

Speaker #10: Thanks, Vikram. Operator, could we get the next question, please?

Operator: Thanks, Vikram. Operator, could we get the next question, please? Thank you. Our next question comes from David Karnovsky with J.P. Morgan. You may proceed.

Nilay Shah: Thanks, Vikram. Operator, could we get the next question, please?

Operator: Thank you. Our next question comes from David Karnovsky with J.P. Morgan. You may proceed.

Speaker #9: Thank you. Our next question comes from David Karnofsky with JP Morgan. You may proceed.

Speaker #8: Hi. Doug Wardlaw, on for David. I just wanted to get an idea of how you guys think about relying on spin-offs or reliable shows like Power and Outlander versus new originals.

Doug Wardlaw: Hi, Doug Wardlaw on for David. I just wanted to get an idea of how you guys think about relying on spin-offs of reliable shows like Power and Outlander versus new originals. Obviously each piece of content kind of plays a large part on what sub-growth looks like in the quarter. I guess long term, how do you weigh starting a new show versus a spin-off of a sure thing? Thanks.

Speaker #8: Obviously, each piece of content kind of plays a large part on what sub-growth looks like in the quarter. So I guess long-term, how do you weigh starting a new show versus a spin-off of a show thing?

Speaker #8: Thanks.

Speaker #12: Thanks for the question. I mean, franchising here at Stars is a real kind of power of ours. I think as you know, we've successfully franchised Power into three successful spin-offs and one currently in production.

Alison Hoffman: Thanks for the question. I mean, franchising here at STARZ is a real kind of power of ours. I think we, you know, as you know, we've successfully franchised Power into 3 successful spin-offs and one currently in production. These are really reliable drivers of engagement, drivers of acquisition for the business. Same with Outlander. You know, we're so proud that Outlander has been on the air, you know, since 2014 and still drives a huge engaged fan base, and we successfully launched Blood of My Blood last season. What they also provide is a real platform or lead in for new shows.

Speaker #12: And these are really reliable drivers of engagement, drivers of acquisition for the business. Same with Outlander. We're so proud that Outlander has been on the air since 2014 and still drives a huge engaged fan base.

Speaker #12: And we successfully launched Blood of My Blood last season. But what they also provide is a real platform or lead-in for new shows. And so what you'll see is you'll see us using these reliable franchises to launch new IP and establish new IPs with audiences so that we can bring thread audiences from one show to the next as we're marketing and expanding our CAM with new audiences.

Alison Hoffman: You know, what you'll see is you'll see us using these reliable franchises to launch new IP and establish new IPs with audiences so that we can bring, thread audiences from one show to the next as we're marketing and expanding our CAC with new audiences. You know, thank you for the question. I think it's a real part of our programming strategy, and it's something that we think a lot about in terms of how we make investments and how we schedule.

Speaker #12: So I think it's a real thank you for the question. I think it's a real part of our programming strategy. And it's something that we think a lot about in terms of how we make investments and how we schedule.

Speaker #8: Great. Thank you.

Doug Wardlaw: Great. Thank you.

Speaker #10: Thanks, Doug. Operator, could we get the next question, please?

Operator: Thanks, Doug. Operator, could we get the next question, please? Thank you. The last question will come from Matthew Harrigan with Benchmark. You may proceed.

Nilay Shah: Thanks, Doug. Operator, could we get the next question, please?

Operator: Thank you. The last question will come from Matthew Harrigan with Benchmark. You may proceed.

Speaker #9: Thank you. And the last question will come from Matthew Harrigan with Benchmarke. You may proceed.

Speaker #8: Well, thank you. I should probably apologize for laboring you with this one. But what's your reaction to Sea Dance that costs a lot of volatility in the markets?

Jeffrey Hirsch: Oh, thank you. I should probably apologize for belaboring you with this one, but what's your reaction to DeepSeek? It caused a lot of volatility in the markets. Are there benefits, or I guess speaking more broadly, do you see more benefits from you on the AI side as far as development? I guess secondly, how's the development process differing from when you're under the, what Lionsgate's, you know, weighing? I mean, what parameters are you emphasizing or maybe a little bit different in terms of moving faster or adapting to your demographic even more precisely? Thanks. Hey, Jeff, thanks for the question.

