Organic growth of 23.9% year-over-year in Broadcast and Recurring Commercial Music Revenues mainly due to strength in retail media advertising;
Revenues increased 12.4% to $100.3 million from $89.2 million;
Adjusted EBITDA(1) increased 12.2% to $38.6 million from $34.5 million. Adjusted EBITDA by segment was $27.9 million or 42.5% of revenues for Broadcasting and Commercial Music, $12.3 million or 35.6% of revenues for Radio and $(1.6) million for Corporate;
Net income was $9.1 million ($0.13 per share(1)) compared with $12.9 million ($0.19 per share(1));
Adjusted Net income(1) increased to $18.5 million ($0.27 per share(1)) compared with $16.5 million ($0.24 per share(1));
Cash flow from operating activities increased 25.6% to $30.9 million ($0.45 per share(1)) compared to $24.6 million ($0.35 per share(1));
Adjusted free cash flow(1) increased 80.6% to $32.7 million ($0.47 per share(1)) compared to $18.1 million ($0.26 per share(1));
Net debt to Pro Forma Adjusted EBITDA(1) ratio of 2.99x, compared with 3.34x;
810,000 streaming subscribers, up 0.6% over Q3 2023; and
372,400 shares repurchased and cancelled for a total of $1.9 million, compared with 340,900 shares repurchased and cancelled for a total of $1.6 million.
MONTREAL, Feb. 06, 2024 (GLOBE NEWSWIRE) — Stingray Group Inc. (TSX:RAY, RAY.B)) (the “Corporation”; “Stingray”), an industry leader in music and video content distribution, business services, and advertising solutions, announced today its financial results for the third quarter of fiscal 2024 ended December 31, 2023.
Financial Highlights
(in thousands of Canadian dollars, except per share data)
Three months ended
December 31
Nine months ended
December 31
2024
2023
%
2024
2023
%
Revenues
100,278
89,242
12.4
261,763
245,013
6.8
Adjusted EBITDA(1)
38,648
34,450
12.2
96,432
87,567
10.1
Net income
9,070
12,944
(29.9
)
32,577
25,672
26.9
Per share – diluted ($)
0.13
0.19
(31.6
)
0.47
0.37
27.0
Adjusted Net income(1)
18,483
16,464
12.3
44,930
40,534
10.8
Per share – diluted ($)
0.27
0.24
12.5
0.65
0.58
12.1
Cash flow from operating activities
30,902
24,605
25.6
74,263
59,397
25.0
Adjusted free cash flow(1)
32,655
18,085
80.6
66,690
48,753
36.8
(1) This is a non-IFRS measure and is not a standardized financial measure. The Corporation’s method of calculating such financial measures may differ from the methods used by other issuers and, accordingly, the definition of these non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Refer to “Non-IFRS Measures” on page 4 of this news release for more information about each non-IFRS measure and refer to pages 5-6 for the reconciliations to the most directly comparable IFRS financial measures.
Reporting on third quarter results for fiscal 2024, Stingray’s President, co-founder and CEO Eric Boyko stated:
“Stingray delivered exceptional third-quarter results, surpassing the $100-million revenue mark for the first time in the company’s history while generating adjusted EBITDA of $38.6 million and adjusted free cash flow of $32.7 million. This outstanding operating performance was driven by organic growth of 23.9% year-over-year in Broadcast and Recurring Commercial Music revenues, including a combined 84.3% increase in retail media and FAST channel advertising revenues. We are trailblazers in the retail media advertising industry, providing large retailers with a technology platform that carries customizable ads across a digital network every few minutes to fully monetize the presence of in-store consumers. The response from the vast U.S. market has been remarkable with overall Stingray sales growing 39.7% south of the border in the third quarter. On the FAST channel side, we nearly doubled listening hours sequentially to 29 million through the integration of 18 new Stingray channels on Samsung TV Plus in the U.S. during two-plus months in Q3 2024.”
“Turning to in-car entertainment, the initial deployment of Stingray Karaoke in 300,000 BYD cars is steadily progressing and we further expanded our partnership with the world’s leading manufacturer of new energy vehicles through the launch of Calm Radio in models across dozens of countries. This latest agreement is highly significant because it diversifies our automobile product offering into the wellness space to enhance the driver’s journey, while highlighting our emerging relevance in the global in-car entertainment landscape.”
