MONTREAL – Led by acquisitions and an influx of subscription video on demand (SVoD) subscribers, Stingray Digital Group saw its third quarter revenues climb by over 31%.
For the third quarter ended December 31, Stingray posted revenues of $34.2 million, up 31.8% from $25.9 million in the same period last year, primarily due to its acquisition of Yokee Music and Classica, combined with organic growth of SVoD services in the U.S., as well as additional music and equipment sales related to digital signage.
Recurring revenues were up 27.5% to $28.0 million year-over-year and decreased to 81.9% of total revenues for the quarter due primarily to a major non-recurring contract in Commercial Music, compared to 84.6% of total revenues last year. For the quarter, Canadian revenues increased 15.7% to $16.2 million (47.4% of total revenues), United States revenues increased 61.4% to $6.6 million (19.4% of total revenues), and revenues in Other Countries increased by 45.0% to $11.4 million (33.2% of total revenues).
Music Broadcasting revenues increased 23.2% to $23.8 million, mainly due to the acquisitions of Yokee Music and Classica, as well as organic growth in the U.S. market, primarily related to SVoD services. Commercial Music revenues rose 56.5% to $10.4 million, mainly due to organic growth in sales of equipment and installation related to digital signage, and the acquisition of SMA and SBA in July 2017.
Net income plunged 72.3% to $737,000 from $2.7 million in the same period last year, mainly attributable to the negative change in fair value of contingent consideration, higher legal fees, and higher amortization expense of intangible assets, partially offset by higher operating results.
Adjusted net income dipped to $6.0 million from $6.2 million a year ago, as higher finance expense and income net tax expense were offset by higher adjusted EBITDA.
"Third quarter results clearly demonstrate the driving force of our business on several fronts as organic growth reached 15%” said Stingray president, CEO and co-founder Eric Boyko, in a statement. “Revenues and Adjusted EBITDA increased by 32% and 28%, respectively. The acquisitions, SVOD and a large contract in Commercial Music with a major pharmacy chain in Canada were the primary revenue drivers. As we continue to generate solid free cash flow, we have increased our dividend by 10% to $0.055 per share representing the sixth increase since our IPO in June 2015.”
Click here for Stingray’s complete third quarter financial results.
