Good day, everyone, and welcome to the STARZ's S econd 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 participate, you will need to press star one one on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star one one again. Please note, this conference is being recorded. Now, it's my pleasure to turn the call over to Nilay Shah with STARZ Investor Relations. Please go ahead. Good afternoon. Thank you for joining us for STARZ Entertainment's Fiscal 2025 Second Quarter 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-K 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. 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. Thank you, Nilay. Thank you, everyone, for joining us today. Before getting into the details behind the quarter, I want to give everyone an update on how I see STARZ as positioned in the ever-changing media landscape. As I laid out last quarter, STARZ is a highly profitable digital-first network that is able to punch above its weight class because it has remained focused on catering to two valuable demos of women and underrepresented audiences. Unlike our peers, STARZ took a distribution-agnostic approach to streaming. This resulted in a profitable transition and a business that has delivered consistently strong adjusted OIBDA performance. We believe this decision not to follow the herd has positioned STARZ to be a very straightforward and predictable investment story. The investment case hinges on modest top-line and domestic OTT subscriber growth, coupled with lower content spend. We believe this combination should drive three key outputs: one, higher adjusted OIBDA margins; two, higher free cash flow; and three, lower leverage. Given these business drivers, combined with our outlook of generating approximately $200 million of adjusted OIBDA in calendar 2025 and converting 70% of adjusted OIBDA to unleveraged free cash flow during calendar 2026, we see our current valuation of approximately 4x adjusted OIBDA as very attractive. We believe this valuation disconnect will become more apparent in the coming quarters when several large media companies spin off their linear networks into standalone public companies. It's worth noting that even though these linear networks are heavily dependent on linear advertising and have immaterial digital revenue, most Wall Street analysts are valuing these businesses at similar or higher multiples than STARZ, making us a great value. Turning to the operating fundamentals, we delivered adjusted OIBDA and revenue results inside our expectations despite some underperformance of BMF Season 4. While the season still drew a large audience, it didn't maintain the expected scale relative to our anticipated performance for the series. This resulted in modest sequential declines in OTT subscribers and revenue, which Scott will go into detail momentarily. Now more than ever, our priority continues to be laser-focused on making great stories that also drive the business. We are thrilled to report that our highly anticipated and critically acclaimed Outlander prequel, Blood of My Blood, is already exceeding expectations. It has generated the third-highest number of subscriber additions for a series premiere in STARZ history, and viewership has exceeded the last episode of Outlander Season 7 by 40%. This impressive performance out of the gate has resulted in strong subscriber growth, and importantly, we are adding these subscribers with higher price promotions than the prior season of Outlander. Based on this momentum, we remain confident in our expectations of sequential revenue growth and OTT subscriber growth in the September and December quarters. Following Blood of My Blood, the slate features high-performing returning tentpoles such as Force and Raising Kanan, alongside the premiere of Spartacus, which is returning to the service after 12 years. With this tentpole-heavy slate combined with a strong film lineup that includes Ballerina and Oppenheimer, we expect to finish the year from a position of strength, setting us up for continued revenue growth in calendar 2026. Looking forward, we will bring audiences several long-awaited premieres, including the final season of Outlander, P-Valley Season 3, as well as the launch of the new Power prequel series, Origins, which will have a supersized 18-episode premiere season. We are also excited to bring our first STARZ-owned and produced show, Fightland, to our viewers. In short, this is one of the most compelling content slates that STARZ has had in several years. Most importantly, the slate is being delivered at superior economics on a per-episode basis relative to prior years. We expect the structural improvement in our content cost will build over the next several quarters. This is a key tenet to our investment case and bolsters our confidence that we can reach our 20% margin target run rate coming out of calendar 2028. Given the strength of our slate we outlined, the stability of our streaming-first operating model, and our improving content cost structure, we are excited about the outlook of our business and believe STARZ is the most misunderstood and undervalued stock in our sector. Now, Scott will take you through our key metrics and financial results. Scott? Thanks, Jeff, and good afternoon, everyone. I will walk through the financial and operational highlights