Stingray’s acquisitions boost quarterly revenue
A series of acquisitions helped drive an almost 20 per cent increase in quarterly revenue for Montreal-based Stingray Digital Group.
The results for the three-month period that ended on June 30, which were released on Wednesday, come two days after the company announced it had purchased two Australian companies that sell background music and other media services to retailers; deals worth a total of just under $11 million.
Acquisitions play a major role in the company’s growth strategy, Stingray CEO Eric Boyko said on a conference call with investors, and the company’s goal is to spend $25 million on acquisitions every year.
In the past four months, the first four months of the company’s fiscal year, it has already made almost $27 million worth of acquisitions, Boyko said.
While that means there’s no pressure for the company to make more acquisitions this year, Boyko said, more are in the works.
“Our pipeline of acquisition opportunities remains significant and we expect to maintain the M&A pace in the current fiscal year,” he said. “We’re not going to stop doing acquisitions.”
Stingray, which sells a variety of music-related services to other businesses, reported revenue of $29 million during the quarter, up 18.9 per cent from $24.5 million during the equivalent period last year.
However, net income was down from $2 million last year to $280,000 during the quarter.
The company attributed that to higher legal fees, a decline in the fair value of investments and higher amortization expenses.
Adjusted earnings before interest, taxes, depreciation and amortization rose to $9.2 million during the quarter, up from $7.9 million during the equivalent period in 2016.
The company is particularly focused on expanding its business in the United States and has made deals with AT&T, Comcast and Amazon which sell its products, particularly its streaming video on demand service, to their customers. That service now has more than 100,000 paying subscribers in North America and Europe, the company said.
U.S. revenue grew 65 per cent during the quarter, to $4.5 million, and now accounts for 15 per cent of total revenue. That helped to increase the company’s international revenue.