Stingray Group Q3 2026 Earnings Report

Stingray Group EPS Results

• Actual EPS: C$0.38
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Stingray Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Stingray Group Announcement Details

• Quarter: Q3 2026
• Date: 2/10/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, February 11, 2026
• Conference Call Time: 10:00AM ET

Stingray Group (TSE:RAY.A) 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.

Stingray Group Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Stingray reported record Q3 results with revenues of CAD 124.8M, adjusted EBITDA of CAD 44.5M and adjusted free cash flow of CAD 34.8M, driven by TuneIn and FAST/car expansions.
• Positive Sentiment: The TuneIn acquisition is outperforming expectations with an initial run-rate of ~CAD 16M in revenue synergies and ~CAD 5M in cost savings, and management reiterates targets of CAD 20M–40M revenue synergies and CAD 10M–15M cost savings within ~18 months (reported in USD).
• Positive Sentiment: Management highlights a large monetization runway—over CAD 200M of unsold FAST inventory and > CAD 400M of unsold retail media inventory—and rapid programmatic growth (from zero to a ~500k/day run rate), signaling significant ad-revenue upside.
• Positive Sentiment: Distribution is expanding via new OEM deals (BYD, Mercedes pre‑installed on MBUX in H1 2026, Nissan) integrating Stingray Music, Karaoke and TuneIn, which should drive long‑term, sticky in‑car revenue despite multi‑year rollout timelines.
• Negative Sentiment: Margins and reported net income were weaker year‑over‑year—adjusted EBITDA margin fell to 35.7% (from 38.9%) and net income was CAD 7.5M vs CAD 15.7M—while net debt rose to CAD 502.3M (leverage 2.49x); management’s top priority is reducing leverage below 2.0x by year‑end.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to Stingray Group's Third-Quarter 2026 Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Wednesday, February 11th, 2026. I would now like to turn the conference over to Mathieu Péloquin. Please go ahead.

[Mathieu Péloquin, VP of Investor Relations at Stingray Group]

Thank you, Bonjour, Mathieu. Good morning, everyone, and thank you for joining us for Stingray's conference call for the third quarter of fiscal 2026, ended December 31, 2025. Today, Eric Boyko, President, CEO, and Co-founder, as well as Marie-Hélène Fournier, Interim Chief Financial Officer, will be presenting Stingray's operational and financial highlights. Our press release reporting Stingray's third quarter results was issued yesterday after the market closed. Our press release and MD&A and financial statements for the quarter are available on our investor website at stingray.com and SEDAR+. I will now provide you with the customary caution that today's discussion of the corporation's performance and its future prospect may include forward-looking statements. The corporation's future operation and performance are subject to risk and uncertainties, and actual results may differ materially.

[Mathieu Péloquin, VP of Investor Relations at Stingray Group]

These risk and uncertainties include but are not limited to the risk factors identified in Stingray's annual information form dated June 10, 2025, which is available on SEDAR+. The corporation specifically disclaims any intention or obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise except as may be required by applicable law. Accordingly, you're advised not to place undue reliance on such forward-looking statements. Also, please be advised that some of the financial measures discussed over the course of this conference call are non-IFRS. Refer to Stingray's MD&A for complete definition and reconciliation of such measures to IFRS financial measures. Finally, let me remind you that all amounts on this call are expressed in Canadian dollars unless otherwise indicated. With that, let me turn the call over to Eric.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Okay. Merci, Mathieu. Good morning, everyone, and thank you for joining us for our Third-Quarter Fiscal 2026 Earnings Calls. I want to begin the call with talking about the significant progress that Stingray has made in positioning itself for long-term sustainable growth. We have built a unique and powerful position in the market, and I want to share with you the framework that will underpin our strategy. Stingray is built on three pillars that work together to drive our growth: distribution, monetization, and content. Our first pillar, distribution. Our purpose is simple: to be everywhere our listeners are. We have executed on this, and today, Stingray is the most widely distributed streaming media company across the platforms that are now part of our daily lives. We are the most widely distributed music player on connected TVs, smart speakers, mobile devices, connected cars, and thousands of retail stores.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

