Mr. Eric Boyko reports

STINGRAY REPORTS THIRD QUARTER RESULTS FOR FISCAL 2024

Stingray Group Inc. has released its financial results for the third quarter of fiscal 2024 ended Dec. 31, 2023.

Reporting on third quarter results for fiscal 2024, Stingray's president, co-founder and chief executive officer, Eric Boyko, stated: "Stingray delivered exceptional third quarter results, surpassing the $100-million revenue mark for the first time in the company's history while generating adjusted [earnings before interest, taxes, depreciation and amortization] of $38.6-million and adjusted free cash flow of $32.7-million. This outstanding operating performance was driven by organic growth of 23.9 per cent year over year in broadcast and recurring commercial music revenues, including a combined 84.3-per-cent increase in retail media and FAST channel advertising revenues. We are trailblazers in the retail media advertising industry, providing large retailers with a technology platform that carries customizable ads across a digital network every few minutes to fully monetize the presence of in-store consumers. The response from the vast U.S. market has been remarkable with overall Stingray sales growing 39.7 per cent south of the border in the third quarter. On the FAST channel side, we nearly doubled listening hours sequentially to 29 million through the integration of 18 new Stingray channels on Samsung TV Plus in the [United States] during two-plus months in Q3 2024.

"Turning to in-car entertainment, the initial deployment of Stingray Karaoke in 300,000 BYD cars is steadily progressing, and we further expanded our partnership with the world's leading manufacturer of new energy vehicles through the launch of Calm Radio in models across dozens of countries. This latest agreement is highly significant because it diversifies our automobile product offering into the wellness space to enhance the driver's journey while highlighting our emerging relevance in the global in-car entertainment landscape.

"Altogether, revenues for our broadcasting and commercial music business increased 21.2 per cent to $65.6-million in the third quarter of 2024 while radio revenues remained relatively stable year over year at $34.6-million as we continued capturing share in local markets through our direct sales force. Given sustained, robust financial results, we are confident Stingray will continue to generate strong revenue growth in fiscal 2025 with a similar margin profile," Mr. Boyko concluded.

Third quarter results

Revenues increased $11.1-million, or 12.4 per cent, to $100.3-million in Q3 2024 from $89.2-million in Q3 2023. The year-over-year increase was largely due to growth in retail media advertising and FAST channel revenues.

For the quarter, revenues in Canada rose $1.6-million, or 3.1 per cent, to $51.0-million from $49.4-million in Q3 2023. The increase mainly reflects heightened retail media advertising revenues.

Revenues in the United States grew $10.5-million, or 39.7 per cent year over year, to $37.1-million in Q3 2024 from $26.6-million in Q3 2023. The growth can be attributed to the strength of retail media advertising and FAST channel revenues.

Revenues in other countries decreased $1.0-million, or 7.8 per cent, to $12.2-million in Q3 2024 from $13.2-million in Q3 2023. The year-over-year decline was caused by lower audio channel revenues, as well as less in-store commercial revenues due to the restructuring of the division. These factors were partially offset by a positive foreign exchange impact.

Broadcasting and commercial music revenues increased $11.4-million, or 21.2 per cent, to $65.6-million in Q3 2024 from $54.2-million in Q3 2023. The growth was primarily driven by higher retail media advertising and FAST channel revenues. Radio revenues decreased $500,000, or 1.3 per cent, to $34.6-million in Q3 2024 from $35.1-million in Q3 2023 as local and national agency airtime advertising dropped year over year, partially offset by increases in local direct revenues.

Consolidated adjusted EBITDA improved $4.1-million, or 12.2 per cent, to $38.6-million in Q3 2024 from $34.5-million in Q3 2023. The growth in adjusted EBITDA was mainly due to higher revenues. Adjusted EBITDA margin reached 38.5 per cent in Q3 2024 compared with 38.6 per cent in the same period in 2023. The slight decline was due to the decrease in adjusted EBITDA in the radio segment.

Net income totalled $9.1-million (13 cents per share) in Q3 2024 compared with $12.9-million (19 cents per share) in Q3 2023. The decrease was mainly driven by an unrealized loss on derivative financial instruments and by higher performance and deferred share units expense related to a share price increase. These factors were partially offset by higher operating results and lower income taxes.

Adjusted net income reached $18.5-million (27 cents per share) in Q3 2024 compared with $16.5-million (24 cents per share) in the same period in 2023. The increase can mainly be attributed to higher operating results, partially offset by a greater loss on foreign exchange.

Cash flow generated from operating activities totalled $30.9-million in Q3 2024 compared with $24.6-million in Q3 2023. The year-over-year improvement was mainly due to the non-recurring recovery of income taxes attributable to the radio segment and higher operating results, partially offset by a greater negative net change in non-cash operating items. Adjusted free cash flow amounted to $32.7-million in Q3 2024 compared with $18.1-million in the same period in 2023. The increase was mainly related to the non-recurring recovery of income taxes attributable to the radio segment and better operating results.

As at Dec. 31, 2023, the corporation had cash and cash equivalents of $7.0-million, subordinated debt of $25.6-million, and credit facilities of $362.9-million, of which approximately $61.0-million was available. The net debt to pro forma adjusted EBITDA ratio stood at 2.99 times as at Dec. 31, 2023, compared with 3.34 times as at Dec. 31, 2022.