“Altogether, revenues for our Broadcasting and Commercial Music business increased 21.2% to $65.6 million in the third quarter of 2024, while Radio revenues remained relatively stable year-over-year at $34.6 million as we continued capturing share in local markets through our direct sales force. Given sustained, robust financial results, we are confident Stingray will continue to generate strong revenue growth in fiscal 2025 with a similar margin profile,” Mr. Boyko concluded.
Third Quarter Results
Revenues increased $11.1 million, or 12.4%, to $100.3 million in Q3 2024 from $89.2 million in Q3 2023. The year-over-year increase was largely due to growth in retail media advertising and FAST channel revenues.
For the quarter, revenues in Canada rose $1.6 million, or 3.1%, to $51.0 million from $49.4 million in Q3 2023. The increase mainly reflects heightened retail media advertising revenues.
Revenues in the United States grew $10.5 million, or 39.7% year-over-year, to $37.1 million in Q3 2024 from $26.6 million in Q3 2023. The growth can be attributed to the strength of retail media advertising and FAST channel revenues.
Revenues in Other countries decreased $1.0 million, or 7.8%, to $12.2 million in Q3 2024 from $13.2 million in Q3 2023. The year-over-year decline was caused by lower audio channel revenues as well as less in-store commercial revenues due to the restructuring of the division. These factors were partially offset by a positive foreign exchange impact.
Broadcasting and Commercial Music revenues increased $11.4 million, or 21.2%, to $65.6 million in Q3 2024 from $54.2 million in Q3 2023. The growth was primarily driven by higher retail media advertising and FAST channel revenues. Radio revenues decreased $0.5 million, or 1.3%, to $34.6 million in Q3 2024 from $35.1 million in Q3 2023 as local and national agency airtime advertising dropped year-over-year, partially offset by increases in local direct revenues.
Consolidated Adjusted EBITDA(1) improved $4.1 million, or 12.2%, to $38.6 million in Q3 2024 from $34.5 million in Q3 2023. The growth in Adjusted EBITDA(1) was mainly due to higher revenues. Adjusted EBITDA margin(1) reached 38.5% in Q3 2024 compared to 38.6% in the same period in 2023, the slight decline was due to the decrease in Adjusted EBITDA(1) in the Radio segment.
Net income totaled $9.1 million ($0.13 per share) in Q3 2024 compared to $12.9 million ($0.19 per share) in Q3 2023. The decrease was mainly driven by an unrealized loss on derivative financial instruments and by higher performance and deferred share units expense related to a share price increase. These factors were partially offset by higher operating results and lower income taxes.
Adjusted net income(1) reached $18.5 million ($0.27 per share) in Q3 2024 compared to $16.5 million ($0.24 per share) in the same period in 2023. The increase can mainly be attributed to higher operating results, partially offset by a greater loss on foreign exchange.
Cash flow generated from operating activities totaled $30.9 million in Q3 2024 compared to $24.6 million in Q3 2023. The year-over-year improvement was mainly due to the non-recurring recovery of income taxes attributable to the Radio segment and higher operating results, partially offset by a greater negative net change in non-cash operating items. Adjusted free cash flow(1) amounted to $32.7 million in Q3 2024 compared to $18.1 million in the same period in 2023. The increase was mainly related to the non-recurring recovery of income taxes attributable to the Radio segment and better operating results.
As at December 31, 2023, the Corporation had cash and cash equivalents of $7.0 million, subordinated debt of $25.6 million and credit facilities of $362.9 million, of which approximately $61.0 million was available. The Net Debt to Pro Forma Adjusted EBITDA ratio(1) stood at 2.99x as at December 31, 2023 compared to 3.34x as at December 31, 2022.
Declaration of Dividend
On February 6, 2024, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate voting share and multiple voting share. The dividend will be payable on or around March 15, 2024 to shareholders on record as of February 29, 2024.
The Corporation’s dividend policy is at the discretion of the Board of Directors and may vary depending upon, among other things, our available cash flow, results of operations, financial condition, business growth opportunities and other factors that the Board of Directors may deem relevant.
The dividends paid are designated as “eligible” dividends for the purposes of the Income Tax Act (Canada) and any corresponding provisions of provincial and territorial tax legislation.
