Stingray Group Inc. (RAY.TO) 2025-06-11 Earnings Call Transcript

reinvest in high-growth areas, reduce leverage below 2x, pursue strategic M&A, and continue rewarding shareholders through buybacks and dividends. I’ll now pass it to Marie-Hélène for the financial details. Marie-Hélène Foulbier (Interim CFO): Thank you, Eric. Q4 revenue was $96 million, up 14.8% year-over-year, led by FAST channels and foreign exchange benefits. Canada grew 2.7% to $46.8 million, the U.S. jumped 45% to $38 million, while other regions declined 5.5% to $11.2 million. By segment, broadcasting and commercial music revenue increased 20.9% to $64.6 million, and radio rose 3.9% to $31.4 million. Adjusted EBITDA grew 19% to $35 million, with margins expanding to 36.5%. Net income was $7.7 million ($0.11/share), a significant improvement from last year’s $46.3 million loss, which included a goodwill impairment charge. Adjusted net income was $18.6 million ($0.27/share), up from $15.4 million. Cash flow from operations was $39.7 million, down slightly due to higher taxes and restructuring costs. Adjusted free cash flow improved to $18.4 million. We ended the quarter with $14 million in cash and $156.3 million in available credit. Net debt stood at $327.4 million, down $27.3 million year-over-year. We repurchased 275,000 shares in Q4 ($9.1 million for the year) and paid $20.5 million in dividends. Back to Eric for closing remarks. Eric Boyko: Thanks, Marie-Hélène. We’re proud of our team’s work and excited about fiscal 2026. With strong momentum in FAST, retail media, and radio, we’re well-positioned for another year of growth. Let’s open the line for questions. Operator: First question from Adam Shine, National Bank Financial. Adam Shine: Congrats on the strong finish. Can you quantify FAST revenue for fiscal 2025 and expectations for 2026? Also, how does the ad inventory backfilling initiative impact margins? Eric Boyko: FAST revenue is tracking well above initial expectations, and we’re seeing similar momentum in Q1 2026, with growth over 40%. Backfilling unsold inventory is a game-changer-it could double FAST revenue potential. Partners typically sell 40-50% of ads directly; we monetize the rest programmatically. Margin-wise, partner-sold ads are recognized net (higher margin), while our direct sales are gross (around 40% margin). Adam Shine (follow-up): Leverage target-are you aiming for “below 2x” or “approaching 2x”? Any M&A capacity? Eric Boyko: We expect to be below 2x by December 2025. This gives us flexibility for $30-40 million in buybacks or tuck-in deals. Larger M&A ($200-400 million range) is on hold due to market volatility, but we’re monitoring opportunities. Operator: Next question from Scott Fletcher, CIBC. Scott Fletcher: Subscription revenue grew 7% in Q4-is this sustainable? Eric Boyko: No, this was a one-time bump from a promotion. Focus on year-over-year growth for modeling. Scott Fletcher (follow-up): If you pursue larger M&A, how would you finance it? Eric Boyko: Debt-only. With our free cash flow yield at 15-17%, equity is too expensive. We’d stay below 3x leverage post-deal. Operator: Final question from Jerome Dubreuil, Desjardins. Jerome Dubreuil: How is the macro environment impacting advertising demand? Eric Boyko: FAST channels are benefiting from the $70 billion shift from traditional TV ads. Radio is also holding up-Q1 revenue is up 5% as we gain share. Jerome Dubreuil (follow-up): Are you seeing pricing power in retail media? Eric Boyko: Yes, we’re optimizing CPMs and fill rates. Video ads in retail (like Metro stores) are a new growth driver. Eric Boyko (Closing): Thanks, everyone. We look forward to updating you in Q1. Operator: This concludes the call. Thank you for participating.