Stingray Group (RAY-A) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues rose 12.8% to $89.1 million, driven by strong growth in FAST channels, retail media, and digital advertising, with advertising revenues nearly doubling year-over-year.

• Adjusted EBITDA increased 9.9% to $31.1 million, while net income declined 48.3% to $7.3 million ($0.11/share) due to an unrealized loss on derivatives and absence of a prior-year one-time gain.

• Strategic digital revenues, including streaming and advertising, now comprise 49% of total revenues, up from 45% last year.

• New agreements, such as with Roku Channel, and the acquisition of The Coda Collection, expanded the streaming portfolio and market reach.

• The company released its first sustainability report, focusing on social prosperity, responsible business, and environmental engagement.

Financial highlights

• Q1 2025 revenues reached $89.1 million, up 12.8% year-over-year, with adjusted EBITDA at $31.1 million (margin 34.9%).

• Net income was $7.3 million ($0.11/share), down from $14.1 million ($0.20/share) due to derivative losses and a prior-year one-time gain; adjusted net income rose to $13.9 million ($0.20/share) from $11.9 million ($0.17/share).

• Cash flow from operations was $10.8 million, down from $24.3 million, mainly due to non-cash items and higher taxes; adjusted free cash flow was $15.5 million, down 16.2% year-over-year.

• Net debt at quarter-end was $362.3 million, or 2.77x pro forma adjusted EBITDA.

• 307,000 shares were repurchased and cancelled for $2.3 million under the NCIB.

Outlook and guidance

• Management targets doubling FAST channel revenues and 20% growth in retail media for FY2025, with advertising revenue growth expected to reach 40% for the year.

• Focus on accelerating growth in retail media, streaming, and connected car segments, with strategic investments and acquisitions to drive expansion.

• Radio revenue growth is expected to be challenging in Q2 but to improve in Q3 and Q4 with new national retail partners.

• Capital allocation will prioritize debt reduction, targeting a leverage ratio of 2-2.5x by year-end.