This massive footprint is our core strength. We have built our services directly into the device people use every day, making our content very easy to access. This gives us a powerful and lasting advantage that is difficult for anyone to replicate. As of today, we estimate that we have over $200 million of FAST channels unsold inventory and over $400 million of unsold retail media inventory. As you can see without reveals, we are quickly building our car inventory. Second, our second pillar, monetization, that we like the word monetization. Having a massive audience is one thing. Monetizing it effectively is another. With the acquisition of TuneIn, we now have a world-class advertising engine to turn our reach into revenue. We have the technology, the ad stack, and the right demand side partnership to sell both audio and video ads across our entire network.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

For advertisers, this is a game changer. They can now come to one place, Stingray, to connect with a global audience through their TVs, their speakers, their cars, and at retail. This unified platform creates a predictable and highly scalable revenue stream for our businesses. So we have distribution. We have the monetization engine. That brings me to our third and perhaps the most important pillar, content. So in terms of monetization, we feel that we will be achieving 500,000 a day of programmatic sales. A year ago, when we were talking at this time, our sales of programmatic was zero. And now our run rate is 500,000 a day. That's $102 million, CAD 250 million. So when you talk about growth going from zero-250, that's a great new vector. Well, content. What is the fuel or entire model, and what truly sets us apart?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

While other streaming compete in the expensive, very expensive world of on-demand music, we have built a smarter model focused on creation. We create expertly crafted playlists, engaging karaoke experiences, and a world-class catalog of recorded concerts. This strategy gives us something very powerful: unmatched and scalable unit economics. Our content costs do not grow at the same pace of our audience. As we reach more listeners, our models become more profitable. We deliver premium experiences to hundreds of millions of users without the prohibitive costs that challenge others in the industry. It is a smarter, more sustainable way to growth. This is the story of Stingray, a company with unmatched reach, a world-class advertising engine, and a unique content strategy. We are building a scalable platform for the future of streaming. The results we are sharing today are a direct outcome of this focused strategy.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Let me now turn to review our third-quarter fiscal 2026. Stingray announced exceptional third-quarter results for fiscal '26 with revenues and adjusted free cash flow reaching record levels. On a consolidated basis, Stingray generated adjusted EBITDA of CAD 44.5 million and adjusted free cash flow of CAD 34.8 million on revenues of CAD 124.8 million in the third quarter. This highlights the positive impact of its recent TuneIn acquisition and the continued expansion of the high-growth areas like FAST channels and car entertainment. Fast channels are a particularly robust financial result as we leverage Stingray's premium ad networks, which we call a backfill, to monetize unsold inventory and benefit from new deployment across the LG platform. In addition, the integration of TuneIn has progressed even better than planned.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Following the closing of this transformative acquisition on December 19th, TuneIn's performance has exceeded our expectations, creating powerful new synergies that are already reflected in our strong financial performance. Revenue synergies with TuneIn reach an annual run rate of CAD 16 million in revenues and CAD 5 million in cost savings. As a reminder, we have established synergy goals for sales between CAD 20 million-CAD 40 million of cross-selling and for cost saving between CAD 10 million-CAD 15 million in the next 18 months or before March 27th. So we started the year, let's say, on a fast track. On the in-car entertainment side, our recent agreement with world-class automotive brands like BYD, Mercedes, and Nissan are a powerful validation of our in-car entertainment strategy.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

By integrating our full suite of products from Stingray Music and karaoke to the rich content of TuneIn, we are cementing our role as an essential partner for the connected cars. These new partnerships typically expand our global footprint and accelerate our momentum. At BYD, we raised our partnership to a new level through an OEM radio deal involving the integration of our full suite of products, including Stingray Music and TuneIn, under the BYD Audio by Stingray Brands, Stingray Karaoke, and Calm Radio. Turning to Mercedes, we will launch Stingray Music and Stingray Karaoke application in all vehicles equipped with our latest MBUX information system. This application, which will be immediately pre-installed on Mercedes cars, is expected to be released in the first half of calendar 2026.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Just last week, we announced a collaboration with Nissan to bring a unique tuning offering to select Nissan and Infiniti vehicles in the United States. As a result, drivers will gain access to live sports, breaking news, creative music, millions of podcasts, and tens of thousands of radio stations on the latest Nissan infotainment system. These partnerships do not only strengthen Stingray's global automotive presence but also accelerate the rollout of branded in-vehicle audio experiences. Amid this flurry of activity, revenues for our broadcasting and commercial music business grew by 22% to CAD 88 million in the third quarter of 2026, while radio revenues rose 2% to CAD 36.7 million. In terms of our radio business, we entered into an agreement to acquire the asset of CHUP-FM in late November to solidify our position in the Calgary market.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