from the June quarter for STARZ Networks, which includes our operations in the United States and Canada. I will also provide an update on our balance sheet. STARZ Networks ended the quarter with 12.18 million U.S. OTT subscribers, a sequential decline of 120,000. The decline in the quarter was primarily driven by lower subscriber additions resulting from underperformance of BMF Season 4, as Jeff noted. We ended the quarter with 19.08 million total North American subscribers, down 520,000 sequentially. The linear subscriber base declined to 6.22 million, reflecting continued declines in pay-TV households. Total revenue for the quarter was $319.7 million, down 2% sequentially and 7.4% year-over-year. OTT revenue was $221.1 million, while linear and other revenue came in at $98.6 million. The year-over-year and sequential revenue declines resulted from lower OTT subscriber additions and continued linear pressure. Looking forward, as Jeff noted, we are already seeing improved subscriber trends due to the successful premiere of Outlander, Blood of My Blood. We continue to expect sequential revenue and OTT subscriber growth in the next two quarters. Adjusted OIBDA was $33.4 million and was expected to be down from the $92.0 million in the March quarter. The sequential decline was primarily due to higher content amortization related to the airing of six episodes of Raising Kanan Season 4 and the premiere of BMF Season 4 during the quarter. We ended the quarter with $573.5 million in total net debt, down $42.1 million on a sequential basis. Debt includes $300 million of our Term Loan A and $325.1 million of our senior unsecured notes, less $51.6 million in cash. We had no borrowings outstanding under our $150 million revolving credit facility at the end of June. Our leverage on a trailing 12-month basis was 3.2x for the quarter. We expect leverage to increase to approximately 3.5x in the September quarter due to the timing related to content payments, but we continue to expect to exit the year with leverage around 3.1 x. As we mentioned on our last call, we view 2025 as a transition year for our cash flow, which we now directly manage. For the remainder of 2025, we will have some ebbs and flows in the timing of our content payments before we get back to a more normal payment flow during 2026. This will set us on a good path to deleverage, which will be our focus during 2026 and 2027. As a result of the passage of the One Big Beautiful Bill Act, interest deductions previously deferred will now be currently available to us to reduce any federal tax liability. Accordingly, when combining this favorable change in the tax law with previously existing NOLs, we do not anticipate having any significant federal cash tax payments in the foreseeable future. We are very excited about the future here at STARZ. Now I'd like to turn the call back over to Nilay for Q&A. Nilay? Thanks, Scott. Operator, can we open the call up for Q&A, please? Thank you so much. As a reminder, to ask a question, simply press star one one on your telephone and wait for your name to be announced. To remove yourself, press star one one again. One moment for our first question. It's from the line of Brent Penter with Raymond James. Please proceed. Hey, everyone. Thanks for taking the questions. Jeff, appreciate the comments on M&A and the industry landscape. How do you all think about what defines scale in this business? If you were to participate in M&A, are there any prerequisites that you would want to achieve before pursuing that, whether that be your leverage target, improving your equity valuation, any sort of operational metrics, or anything else that you would want to achieve before really actively pursuing M&A? Hey, Brent. Thanks for the question. First of all, I think we have a pretty clear plan of deleveraging and getting to a 20% margin business coming out of calendar 2028. Whether we participate or not in M&A, we will continue to focus on delivering that plan to our investors and to the business. I'm not going to really comment deeply on M&A, but what I would say is we think we've built a very valuable business, both with the serving of the two core demos that we are kind of the destination for. We have a phenomenal tech backend and a data stack that I think is unparalleled in the business. That makes us a very valuable asset, but it also sets us up to be a very strong platform to scale around. I would think we like the demos we serve today. We think there's a lot of opportunity in those demos to expand outside of the subscription business, but still stay focused in those demos. I do think in the next, as other peers unwind their businesses and figure out who they are, there will be a lot of opportunity for us to scale our business in the next 12- 24 months. Okay. Got it. On the 20% EBITDA margin goal by 2028, you laid out last quarter kind of the path of how you get there on your content costs. If we get to 2028, and you've done better than that, what would be the likeliest reason? If we get to 2028 and you haven't quite hit that 20% margin, what would be the likeliest reason? What would cause you to overachieve or underachieve that expectation? Great question. Look, I think there's really two core, you know, the big, there's two kind of core ways to get to the 20%. The biggest way is actually turning