Matthew Harrigan: Oh, thank you. I should probably apologize for belaboring you with this one, but what's your reaction to DeepSeek? It caused a lot of volatility in the markets. Are there benefits, or I guess speaking more broadly, do you see more benefits from you on the AI side as far as development? I guess secondly, how's the development process differing from when you're under the, what Lionsgate's, you know, weighing? I mean, what parameters are you emphasizing or maybe a little bit different in terms of moving faster or adapting to your demographic even more precisely? Thanks. Hey, Jeff, thanks for the question.

Speaker #8: Are there benefits for, I guess, speaking more broadly, do you see more benefits from you on the AI side, as far as development? And I guess secondly, how's the development process differing from when you were under the Lionsgate's wing?

Speaker #8: I mean, what parameters are you emphasizing or maybe a little bit different in terms of moving faster or adapting to your demographic even more precisely?

Speaker #8: Thanks.

Speaker #10: Hey, Jeff. Thanks for the question. I think on the first one—look, AI is going to be a very powerful tool to enhance the business.

Jeffrey Hirsch: I think on the first one, you know, look, AI is gonna be a very powerful tool. To enhance the business, you know, I think there's three or four areas that we're using it today. Obviously, with content and reducing costs, we used it with Spartacus for some of the large scenes in Spartacus, I think very successfully. You know, on the boring side, I think you can do a lot of, you know, internal training with AI that you would have to do, you know, and waste hours of employees.

Speaker #10: I think there are three or four areas that we're using it today. Obviously, with content and reducing costs, we used it with Spartacus for some of the large scenes in Spartacus.

Speaker #10: I think very successfully. On the boring side, I think you can do a lot of internal training with AI that you would have to do and waste hours of employees again.

Jeffrey Hirsch: Again, for us, with, you know, a large scale D2C business that has over 10 years of acquisition data, retention data, pricing data, that coupled with, you know, all of the content we have and how to schedule that content to best align around lifetime value and customer churn and marrying all those key KPIs together, with, you know, hundreds of millions of datasets. I think the AI tools can really help us be efficient and continue to drive profitability for our business. I do believe it will be an additional tool for the industry. Again, this is a lot still more art than it is science, and I think the creative process will continue to be that way.

Speaker #10: For us, with a large-scale D2C business that has over 10 years of acquisition data, retention data, pricing data, that coupled with all of the content we have and how to schedule that content to best align around lifetime value and customer churn and marrying all those key KPIs together, with hundreds of millions of data sets, I think the AI tools can really help us be efficient and continue to drive profitability for our business.

Speaker #10: I do believe it will be an additional tool for the industry. And I don't again, this is a this is a lot still more art than it is science.

Speaker #10: And I think the creative process will continue to be that way, and we're excited to use it as a tool. But I think the business has really grown on the success of the uniqueness of our originals.

Jeffrey Hirsch: We're excited to use it as a tool, but, you know, I think the business is really grown on the success of the uniqueness of our originals, and I think that's hard to replicate. We're excited about that. From a second question, you know, Look, Lionsgate is a tremendous producer of television. We've had a great nine-year run with Kevin and team. I think that will continue based on the Power universe that we're still locked on the hip on. I don't expect that relationship to change. I think as we go out and start to rebuild our own, you know, our own library again, it gives us the ability to control front-end costs a little better with direct line to the producing partner that way.

Speaker #10: And I think that's hard to replicate, and so we're excited about that. From a second question, it's—look, Lionsgate is a tremendous producer of television.

Speaker #10: We've had a great nine-year run with Kevin and team. And I think that will continue based on the power universe that we're still locked on the hip on.

Speaker #10: And so I don't expect that relationship to change. I think as we go out and start to rebuild our own library again, and it gives us the ability to control front-end costs a little better with direct line to the producing partner.

Speaker #10: That way, it also allows us to really get that incremental revenue stream from international that we weren't getting as part of being owned by a studio.