More specifically, this deal will enable us to improve efficiency and achieve economies of scale since we already own two other radio stations in the market. Although Stingray Radio owns altogether, Stingray Radio owns and operates 32 radio licenses in Alberta and 96 radio stations across Canada. Calgary transaction is subject to CRTC approval, why we expect it to close in the second quarter of fiscal 2027. Finally, I would like to reiterate the relative strength of our balance sheet post-acquisition. We are very happy to show that our leverage ratio is below 2.8 that we had told the market for the third quarter, and we ended December 31st at 2.49 ratio. So a very good closing, very good cash flow for the company.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Looking ahead for the next 12 months, reducing our debt will be our top of our capital allocation priorities, with a target set to drop below 2x EBITDA by the end of calendar year, so by the end of December. So a very quick delivery of this acquisition. Consequently, we believe Stingray's path to value creation will be marked by accelerated EBITDA growth and free cash flow generation in upcoming quarters. I will now call over the call to Marie-Hélène for a financial overview of the quarter, and I will be pleased to ask questions. Merci, Marie.

[Marie-Hélène Fournier, Interim CFO at Stingray Group]

Bon matin. Good morning, everyone. Thank you, Eric. Revenues reached CAD 124.8 million in the third quarter of fiscal 2026, up 15.4% from CAD 108.2 million in Q3 2025. The year-on-year growth was mainly driven by enhanced advertising revenues from the recent TuneIn acquisition, higher equipment sales related to the acquisition of the singing machine, and greater fast channel revenues. Revenues in Canada decreased 1.1% to CAD 53.6 million in the third quarter. The year-over-year decline can be attributed to lower equipment and installation sales related to digital signage, partially offset by higher radio revenues. Revenues in the U.S. grew 42.5% to CAD 60.3 million in Q3 2026, reflecting enhanced advertising revenues from the recent TuneIn acquisition, higher equipment sales related to the singing machine, company transactions. Revenues in other countries decreased 6.7% to CAD 10.9 million in the most recent quarter.

[Marie-Hélène Fournier, Interim CFO at Stingray Group]

The year-over-year decline was mainly due to lower subscription revenues, partially offset by greater FAST channel sales. Looking at our performance by business segment, broadcasting and commercial music revenues increased 22% to CAD 88.1 million in the third quarter of 2026. The growth was driven by enhanced advertising revenues from the recent TuneIn acquisition, higher equipment sales related to the acquisition of the singing machine, and greater FAST channel revenues. For their part, radio revenues rose 2% to CAD 36.7 million in Q3 on higher digital advertising sales, partially offset by lower airtime revenues. In terms of adjusted EBITDA, Stingray also reported record numbers. Consolidated adjusted EBITDA improved 5.7% to CAD 44.5 million in the third quarter. Adjusted EBITDA margin reached 35.7% in Q3, compared to 38.9% for the same period in 2025.

[Marie-Hélène Fournier, Interim CFO at Stingray Group]

The increase in adjusted EBITDA was mainly driven by organic revenue growth as well as the impact of the acquisitions.

[Marie-Hélène Fournier, Interim CFO at Stingray Group]

The decline in EBITDA margin, meanwhile, can be attributed to lower gross margin on sales related to the TuneIn and the Singing Machine acquisition. By business segment, broadcasting and commercial music adjusted EBITDA grew 4.6% to CAD 33 million in the third quarter. Like consolidated adjusted EBITDA, the increase was due to organic revenue growth as well as the impact of the acquisition. adjusted EBITDA for our radio business improved 5.5% year-over-year to CAD 13.2 million in the third quarter on the strength of higher revenues.

