Stingray Digit Sv (($TSE:RAY.A)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Stingray Group Inc. recently held its earnings call, revealing a robust fiscal year characterized by significant growth in advertising revenue, debt reduction, and improved net income. The company launched new channels and maintained a strong cash flow, although some regions experienced revenue declines and certain revenue increases were deemed unsustainable. Despite these challenges, the overall sentiment was positive, reflecting a strong performance.
Strong Advertising Revenue Growth
Advertising revenue in broadcast and commercial music saw an impressive growth of over 45% for the second consecutive year. This surge was primarily driven by the success of FAST channels and retail media, showcasing Stingray’s effective strategies in these areas.
Launch of New Channels
Stingray expanded its offerings by launching new channels such as Cozy Cafe and Stargaze. These additions have bolstered its leadership in connected TV music and ambient content, providing more diverse options for consumers.
Debt Reduction
The company made significant strides in reducing its net debt by $27 million, closing the year with a leverage ratio of 2.28x. This reduction highlights Stingray’s commitment to strengthening its financial position.
Continued Organic Growth
Stingray reported an organic growth rate of 12.3%, marking the second year of double-digit growth. This consistent performance underscores the company’s ability to expand its core business effectively.
Revenue and EBITDA Growth
Broadcasting and commercial music revenue increased by 17.8% to $254 million, while radio revenue grew by 2.3% to $132 million. Adjusted EBITDA rose by 19% to $35 million, with margins expanding to 36.5%, reflecting efficient operational management.
Improved Net Income
Net income improved significantly to $7.7 million, compared to a $46.3 million loss the previous year. Adjusted net income also rose to $18.6 million from $15.4 million, indicating a healthier bottom line.
Strong Cash Position
Stingray ended the quarter with $14 million in cash and $156.3 million in available credit, ensuring a solid liquidity position to support future initiatives.
Successful Share Repurchase and Dividends
The company repurchased 275,000 shares in Q4, totaling $9.1 million for the year, and paid $20.5 million in dividends, demonstrating its commitment to returning value to shareholders.
Decline in Other Regions
Revenue in other regions saw a decline of 5.5% to $11.2 million, highlighting some geographical challenges that the company faces.
Cash Flow from Operations Slightly Down
Cash flow from operations was slightly down at $39.7 million, impacted by higher taxes and restructuring costs, yet it remains a strong figure overall.
One-time Subscription Revenue Bump
A 7% growth in Q4 subscription revenue was noted as a one-time increase due to a promotion, indicating that this boost is not expected to be sustainable.
Forward-looking Guidance
Looking ahead, Stingray aims to reduce its leverage below 2x in fiscal 2026, pursue strategic mergers and acquisitions, and continue shareholder returns through buybacks and dividends. These initiatives reflect the company’s strategic focus on growth and financial stability.
In summary, Stingray Group Inc.’s earnings call painted a picture of a company on a strong financial footing, with significant achievements in revenue growth and debt reduction. While challenges remain, particularly in certain regions, the overall sentiment was positive, and the company appears well-positioned for future growth.