Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stingray Group Inc (STGYF, Financial) reported a strong adjusted EBITDA of CAD 42.1 million, marking the sixth consecutive quarter of robust financial performance.
- The company achieved unprecedented revenues of CAD 108 million, driven by the strength in its FAST channel business and Stingray Business Unit.
- Stingray's partnership with major TV manufacturers like LG, VIZIO, and Samsung has been fruitful, with the Samsung TV Karaoke app winning the 2025 CES Innovation Award.
- The acquisition of Loop Heart enhances Stingray's presence on connected TVs and digital signage, expanding its offerings for businesses.
- Stingray secured an additional CAD 80 million in financing, providing liquidity for growth opportunities and strategic acquisitions.
Negative Points
- The company faced lower sales in its retail media advertising segment, partly due to large orders in the previous year that were not repeated.
- Revenues in other countries decreased by 3.7% year-over-year, primarily due to reduced subscription revenues.
- Despite growth in the US market, the company experienced a decline in retail media advertising sales following a substantial one-time order in the previous year.
- Adjusted free cash flow decreased to CAD 28.6 million from CAD 32.1 million in the same period of the previous year, impacted by non-recurring recovery of income taxes.
- The company faces challenges in fully monetizing its audio retail media network, requiring optimization of pricing and expansion of sales channels.
Q & A Highlights
Q: Can you provide an update on the FAST channels revenue and its growth trajectory into fiscal 2026?
A: Eric Boyko, President and CEO, stated that the FAST channels are experiencing significant growth, with the market expanding by 20% to 60%. Stingray is outperforming its budget expectations and is on track to exceed the $24 million target for fiscal 2025. The company has launched new channels and expanded partnerships, indicating strong momentum for the next 3 to 4 years.
Q: How is Stingray planning to grow its retail media segment, and what is the potential for this market?
A: Eric Boyko explained that Stingray aims to grow its retail media and FAST segments by 40% this year. The company has a large inventory in Canada and the US, with a focus on increasing sales staff, optimizing pricing, and partnering with key players like Odyssey and iHeart to enhance sales. The retail media market is seen as a significant growth vector for the next few years.
Q: Can you elaborate on the potential for video in retail media, particularly in the US market?
A: Eric Boyko noted that there is increasing demand for video in retail media, with banks and other sectors showing interest. Stingray is working with partners like Samsung and LG to monetize video content. The company is exploring opportunities to integrate video and audio ads, creating a comprehensive advertising solution for retailers.
Q: What is the outlook for Stingray's in-car entertainment business, and are there any upcoming partnerships?
A: Eric Boyko highlighted that Stingray's in-car entertainment, particularly Karaoke, is gaining traction with OEMs like Tesla and BYD. The company is in discussions with several car manufacturers, with new partnerships expected to be announced soon. While the rollout is gradual, significant revenue impact is anticipated in 2027.
Q: How is Stingray's radio segment performing compared to the industry, and what are the growth prospects?
A: Eric Boyko reported that Stingray's radio segment is outperforming the market, with a 4% growth compared to a decline in the industry. The integration of retail media sales into the radio segment is contributing to this growth. The company expects continued positive performance driven by digital and retail media sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
