Stingray Group (RAY-A) Q2 2025 earnings summary

Executive summary

• Revenues for Q2 2025 rose 13.4% year-over-year to $93.6 million, driven by strong growth in FAST channels and digital signage equipment sales.

• Broadcasting and commercial music revenues increased 22.2% to $60.9 million, while radio revenues remained stable at $32.7 million.

• Adjusted EBITDA rose 15.2% to $34.0 million (36.3% margin), with net income declining to $5.8 million due to unrealized derivative losses and FX impacts; adjusted net income improved to $16.7 million.

• Strategic growth areas include FAST channels, retail media, and in-car entertainment, supported by new partnerships, product launches, and the acquisition of The Coda Collection.

• Organic growth (excluding radio) reached 15.6% year-over-year, marking four consecutive quarters of double-digit increases.

Financial highlights

• Adjusted net income was $16.7 million ($0.24/share), up from $14.6 million ($0.21/share) year-over-year.

• Adjusted free cash flow increased to $21.1 million, up from $14.6 million year-over-year.

• Net debt at quarter-end was $367.5 million, with a net leverage ratio of 2.72x pro forma adjusted EBITDA.

• Cash flow from operations was $19.2 million, nearly flat year-over-year.

• Dividend declared at $0.075 per share, payable December 13, 2024.

Outlook and guidance

• Management expects to maintain or exceed a 35% EBITDA margin, with current performance tracking above this level.

• Growth in FAST channels, retail media, and connected car segments is expected to continue, with annual growth targets above 40%.

• Leverage ratio targeted to fall between 2 and 2.5 times by fiscal year-end, with a focus on deleveraging and potential acquisitions once the target is reached.

• Retail media customer wins and in-car entertainment expansion are expected to contribute meaningfully in the second half and beyond.

• Ongoing expansion in the US and international markets through new partnerships and product launches.