Stingray Group (RAY-A) Q2 2025 earnings summary

Executive summary

• Revenues for Q2 2025 reached $93.6 million, up 13.4% year-over-year, driven by strong growth in FAST channels, digital signage, and retail media, with year-to-date revenues at $182.7 million.

• Adjusted EBITDA increased 15.2% to $34.0 million, while net income declined 38.1% to $5.8 million due to unrealized derivative losses and FX impacts.

• Adjusted net income rose to $16.7 million ($0.24 per share), and adjusted free cash flow surged 44.9% to $21.1 million.

• Strategic growth areas include retail media, streaming services, and connected cars, supported by new partnerships, product launches, and the acquisition of The Coda Collection.

• Continued focus on a high-margin, cash-generating business model and disciplined capital allocation.

Financial highlights

• Adjusted EBITDA margin improved to 36.3% (Q2 2025) from 35.8% (Q2 2024).

• Net debt at quarter-end was $367.5 million, or 2.72x pro forma adjusted EBITDA, with available credit facilities of $68 million.

• Cash flow from operations was $19.2 million, and 333,000 shares were repurchased for $2.5 million in Q2.

• Annual dividend maintained at $0.30 per share, with $0.075 per share declared for December 2024.

• Adjusted net income per share (diluted) was $0.24 in Q2 2025 versus $0.21 in Q2 2024.

Outlook and guidance

• Management expects to maintain or exceed a 35% EBITDA margin, with current performance tracking above this level.

• Growth in FAST channels, retail media, and connected car segments is expected to continue, with annual growth targets above 40%.

• Leverage ratio targeted to fall between 2 and 2.5 times by fiscal year-end, with a focus on deleveraging and potential acquisitions once the target is reached.

• Ongoing expansion in the US and international markets through new partnerships and product launches.

• Management expects cash from operations and available credit to meet liquidity needs.