[Marie-Hélène Fournier, Interim CFO at Stingray Group]

In terms of corporate adjusted EBITDA, it amounted to CAD -1.7 million in the third quarter of 2026, compared to CAD -2 million in the third quarter of 2025. Stingray reported net income of CAD 7.5 million or CAD 0.11 per diluted share in the third quarter of 2026, compared to CAD 15.7 million or CAD 0.23 per diluted share in Q3 2025.

[Marie-Hélène Fournier, Interim CFO at Stingray Group]

The year-over-year decline was mainly due to the higher performance and therefore shared units expense related to an increase in the corporation share price, as well as greater acquisition, legal restructuring, and other expenses. These factors were partially offset by an unrealized gain on the fair value of derivative financial instruments and by a foreign exchange gain. Adjusted net income totaled CAD 26.3 million or CAD 0.38 per diluted share in Q3 2026, compared to CAD 23.4 million or CAD 0.34 per diluted share in the same period in 2025. The increase can be attributed to a foreign exchange gain and higher operating results, partially offset by greater income tax expense. Turning to Liquidity and Capital Resources. Cash flow from operating activities amounted to a record CAD 38 million in Q3 2026, compared to CAD 35.4 million in Q3 2025.

[Marie-Hélène Fournier, Interim CFO at Stingray Group]

The year-over-year improvement was mainly due to a foreign exchange and positive net change in non-cash operating items. These factors were partially offset by higher acquisition, legal restructuring, and other expenses. Similarly, adjusted free cash flow reached a peak level in the most recent quarter. Adjusted free cash flow totaled CAD 34.8 million in Q3, compared to CAD 28.6 million in the same period of 2025. The improvement can be attributed to higher operating results combined with lower income taxes and interest rates. From a balance sheet standpoint, Stingray had cash and cash equivalents of CAD 17.3 million at the end of the third quarter and credit facilities of CAD 519.7 million. Net debt at the end of the third quarter of 2026 totaled CAD 502.3 million, up CAD 181.2 million from the end of Q2 2026, mainly due to outlays related to business acquisitions.

[Marie-Hélène Fournier, Interim CFO at Stingray Group]

As I mentioned earlier, our leverage ratio stood at 2.49x at the end of the third quarter. We intend to bring it down under 2x over the next few months or by the end of the calendar year, by diligently reducing our debt and generating higher adjusted EBITDA. Finally, we repurchased 303,000 shares for a total of CAD 3.8 million during the third quarter under our NCIB program. This ends my presentation. I will now turn the call over to Eric.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Okay, Marie. This concludes your prepared remarks. I hope you liked my introduction. At this point, Marie-Hélène and I will be pleased to answer your questions. Back to you guys.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchscreen phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. And if you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from Stephanie Price at CIBC. Please go ahead.

[Sam Schmidt, Equity Research Associate at CIBC]

Hi there. It's Sam Schmidt on for Stephanie Price. Appreciate the disclosure around the run rate TuneIn revenue synergy figures. How are you thinking about the cross-selling opportunity from here, and what gets you to the top versus bottom end of that $20 million-$40 million target? Thanks.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

You know what? We started. It was very interesting. The deal wasn't even closed because we announced the deal, and we had two weeks to wait for the Competition Bureau. And I think three days later, we already had eight different vectors that TuneIn is already helping us sell. So what are we selling? They're helping us on CTV, helping us sell Calm Radio. They're helping us sell ads on Stingray Music. They're helping our radio team, which we sell TuneIn in Canada. So the cross synergies, we have over nine products. We quickly achieved, just in one month in January, a CAD 16 million run rate. And we said $20 million-$40 million, but right now, I would say CAD 20 million to unlimited because, like I said before, a year ago, we were doing zero in programmatic sales.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

We are very confident that by the end of this quarter, by the end of March, we will be running at $500,000 of programmatic sales on all our different platforms, which is $182 million, which is roughly CAD 250 million. So I think the cross synergies are really and the more we launch products, the more we launch cars, all of these again, we're talking about distribution, all will be not finance, all the models advertising and programmatic. And the beauty of programmatic, it's a very deep lake. And the TuneIn team is a first-class, sophisticated ad tech machine. And I think we got this merger was a perfect merger on the cross-selling. So I think the $20 million is just a starter. And very excited in June, in four months, to really give you our first quarter together and just give you a bit of feedback.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

TuneIn grew in January by 81%. So a big start of the year, January. So very happy about that. Again, we have to be careful. It was a good quarter. Last year was a bit weaker. There was the tariffs, and there was Trump and the Liberation Day when going to that debate. But a very good start of the year, so very happy.