Jeffrey Hirsch: It also allows us to really get that incremental revenue stream from international that we weren't getting as part of being owned by a studio. Those are probably the two biggest components that we have, you know, a little more control with our team and a little more revenue on the other side. But again, we're still pretty much locked at the hip with Lionsgate on a lot of our big shows. As I said, you know, they're our sales agent for internationally. They're over in London today, and I think, you know, Packer continues to do a great job maximizing revenue for us there. I expect that relationship to continue for a long time, and, you know, we're excited about that.

Speaker #10: And so those are probably the two biggest components that we have. A little more control with our team and a little more revenue on the other side.

Speaker #10: But again, we're still pretty much locked at the hip with Lionsgate on a lot of our big shows. As I said, there are sales agents for internationally.

Speaker #10: They're over in London today, and I think Packer continues to do a great job maximizing revenue for us there. So, I expect that relationship to continue for a long time.

Speaker #10: And we're excited about that.

Speaker #8: Thanks, Jeff. Be interesting to see what your stock does now. Thanks.

Katori Hall: Thanks, Jeff. Be interesting to see what your stock does now. Thanks.

Matthew Harrigan: Thanks, Jeff. Be interesting to see what your stock does now. Thanks.

Speaker #10: Thank you.

Speaker #9: Thank you. I would now like to turn the call back over to Nilay for any closing remarks.

Operator: Thank you. I would now like to turn the call back over to Nilay for any closing remarks.

Speaker #10: Thank you, operator. And thank you, everyone. Please refer to the News and Events tab under the Investor Relations section of our website for discussion of certain non-GAAP forward-looking measures discussed on this call.

Nilay Shah: Thank you, operator, and thank you, everyone. Please refer to the News and Events tab under the Investor Relations section of our website for a discussion of certain non-GAAP forward-looking measures discussed on this call. Thanks, everyone.

Speaker #10: Thanks, everyone.

Speaker #9: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

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Speaker #11: It's hard to get a start in these parts without paper. Homie, I grew up in hell. A block away from heaven. That corner 815 minutes, it move a 7.

Speaker #11: Pure snow, baggage and watch it go. Occupational options, get some blow-ups from hoes. Shoot the ball or the strap, learn to rap or the jack.

Speaker #11: Fuck it, man, in the meantime, go ahead and pump a pack. This my regal royal flow. My James Bond bounce. That double 07 at 62 on my count.

50 Cent: This my Regal Royal flow, my James Bond ounce. That double-O-seven, that 62 on my count. I'm an undercover liar, I lie under the covers. Look a bitch in the eyes and tell her, "Baby, I love you." You're my inspiration, you're my motivation. You're the reason that I'm moving with no hesitation. They say this is a big bridge town. Yeah. I just come from the poorest part. Bright light, city life, I gotta make it. This is where it goes down. Oh. Yeah. I just happened to come up hard. Legal or illegal, baby, I gotta make it. Sing me a song of a lass that is gone. Say, could that lass be I? Merry of soul, she sailed on a day. Over the sea to Skye. Pillow and breeze, islands and seas, mountains of-

Operator: This my Regal Royal flow, my James Bond ounce. That double-O-seven, that 62 on my count. I'm an undercover liar, I lie under the covers. Look a bitch in the eyes and tell her, "Baby, I love you." You're my inspiration, you're my motivation. You're the reason that I'm moving with no hesitation. They say this is a big bridge town. Yeah. I just come from the poorest part. Bright light, city life, I gotta make it. This is where it goes down. Oh. Yeah. I just happened to come up hard. Legal or illegal, baby, I gotta make it. Sing me a song of a lass that is gone. Say, could that lass be I? Merry of soul, she sailed on a day. Over the sea to Skye. Pillow and breeze, islands and seas, mountains of-

Speaker #11: I'm an undercover liar. I lie under the cover. Look a bitch in the eyes and tell her, "Baby, I love it." You're my inspiration.

Speaker #11: You're my motivation. You're the reason that I'm moving with no hesitation.

Speaker #12: This is a big rich town. Yeah. I just come from the poets' part. Bright light city life, I got to make it. This is where it goes down.

Speaker #12: Yeah. I just happened to come up hard. Legal or illegal, baby, I got to make it.

Speaker #13: Sing me a song of a lass that is gold. Say could that lass be I? Mary of soul, she sailed on a day. Over the sea to sky.

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