the slate over, de-aging it, and getting ownership back on the network. We have announced and we'll start production on Fightland. We talked about it being our first STARZ -owned and produced show. If you look at the season one of Fightland, the season one per hour episode cost is 30% lower than what we've seen in season one premieres on STARZ over the last couple of years. Right off the bat with the first show, we're seeing a significant reduction in cost structure. If you think about us getting to half of our slate, four shows by 2027, where we'll have ownership on that scale, you can see there's a real opportunity to put a lot of dollars to the OIBDA line. The other piece is we haven't even factored in the international sales of Fightland. That's incremental dollars to the business. As long as we continue to execute against the strategy of turning over the slate, getting ownership, and de-aging, we'll hit that number coming out of calendar 2028. I do think there's some other opportunities for us to take cost off the business. The other side of it is obviously revenue growth. We've talked about how revenue will start to grow again in third and fourth quarter and in calendar 2026. If we can start to grow the top line again to 1%- 3% on top of cost controls on the content side, I think we can actually hit that number. We will be opportunistic. If we see some content that comes in that we think will really help the business, we will probably make a decision to put that on. Right now, I think we're simply laser-focused on trying to grow top line, but also get the cost structure of content into that $600 million- $650 million range. That puts us at 20% coming out of calendar 2028. Okay. Great. Thanks, Jeff. Thank you. Our next question comes from David Joyce with Seaport Research Partners. Please proceed. Thank you. A couple, if I could. First on BMF, can you pinpoint what didn't work with that this time that, you know, made it miss your expectations? What would you adjust since, you know, having a spin-off and franchise new strategy that is important for you going forward? Secondly, I wanted to ask on the ARPU that was above our expectations. If you could just go through the puts and takes of price increases in your different distribution relationships and how that's impacting ARPU. Thanks. Great for the question. To start off, BMF was still a very large show for us. It just wasn't at the expectation we had in for growth in the quarter, and it was really a gross ads issue. I don't think there's one thing that we can pinpoint to it. We did see some softness toward the end of season three, and we thought we had corrected it in the story. That's not to say that there was not a lot of different things that went into the softness on gross ads for BMF. We do have two BMF similar type shows in development with Lionsgate. We like both those shows. We have the last episode airing tonight, and we'll do what we normally do, which is get into the postmortem on a show with the showrunners and do analysis and see whether it comes back or not. We do have a lot of great content in development. We talked about Kingmaker. We talked about obviously Fightland that's coming, and we have a lot of opportunity to put shows on the air that I think serve that audience on scale that we can own. While I really was hoping that it would perform better, it's been a great show for us for the three years we've had it. We did see some softness in gross ads around that. Yeah, with respect to ARPU, this is Scott. It's been fairly consistent quarter over quarter on a year over year basis, which we think is relatively good for the business. When you look at ARPU, we were down just a little bit this quarter, primarily due to more customers on multi-month type offers. We really like that kind of transition and getting more of a mix of that because that does help us with reducing churn over time. I think to your question about rate and distribution relationships, we are set up to be a complimentary service and sold with our partners. We make a lot of money for our partners. 80% of our customer base is either à la carte or revenue share, which means two things. One, customers are choosing STARZ because the content is working, and two, we're making money for our partners. We've got a really good relationship with our partners there. We have done two rate increases in the last two years. We do not have any plans to do a rate increase this year or next year. We do think there's going to be a lot of new distribution platforms coming online next year that will allow us to continue to grow the top line through subscriber growth and not have to go to the rate thing to grow the business. Great. Thank you. Our next question comes from David Karnovsky with JP Morgan. Please proceed. Hey, thank you. Jeff, with Blood of My Blood, maybe you can expand a bit on how much of Outlander's audience or sub-base you think you've been able to carry over. Maybe just more broadly, what kind of underlies your confidence that you can continue to transition, you know, audiences to these new iterations of prior franchises? Maybe you can talk a bit to your track record here. Thank you. Yeah, you know, I'm going to let Alison talk about Blood of My Blood and the track record, and then I'll jump in as well. Yeah, thanks for the question. I think