Stingray Group (TSE:RAY.A) reported sharply higher fourth-quarter revenue and adjusted EBITDA for fiscal 2026, driven by its TuneIn acquisition, growth in FAST channels and higher equipment sales tied to The Singing Machine acquisition, executives said on the company’s earnings call Wednesday.
President, CEO and co-founder Eric Boyko said Stingray’s fiscal 2026 revenue rose 21.9% and adjusted EBITDA increased 12.6%, with momentum accelerating in the fourth quarter. Fourth-quarter revenue increased 43.6% to CAD 137.8 million from CAD 96 million a year earlier, while adjusted EBITDA rose 21.3% to CAD 42.5 million.
TuneIn and Programmatic Advertising Drive Growth
Boyko said Stingray’s Premium Ad Network, which the company also referred to as “backfill,” has expanded rapidly. The business involves reselling unsold inventory from connected TV partners. He said the backfill business has reached 175,000 U.S. dollars in sales per day over the past three months, representing a CAD 90 million run rate.
During the question-and-answer session, Boyko said the company had hoped to reach 100,000 U.S. dollars per day in backfill sales and is now approaching 200,000 U.S. dollars per day. He said the growth has been supported by connected TV partners accepting audio advertising alongside video inventory.
“Today, we stand as one of the few players, and I would say the only one, able to sell audio ads on connected TVs,” Boyko said.
He said combined programmatic ad sales across Stingray and TuneIn are approaching a CAD 275 million run rate, including about CAD 185 million from TuneIn programmatic sales and CAD 90 million from backfill. Boyko said TuneIn generated roughly CAD 120 million in comparable programmatic sales last year and is now running at about CAD 185 million.
Quarterly Results Include Net Loss on Radio Charge
Interim Chief Financial Officer Marie-Hélène Tony said the fourth-quarter revenue increase was mainly driven by advertising and subscription revenue from TuneIn, as well as greater equipment sales related to The Singing Machine acquisition. Those gains were partially offset by a negative foreign exchange impact.
By geography, Canadian revenue fell 5.5% to CAD 44.2 million, mainly due to lower radio revenue from softer airtime sales. U.S. revenue rose 117% to CAD 82.5 million, while revenue from other countries declined 0.6% to CAD 11.1 million, reflecting lower subscription revenue partly offset by higher FAST channel sales.
Broadcasting and commercial music revenue increased 68.4% to CAD 108.8 million in the quarter, while radio revenue declined 7.5% to CAD 21.1 million. For the full year, Tony said broadcasting and commercial music revenue reached CAD 339 million, with advertising in that division rising 74% to CAD 150.7 million. Equipment and labor revenue increased 63% to CAD 46.1 million, while subscription revenue grew 2% to CAD 142.3 million.
Stingray reported a fourth-quarter net loss of CAD 64.6 million, or CAD 0.95 per diluted share, compared with net income of CAD 7.7 million, or CAD 0.11 per diluted share, a year earlier. Tony attributed the decline primarily to a CAD 64.7 million goodwill and license and permit charge in the radio division, along with higher acquisition costs, amortization expenses and restructuring costs.
Adjusted net income rose to CAD 20.8 million, or CAD 0.31 per diluted share, from CAD 18.6 million, or CAD 0.20 per diluted share, in the prior-year quarter.
Margins and Cash Flow
Adjusted EBITDA margin declined to 30.8% in the fourth quarter from 36.5% a year earlier. Tony said the margin decline reflected lower gross margins on higher sales related to TuneIn and The Singing Machine acquisitions.
Boyko said Stingray is maintaining its adjusted EBITDA margin target of 35% and sees potential for long-term margin expansion as TuneIn synergies scale. He said some early TuneIn-related advertising synergies initially carried no gross margin, but by March the company had adjusted its approach and backfill was generating gross margin above 30%.
Cash flow from operating activities was CAD 35.2 million in the fourth quarter, down from CAD 39.7 million a year earlier, due mainly to increased legal fees and settlements and higher restructuring and other expenses. Adjusted free cash flow rose to CAD 20.1 million from CAD 18.4 million.
Stingray ended the quarter with CAD 20.7 million in cash and cash equivalents and credit facilities of CAD 524.1 million. Net debt totaled CAD 503.4 million, up CAD 1 million sequentially, while the leverage ratio improved to 2.38 times. Tony said Stingray repurchased 185,772 shares for CAD 2.8 million in the quarter and 1.1 million shares for CAD 12.9 million during the fiscal year under its normal course issuer bid.
Retail Media and Radio Outlook
Boyko said Stingray continues to work on retail media, including integrating DMI and Walgreens and shifting toward more managed services accounts. He said managed services can improve EBITDA margins because Stingray charges a fee rather than recognizing a larger gross sales amount and sharing revenue with retailers.
He also said the company is working to introduce programmatic advertising into retail media, which he described as a potential “game changer.” Boyko said Stingray has about CAD 400 million of unsold retail media inventory, and he expects activity over the next two quarters. In the Q&A, he said the main challenge is not technology but agency acceptance of a “multiplier” that reflects multiple people hearing an audio ad inside a retail store.
In radio, Boyko said the fourth quarter was the toughest since COVID, citing softer airtime sales and weakness in online gambling advertising in Ontario. He said radio is on budget in the first quarter of fiscal 2027 and that Stingray expects digital advertising to help offset declines in terrestrial radio. He also said Stingray expects radio EBITDA to grow in dollars this year and next year under the company’s budget.
Management Points to Strong Start to Fiscal 2027
Boyko said Stingray has had an “exceptional” start to fiscal 2027, calling it “probably the best start of the year” since he became CEO. He said organic sales in April and May were well above 20%, compared with 11.7% organic growth in the fourth quarter, and June was looking stronger.
In response to analyst questions, Boyko said Stingray’s standalone budget for the year anticipates 12% to 14% growth, excluding some TuneIn-related revenue synergies. He also said management’s budget is above analyst consensus for EBITDA, though he asked analysts not to change their estimates based solely on the comment.
Boyko said Stingray remains focused on executing the TuneIn acquisition and expects leverage to be near or below two times EBITDA by December and “well below” two times by the end of the fiscal year.
About Stingray Group (TSE:RAY.A)
Stingray Group Inc is a music, media, and technology company. The company is a provider of curated direct-to-consumer and B2B services, including audio television channels, radio stations, SVOD content, 4K UHD television channels, karaoke products, digital signage, in-store music, and music apps. It operates through the following segments namely the Broadcasting and commercial music segment and Radio segment. The company generates maximum revenue from the Broadcasting and commercial music segment.