Declaration of dividend

On Feb. 6, 2024, the corporation declared a dividend of 7.5 cents per subordinate voting share, variable subordinate voting share and multiple voting share. The dividend will be payable on or around March 15, 2024, to shareholders on record as of Feb. 29, 2024.

The corporation's dividend policy is at the discretion of the board of directors, and may vary depending upon, among other things, its available cash flow, results of operations, financial condition, business growth opportunities and other factors that the board of directors may deem relevant.

The dividends paid are designated as eligible dividends for the purposes of the Income Tax Act (Canada) and any corresponding provisions of provincial and territorial tax legislation.

Business highlights and subsequent events:

• On Jan. 22, 2024, the corporation announced the launch of five video channels on Xiaomi TV+, a free ad-supported TV streaming service platform. This successful co-operation was made possible through the commercial support and expertise of Thema, a Canal+ company. The offering is live and available on all Android TVs (through a Xiaomi TV+ app download) in Germany, Italy, Spain, France and the United Kingdom, providing a rich and diverse content experience to all viewers across these countries. Further expansion to other countries is planned for next year.
• On Jan. 10, 2024, the corporation announced that Stingray Karaoke will be featured as an in-car entertainment service in the innovative and luxurious Afeela prototype manufactured by Sony Honda Mobility Inc. This collaboration was showcased at the 2024 Consumer Electronics Show and represents the start of future collaboration between the companies.
• On Jan. 8, 2024, the corporation announced the launch of the next-generation karaoke experience with gaming and scoring features for use in the automotive space. Its partner, The Singing Machine Company Inc., announced the launch of its in-car karaoke microphone with pitch detection exclusively working with Stingray Karaoke scoring features at the 2024 Consumer Electronics Show in Las Vegas from Jan. 9 to Jan. 12, 2024.
• On Jan. 5, 2024, the corporation announced the expansion of its global deal with BYD, the world's leading manufacturer of new energy vehicles. Following the successful integration of Stingray Karaoke, BYD will include the established Calm Radio app in its models sold across dozens of countries. This represents the first time that Calm Radio has been deployed across a leading electric vehicle original equipment manufacturer platform, showcasing Stingray's commitment to revolutionizing the global in-car entertainment landscape with compelling content and features.
• On Nov. 17, 2023, the corporation announced the launch of 18 new channels on Samsung TV Plus, Samsung's 100-per-cent free ad-supported streaming TV and video-on-demand (AVOD) service. These channels are live and available to users in the United States on Samsung smart TVs, Galaxy devices, smart monitors, family hub refrigerators and on the Web. The new audio channels on Samsung TV Plus cater to a broad spectrum of musical tastes and genres. From Hot Country, Remember the 80s, Nothin' but 90s, Flashback 70s, smooth jazz, easy listening, The Spa, Today's K-Pop, Today's Latin Pop, romance Latino, classic rock, hip hop and greatest hits, there is something for every music lover. This diverse array of channels reflects Stingray's commitment to delivering a rich and varied music experience to all listeners.
• On Nov. 16, 2023, the corporation announced the introduction of its latest TV channel, Stingray Holidayscapes. Now available on LG smart TVs, the channel promises to enhance the viewing experience for millions of users across North America. Stingray Holidayscapes sets the perfect ambiance for all at-home activities and gatherings throughout the seasons, transforming everyday moments into memorable experiences. The channel artfully weaves together scenes of vibrant celebrations with holiday-inspired lifestyle videos, creating a distinctive backdrop for every occasion. With a repertoire ranging from heartfelt Valentine's Day love songs to spooky Halloween pop hits and timeless holiday classics, Stingray Holidayscapes celebrates the spirit of festivity all-year-round.
• On Nov. 9, 2023, the corporation announced the addition of five new FAST channels on Pluto TV available to audiences in Canada. This expansion highlights Stingray's commitment to delivering diverse, high-quality content across the country.

Conference call

The corporation will hold a conference call tomorrow, Feb. 7, at 10 a.m. ET, to review its financial results. Interested parties can join the call by dialling 416-764-8658 (Toronto) or 1-888-886-7786 (toll-free). A rebroadcast of the conference call will be available until midnight, March 7, 2024, by dialling 416-764-8692 or 877-674-7070 and entering the passcode 174404.

About Stingray Group Inc.

Stingray (Toronto Stock Exchange: RAY.A and RAY.B), a global music, media and technology company, is an industry leader in TV broadcasting, streaming, radio, business services and advertising. Stingray provides an array of music, digital and advertising services to enterprise brands worldwide, including audio and video channels, over 100 radio stations, subscription video-on-demand content, FAST channels, karaoke products and music apps, and in-car and on-board infotainment content. Stingray Business, a division of Stingray, provides commercial solutions in music, in-store advertising solutions, digital signage and artificial-intelligence-driven consumer insights and feedback. Stingray Advertising is North America's largest retail audio advertising network, delivering digital audio messaging to more than 20,000 major retail locations. Stingray has close to 1,000 employees worldwide and reaches 540 million consumers in 160 countries.

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