successful franchising is a real power here at STARZ. Just for reference, our spin-offs, sequels, prequels typically deliver more than 85% of the original season's audience. That compares to the industry that usually sees about half the audience go to sequels and spin-offs and prequels. We're very good at this. The programming team and the producing teams work well together to do this and to really expand the storyline, make sure that there's story to tell, that there's characters that the audiences want to see. I think with Blood of My Blood, that was very intentional as a prequel. The idea is to serve the Outlander audience really well in all of the things that they're looking for, time travel, history, fantasy, and of course, romance, but also make it very accessible to a new audience. You don't have to have seen Outlander to love Blood of My Blood. That's just what we're seeing. I think with the stats that Jeff noted, we're seeing a 40% lift over the final episode of Outlander. That means new audiences are coming in for this story, and we're carrying over successfully the Outlander audience. That's really exciting for us to see. I think that's something that we are actually kind of accustomed to seeing based on this sort of machine we've built around franchising at the network. Thank you. One moment for our next question. It comes from Matthew Harrigan with The Benchmark Company. Please proceed. Thank you. I think we have some Southside group thing going because most of my questions were already asked. I was curious on Spartacus. It's been 12 years. The swords and sandals, you know, shows and movies sometimes work really well. Sometimes they don't. Obviously, Peacock had a fairly racy entry in that genre fairly recently. What gives you the confidence that there's that much awareness of it still? How do you get it to resonate with the urban and female demographic? Do you have, you know, fairly, I don't know, I'm sure you're not going to say you have lofty expectations for it, but is this something that you think could be a fairly long-running series? Secondly, I know it's absurdly early, but how would you characterize the changes in your relationship with Lionsgate television, you know, thus far, structurally, mechanically, and I guess, socially, even though it's been just a few weeks out of the blocks? Thanks. Great question. I think, you know, I've been at STARZ now 10 years, and I don't think there's ever a time where I travel somewhere and somebody asks me, you know, when is Spartacus coming back? I think it's one of the network-defining shows that we have. I think everybody in the building gets asked about Spartacus all the time. That's one of the reasons why we decided to bring it back after 12 years, because there is such this swell of people outside the building looking for it to come back. If you look at the research that we've done around the show, again, the existing customers and new customers show that there's an incredible desire for us to put the show on the air and see it. If you look socially, since Comic-Con and, you know, it's down at Comic-Con, you can just see the intensity around the show and Stephen DeKnight online right now. There is insane intensity around when it's coming back, when it's going to air. We feel pretty good that, you know, what we're seeing from the market outside, there's a real desire to have that show back on the air. I think one of the things that we've done differently in this iteration of Spartacus is we have an African- American female gladiator in the show. The hope with that is for us to then be able to merge some of our existing core demos into the show. I think the story is as traditional Spartacus as it's ever been. We've had the original crew, you know, in terms of [Stephen DeKnight] and crew doing it, Karen Bailey on our team here that we worked on the original, worked on it again. We were back in New Zealand. It has all the markings of a great Spartacus. We're excited for it to come back on the air. Oh, and the relationship. Oh, and then the relationship with Lionsgate. I think the relationship's been great. I think having some natural, typical hand, arm's length real relationship now has been good. We continue to talk about various shows. We just picked up another show with them. Obviously, Spartacus we're doing with them. We did 18 episodes of Origins, the Power spin-off with them. That was a really interesting, I think, collaboration to get to a price point that we got to 18 episodes. The relationship there has been great. I think it hasn't really been much of a change. Obviously, we have a lot of business with them. We have to pay one. Excited for Ballerina to come on the air. There's still some good overlap with Lionsgate folks on the boards, on both boards. I think the relationship is as strong, if not better, than it was before we separated. I'm sure your black female gladiator will be just as hard to kill as John Wick. Thanks. That sounds great on Spartacus. My hope is she's a little more aggressive than the Baba Yaga, for sure. Thank you. Ladies and gentlemen, this concludes our Q&A session. I will turn it back to Nilay Shah for additional comments. 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. Thank you. This concludes our conference call. Thank you all for participating. You may now disconnect.