Stingray Group (RAY-A) Q1 2027 earnings summary

Executive summary

• Q1 2027 revenue grew 65.2% year-over-year to $158 million, driven by the TuneIn acquisition, FAST Channel performance, and strategic advertising expansion.

• Organic revenue growth reached 27.5% year-over-year, with significant momentum in advertising and programmatic sales.

• Adjusted EBITDA rose 49.3% to $50.3 million, reflecting operational leverage and cost synergies, while net income dropped 60.7% to $6.6 million due to higher acquisition costs and amortization.

• Advertising revenue surged 236% year-over-year, marking a third consecutive year of 40%+ growth.

• Share buybacks totaled 1.1 million shares for $17.1 million, impacting leverage and capital allocation.

Financial highlights

• Adjusted Net income increased 31.1% to $27.9 million ($0.40 per diluted share) year-over-year.

• Adjusted EBITDA margin was 31.8% in Q1 2027, down from 35.2% a year earlier.

• Cash flow from operating activities dropped to $4.8 million from $19 million, mainly due to timing of receivables and higher acquisition costs.

• Adjusted free cash flow rose 72.8% to $32.5 million.

• Net debt at quarter-end was $547.6 million, with a net debt to Pro Forma Adjusted EBITDA ratio of 2.53x.

Outlook and guidance

• Double-digit organic revenue growth expected for fiscal 2027, led by TuneIn and FAST Channels.

• Adjusted EBITDA margin targeted to return toward 35% in the next few quarters as product mix and margin management improve.

• Leverage ratio targeted to decrease to approximately 2.0x by year-end through disciplined free cash flow generation.

• Strong momentum anticipated in Q2 and Q3, especially with the start of the football season and expanded audio ad inventory.

• Sufficient liquidity is anticipated from operations and available credit facilities to meet foreseeable needs.