MONTREAL – Legal fees associated with a patent dispute cut in to second quarter profits at Stingray.
For the period ended September 30, 2017, Stingray posted a net loss of $3.4 million, compared to a net income of $1.4 million for the same period last year, which it said was due mainly to higher legal fees, higher amortization expense of intangible assets as well as negative change in fair value of investments and contingent considerations, partially offset by higher operating results and income taxes recovery.
Adjusted net income was flat at $5.4 million, as higher finance expense and income net tax expense were offset by higher adjusted EBITDA.
Revenues increased 24.7% to $30.6 million in the second quarter of 2018 compared with revenues of $24.5 million a year ago, due primarily to the acquisition of Yokee Music and Classica, combined with organic growth of subscription video on demand (SVoD) services in the United States, as well as additional music and equipment sales in Commercial Music.
Recurring revenues were up 21.3% to $26.2 million year-over-year and decreased to 85.6% of total revenues for the quarter, compared to 88.0% of total revenues last year. For the quarter, Canadian revenues increased 5.5% to $14.8 million (48.5% of total revenues), United States revenues increased 69.6% to $5.0 million (16.2% of total revenues), whereas revenues in Other Countries increased by 42.9% to $10.8 million (35.3% of total revenues).
Music Broadcasting revenues increased 20.8% to $21.8 million, mainly due to the acquisition of Classica in Fiscal 2017, as well as Yokee Music and C Music in May 2017, and organic growth in the United States market, primarily related to SVoD services. Commercial Music revenues rose 35.4% to $8.8 million, mainly due to the acquisition of SBA Music PTY Ltd and Satellite Music Australia PTY Ltd in July 2017, as well as organic growth in sales of equipment and installation related to digital signage.
"Our second quarter results reflect solid and continued momentum in our business strategy and execution”, said Stingray president, CEO, and co-founder Eric Boyko, in a statement. “We are extremely pleased by revenue growth of 24.7%, of which approximately 8% is related to organic growth, and also by the 15.0% improvement in adjusted EBITDA."
Stingray’s full financial results for Q2 2018 are available here.
