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Canada's Stingray Q1 revenue beats estimates but margins weigh on profit

Canada's Stingray Q1 revenue beats estimates but margins weigh on profit


Overview

  • Canada streaming media firm's fiscal Q1 revenue rose 65% yr/yr, beating analyst expectations

  • Adjusted EPS for fiscal Q1 missed analyst expectations

  • Company repurchased and cancelled 1.1 mln shares for C$17.1 mln in fiscal Q1


Outlook

  • Stingray confident that TuneIn and FAST channel will contribute to double-digit organic revenue growth for fiscal 2027

  • Stingray says TuneIn, FAST margins are modestly lower than avg, hence it is maintaining its optimistic outlook for adjusted EBITDA margin for the fiscal year

  • Company expects radio sales to remain relatively stable in fiscal 2027

  • Stingray aims to reduce net debt to Pro Forma Adjusted EBITDA ratio to about 2.0x by year-end


Result Drivers

  • TUNEIN ACQUISITION - Higher advertising revenue from the TuneIn acquisition was a major driver of revenue growth

  • FAST CHANNEL SALES - Increased sales in the FAST channel segment contributed significantly to revenue growth

  • LOWER RADIO REVENUE - Radio revenues declined due to reduced local and national airtime, partially offset by digital sales

  • MARGIN PRESSURE - Adjusted EBITDA margin declined due to lower gross margins from TuneIn and The Singing Machine product offerings, and a shift in product mix


Company press release: ID:nGNX8BRptK


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q1 Revenue

Beat

C$158 mln

C$149.60 mln (4 Analysts)

Q1 Adjusted EPS

Miss

C$0.40

C$0.47 (5 Analysts)

Q1 Adjusted Net Income

Beat

C$27.90 mln

C$25.74 mln (2 Analysts)

Q1 Net Income

C$6.60 mln

Q1 Adjusted EBITDA

Slight Miss*

C$50.30 mln

C$50.32 mln (5 Analysts)

Q1 Operating Cash Flow

C$4.80 mln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the broadcasting peer group is "buy"

  • Wall Street's median 12-month price target for Stingray Group Inc is C$21.00, about 36.4% above its August 7 closing price of C$15.40

  • The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 7 three months ago


Reuters Recommended Reads

  • Aug 7 - Starz Q2 revenue slightly beats estimates on OTT growth

  • Aug 7 - Take-Two Q1 revenue beats on videogame franchise performance

  • Aug 7 - TDS Q2 revenue misses estimates on legacy declines


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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