Stingray Group Q3 Earnings Call Highlights

Stingray Group (TSE:RAY.A) reported record revenue and cash generation for its fiscal third quarter ended December 31, 2025, highlighting early benefits from its recently closed TuneIn acquisition and continued growth in newer advertising-driven channels such as FAST (free ad-supported streaming TV) and connected-car entertainment.

Record quarterly revenue, EBITDA and free cash flow

Management said consolidated revenue rose 15.4% year over year to CAD 124.8 million, up from CAD 108.2 million in the prior-year quarter. Interim CFO Marie-Hélène Fournier attributed the increase primarily to “enhanced advertising revenues” from TuneIn, higher equipment sales tied to the Singing Machine acquisition, and greater FAST channel revenue.

On profitability, Stingray posted adjusted EBITDA of CAD 44.5 million, up 5.7% year over year. Adjusted EBITDA margin was 35.7%, down from 38.9% a year earlier, which Fournier said reflected lower gross margin on sales related to TuneIn and Singing Machine.

The company also reported record operating cash flow and adjusted free cash flow:

• Cash flow from operating activities: CAD 38.0 million (vs. CAD 35.4 million a year earlier)
• Adjusted free cash flow: CAD 34.8 million (vs. CAD 28.6 million)

Net income fell to CAD 7.5 million (CAD 0.11 per diluted share) from CAD 15.7 million (CAD 0.23 per diluted share). Fournier said the decline was mainly due to higher performance share unit expense linked to a higher share price and increased acquisition, legal restructuring, and other costs, partially offset by an unrealized gain on derivative instruments and a foreign exchange gain. Adjusted net income rose to CAD 26.3 million (CAD 0.38 per diluted share) from CAD 23.4 million (CAD 0.34 per diluted share).

TuneIn acquisition drives early synergies and programmatic sales momentum

President and CEO Eric Boyko framed Stingray’s strategy around three pillars—distribution, monetization, and content—and pointed to TuneIn as central to strengthening the company’s advertising “engine.” Boyko said the integration has progressed “even better than planned,” and that TuneIn’s performance has exceeded expectations since the deal closed on December 19.

Boyko disclosed synergy progress and reiterated targets that were originally set for the next 18 months:

• Revenue synergies: CAD 16 million annual run rate (with a stated target of CAD 20 million to CAD 40 million)
• Cost savings: CAD 5 million annual run rate (with a stated target of CAD 10 million to CAD 15 million)

During Q&A, Boyko clarified that the synergy targets referenced when the deal was announced were communicated in U.S. dollars. He also argued the revenue synergy range may prove conservative, describing the cross-selling opportunity as potentially “$20 million and above,” and emphasizing growth in programmatic advertising.

Boyko said Stingray expects to reach a run rate of $500,000 per day in programmatic sales by the end of March. He contrasted that with “zero” programmatic sales at the same time a year earlier. He also cited strong momentum at TuneIn early in the calendar year, stating TuneIn “grew in January by 81%,” while cautioning that comparisons were influenced by a weaker prior-year period and broader market conditions.

FAST channels and inventory monetization remain key focus

Boyko emphasized the scale of Stingray’s distribution footprint across connected TVs, smart speakers, mobile devices, connected cars, and retail environments. He estimated Stingray has over $200 million of unsold FAST channel inventory and over $400 million of unsold retail media inventory, along with growing in-car inventory.

He also discussed how revenue mix can influence reported margins. Boyko noted that certain FAST partner arrangements are recorded net, while “backfilling” and programmatic ad sales involve revenue-sharing with partners, leading to different gross margin profiles. While management said the company is currently operating around a mid-30% EBITDA margin, Boyko suggested margins could trend higher over time as the business scales.

Connected-car partnerships expand, but revenue ramp remains gradual

Stingray highlighted recent agreements with automotive brands including BYD, Mercedes, and Nissan, positioning the company as a supplier of bundled in-vehicle entertainment that can include Stingray Music, karaoke, Calm Radio, and TuneIn content. Boyko said BYD is integrating multiple Stingray products under “BYD Audio by Stingray” branding, while Mercedes is expected to launch pre-installed Stingray Music and Stingray Karaoke apps in vehicles equipped with the latest MBUX system in the first half of calendar 2026. The Nissan collaboration is set to bring TuneIn’s offering to select Nissan and Infiniti vehicles in the U.S.

On revenue contribution, Boyko said the in-car business is still small but growing 40% to 50%, and that it should generate “above $10 million” this year, with a potential to double next year. He cautioned that automotive programs take time to scale because of vehicle production cycles, while also arguing that once embedded, the relationship can last for many years.

Radio operations, Calgary acquisition, and balance sheet priorities

By segment, broadcasting and commercial music revenue rose 22% to CAD 88.1 million, while radio revenue increased 2% to CAD 36.7 million. Fournier said radio growth was driven by higher digital advertising sales, partially offset by lower airtime revenue.

Boyko said Stingray entered into an agreement in late November to acquire the assets of CHUP-FM in Calgary, subject to CRTC approval, with an expected closing in the second quarter of fiscal 2027. He said the deal is intended to improve efficiency and economies of scale given Stingray’s existing presence in the Calgary market. Management noted Stingray operates 96 radio stations across Canada.

On leverage, management said the company ended the quarter with a leverage ratio of 2.49x, below the 2.8 level it had previously communicated. Net debt totaled CAD 502.3 million, up from the prior quarter primarily due to acquisition-related outlays. Boyko said reducing debt will be the company’s top capital allocation priority over the next 12 months, targeting leverage below 2x EBITDA by the end of the calendar year. Fournier also noted Stingray repurchased 303,000 shares for CAD 3.8 million under its NCIB during the quarter.

In closing remarks, Boyko said Stingray plans to move to a single ticker to simplify the share structure and improve liquidity, particularly for U.S. investors. He said the company aims to broaden U.S. investor participation and pursue additional U.S. analyst coverage as TuneIn increases Stingray’s U.S. profile.

About Stingray Group (TSE:RAY.A)

Stingray Group Inc is a music, media, and technology company. The company is a provider of curated direct-to-consumer and B2B services, including audio television channels, radio stations, SVOD content, 4K UHD television channels, karaoke products, digital signage, in-store music, and music apps. It operates through the following segments namely the Broadcasting and commercial music segment and Radio segment. The company generates maximum revenue from the Broadcasting and commercial music segment.