MONTREAL — Commercial music service provider and broadcaster Stingray Group Inc. announced yesterday its revenues grew 4.8% to $76 million in the third quarter of its 2022 fiscal year compared to the same quarter in fiscal 2021.
The company said in a press release the revenue increase “was primarily due to the gradual easing of Covid-19 restrictions and the return to normal commercial operations as well as an increase in advertising revenues in the Broadcast and Commercial Music segment.”
The breakdown of its revenue numbers for the quarter ended Dec. 31, 2021, shows the company’s broadcasting and commercial music revenues increased 2.3% year-over-year to $41.1 million, and its radio revenues grew 7.9% to $34.9 million compared to the same quarter last year.
Looking at its Q3 2022 revenues by region, Stingray’s revenues in Canada grew 4.2% to $49.4 million compared to Q3 2021, while its revenues in the United States increased by 25.7% to $13.4 million. The company’s revenues in other countries decreased 8.8% year-over-year to $13.2 million.
Overall, Stingray’s adjusted EBITDA decreased 16.1% to $28.5 million in Q3 2022 compared to the same quarter of the previous year and net income fell 11.1% to $12.5 million.
“I am pleased with our solid organic growth of 5% in the third quarter of 2022, including more than 28% year-over-year in the United States,” said Stingray’s president, co-founder and CEO, Eric Boyko, in the press release.
“Adjusted EBITDA decreased year over year mainly due to a one-time gain from a settlement with SOCAN in the third quarter of last year, and significant incremental investments in this quarter to support strategic growth initiatives in the U.S. and to accelerate the Corporation’s pivot to digital streaming, with results expected to materialize in subsequent quarters,” Boyko said.
“From a pure operational standpoint, adjusted EBITDA of $28.5 million would have been relatively stable compared to the same period last year with higher revenues of 4.8% mostly offsetting lower margins caused by increased investments in the U.S. and differences in product mix.”
Following the end of the quarter, Stingray completed its acquisition of InStore Audio Network, “the largest retail audio network in the U.S. reaching 16,000 pharmacies and grocery stores,” Boyko said.
“By combining this strategic asset with our existing platform, our Stingray Business is extremely well positioned to target 250,000 locations in the U.S. and Canada. For Stingray, the revenue potential per location can increase exponentially and generate significantly higher margins, since we are helping our customers generate additional revenue.”
The company’s SVOD subscribers “surged past 691,000 in Q3 2022, an increase of 34% over the same period last year and 13% sequentially. We expect to hit our one-million-sub goal within the next two years,” Boyko said.
“As for advertising revenues, the run-rate for the third quarter was in excess of $10 million, supported by significant growth over last year. The acquisition of InStore Audio Network will further step-up advertising revenues going forward.
“In short, the pivot in our business towards strategic digital revenues is in full motion and gaining traction with accelerated growth in new revenue streams outpacing the drop in our traditional sources of revenue,” Boyko said.
For more on Stingray’s Q3 2022 financial results, please click here.