Business Highlights and Subsequent Events
On January 22, 2024, the Corporation announced the launch of five video channels on Xiaomi TV+, a free ad-supported TV streaming service platform. This successful cooperation was made possible through the commercial support and expertise of THEMA, a Canal+ company. The offering is now live and available on all Android TVs (through Xiaomi TV+ App download) in Germany, Italy, Spain, France, and the United Kingdom, providing a rich and diverse content experience to all viewers across these countries. Further expansion to other countries is planned for next year.
On January 10, 2024, the Corporation announced that Stingray Karaoke will be featured as an in-car entertainment service in the innovative and luxurious AFEELA Prototype manufactured by Sony Honda Mobility Inc.. This collaboration was showcased at the 2024 Consumer Electronics Show (CES) and represents the start of future collaboration between the companies.
On January 8, 2024, the Corporation announced the launch of the next-generation karaoke experience with gaming and scoring features for use in the automotive space. Its partner, The Singing Machine Company, Inc., announced the launch of its in-car karaoke microphone with pitch detection exclusively working with Stingray Karaoke scoring features at the 2024 Consumer Electronics Show in Las Vegas from January 9-12, 2024.
On January 5, 2024, the Corporation announced the expansion of its global deal with BYD, the world’s leading manufacturer of new energy vehicles. Following the successful integration of Stingray Karaoke, BYD will now include the established Calm Radio app in their models sold across dozens of countries. This represents the first time that Calm Radio has been deployed across a leading EV OEM platform, showcasing Stingray’s commitment to revolutionizing the global in-car entertainment landscape with compelling content and features.
On November 17, 2023, the Corporation announced the launch of eighteen new channels on Samsung TV Plus, Samsung’s 100% free ad-supported streaming TV and video on-demand (AVOD) service. These channels are now live and available to users in the U.S. on Samsung Smart TVs, Galaxy devices, Smart Monitors, Family Hub refrigerators and on the web. The new audio channels on Samsung TV Plus cater to a broad spectrum of musical tastes and genres. From Hot Country, Remember the 80’s, Nothin’ but 90’s, Flashback 70’s, Smooth Jazz, Easy Listening, The Spa, Today’s K-Pop, Today’s Latin Pop, Romance Latino, Classic Rock, Hip-Hop and Greatest Hits, there’s something for every music lover. This diverse array of channels reflects Stingray’s commitment to delivering a rich and varied music experience to all listeners.
On November 16, 2023, the Corporation announced the introduction of its latest TV channel, Stingray Holidayscapes. Now available on LG Smart TVs, the channel promises to enhance the viewing experience for millions of users across North America. Stingray Holidayscapes sets the perfect ambiance for all at-home activities and gatherings throughout the seasons, transforming everyday moments into memorable experiences. The channel artfully weaves together scenes of vibrant celebrations with holiday-inspired lifestyle videos, creating a distinctive backdrop for every occasion. With a repertoire ranging from heartfelt Valentine’s Day love songs to spooky Halloween pop hits and timeless holiday classics, Stingray Holidayscapes celebrates the spirit of festivity all year round.
On November 9, 2023, the Corporation announced the addition of five new FAST channels on Pluto TV now available to audiences in Canada. This expansion highlights Stingray’s commitment to delivering diverse, high-quality content across the country.
Conference Call
The Corporation will hold a conference call tomorrow, February 7, 10:00 AM (ET), to review its financial results. Interested parties can join the call by dialing 416-764-8658 (Toronto) or 1-888-886-7786 (toll free). A rebroadcast of the conference call will be available until midnight, March 7, 2024, by dialing 416-764-8692 or 877-674-7070 and entering the passcode 174404.
About Stingray
Stingray (TSX:RAY, RAY.B)), a global music, media, and technology company, is an industry leader in TV broadcasting, streaming, radio, business services, and advertising. Stingray provides an array of music, digital, and advertising services to enterprise brands worldwide, including audio and video channels, over 100 radio stations, subscription video-on-demand content, FAST channels, karaoke products and music apps, and in-car and on-board infotainment content. Stingray Business, a division of Stingray, provides commercial solutions in music, in-store advertising solutions, digital signage, and AI-driven consumer insights and feedback. Stingray Advertising is North America’s largest retail audio advertising network, delivering digital audio messaging to more than 20,000 major retail locations. Stingray has close to 1,000 employees worldwide and reaches 540 million consumers in 160 countries. For more information, visit www.stingray.com.
Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian securities law. Such forward-looking information includes, but is not limited to, information with respect …