MONTREAL — Broadcaster and music service provider Stingray today reported its revenues decreased 16% in the second quarter of its 2021 fiscal year, compared to the same quarter last year, primarily due to the impact of the Covid-19 pandemic on the company’s radio revenues.
For the three months ended September 30, 2020, Stingray’s revenues totalled $64.3 million, down from $76.6 million in the same period of last year. The company’s radio revenues decreased by 33.6% to $25.1 million, compared to $37.8 million a year ago.
Stingray’s broadcasting and commercial music segment (which includes its TV channels) saw revenues increase 1.1% to $39.2 million in Q2 2021, which the company attributed primarily to the acquisition of Marketing Sensorial México (MSM) and Chatter Research, and an increase in advertising revenues, partially offset by the impact of Covid-19.
“In the current context, we are extremely pleased with our second quarter results as adjusted EBITDA and adjusted free cash flow increased by 12.6% and 21.9% respectively, over the same period last year. Our strong results allowed us to further reduce our net debt to pro forma adjusted EBITDA ratio to 2.77 times,” said Eric Boyko, president, co-founder and CEO of Stingray, in the company’s press release announcing its quarterly results.
“Our future vectors of growth performed very well during the quarter and achieved new milestones. While starting from a small base last year, advertising revenues increased more than five-fold reflecting primarily the much-expanded distribution of our FAST (free, ad-supported TV) channels. In a seasonally soft quarter, streaming subscribers reached a new high of 480,000, up 10% on a sequential basis and 32% over last year,” added Boyko.
The increase in the company’s adjusted EBITDA — to $31.2 million, up from $27.7 million a year earlier — was mainly due to aid from the Canadian Emergency Wage Subsidy (CEWS) and other subsidies, as well as reduced operating costs, Stingray says in its release. The company reported its operating expenses decreased by 30.6% to $34.7 million in Q2 2021, compared to $50 million a year ago.
Commenting specifically on the company’s radio segment, Boyko said: “Our radio business has continued to improve in recent months. Our adjusted EBITDA for the second quarter experienced only a modest decline of 4.3% to $13.1 million, compared to the same period last year, as the benefits of government programs and our extensive cost control measures bore fruit. Going forward, we remain convinced in the fundamentals and potential of radio.”
For the second quarter, Stingray reported an overall net income of $11.9 million, a 129.3% increase from $5.2 million in the same quarter of last year. Adjusted net income was $16.3 million, compared to $12.4 million a year earlier, representing a 31.4% increase.
“In terms of capital allocation, debt reduction remains our top priority followed by our share repurchase program which was renewed in September. We continue to see opportunities for tuck-in acquisitions to complement and accelerate our significant organic growth prospects. Our transition to new IP content distributors accounted for most of our recent growth and will further accelerate as we leverage our extensive and diversified portfolio of premium music and media brands to address the ever-expanding need for content,” concluded Boyko.
In a separate announcement today, Stingray announced the renewal and expansion of its distribution agreement with Telus, which will provide Optik TV subscribers with access to the Qello Concerts by Stingray TV app for an $8 monthly subscription fee. Optik TV subscribers continue to have free access to the Stingray Music TV app, and the expanded deal lets Telus offer the free Stingray Music mobile app to its mobile subscribers.
For more about Stingray’s Q2 2021 financial results, please click here.