[Sam Schmidt, Equity Research Associate at CIBC]

Thank you. Just one more for me. I wanted to ask around the cost synergies as well. Can you provide some color on those initiatives, and how are you thinking about broadcast and commercial segment margins as you work through those cost synergies? And then I'll move on to.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Yeah, very good. So in terms of cross and in terms of positives, right now, we've only focused on cost of goods sold. For example, cost of goods sold, music rights. Since we have more scale, we have better music rights, usual saving on insurance, saving on audit fees, saving on all these. So we haven't even looked yet at the personal side. Over time, there will be there are duplications in certain positions. But right now, we started the year so strong. The results are so strong on their side and our side, there's no big rush. So very confident to achieve our CAD 10 million+ of OpEx and COGS savings by year-end. And I think we might just achieve it with the COGS. We have a lot of also synergies in terms of paying the Amazon fees and also ad service fees.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

So, we're very excited once again about a great merger on both sales and cost savings. So, I would say it's a perfect marriage.

[Sam Schmidt, Equity Research Associate at CIBC]

Thank you.

[Operator]

Thank you. The next question comes from Adam Shine at National Bank Financial. Please go ahead.

[Adam Shine, Managing Director and Assistant Head of Research at National Bank Financial]

Thanks a lot. Good morning. Eric, just on the synergies, can we just confirm that these are in CAD, or are they actually in U.S.? Because I thought originally they were in CAD.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

No, so very good. We didn't realize, but we had told the markets last time when we did the deal that all these savings are in U.S. dollars. So thank you, Adam, for the question. So we had told $20 million-$40 million of positive sales and $10 million-$15 million of OpEx savings.

[Adam Shine, Managing Director and Assistant Head of Research at National Bank Financial]

Okay. Thanks for that.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

OpEx, I thought.

[Adam Shine, Managing Director and Assistant Head of Research at National Bank Financial]

Yeah. Okay. So turning next, we're seeing, obviously, some of the top-line growth. Can you speak a little bit about the possibility of margin expanding? I mean, understandably, your mix has evolved with some lower margin components that are putting a bit of pressure on the margin. But how do you see margins expanding going forward above, let's say, a 35% level?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Yeah. We did a good sheet on different margins, for sure, examples. When we get money from a FAST channel partner like from LG or Vizio, that money, in that case, is recorded net. I'm going to accounting. When we do backfilling and when we do programmatic sales, we now let's say we sell $1. Now we have to pay our partner whatever the amount, $0.35, $0.40, $0.50. So the gross margin on both products are ones at 95% gross profit, the other ones at 40%-45%. So very difficult to predict. The more we do backfilling and programmatic, it's not the same margin as getting net revenues. So I'm happy offline with Marie to explain to you, give you more guidance on the gross margin and the EBITDA margin. But there's an effect. When we sell directly, we report the numbers gross.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

So you know what I mean? I'm an accountant, so don't want to go into too much details, and I'll get you bored. I do have brown socks today.

[Adam Shine, Managing Director and Assistant Head of Research at National Bank Financial]

Okay. But my point is simply that, do you see over the next, let's say, three-five years, an opportunity to scale a mid-30% margin towards 40% or something maybe slightly above the current level?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

I think right now, we're heading globally at 35%. The programmatic sales will grow so fast that a bit of the other products that we sell with LG and with our friends at Singing Machine, I think we can expect the 35% to grow back again towards the 40%.

[Adam Shine, Managing Director and Assistant Head of Research at National Bank Financial]

Okay. And just in terms of leverage, I mean, you've done a good job in the prior two years of significantly bringing down leverage. And I think you're already doing a pretty good job in terms of bringing leverage down after TuneIn. But what's the optimal target for you on the leverage front? Do you really want to be sub-2x? Is 1.5x, frankly, too low? What's the strategy here?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

I think before, a bit more aggressive entrepreneur, our range was 2.25x-2.50x. Now, I'd say after what happened, the tariffs and COVID and all this stuff, we're getting older. So I think for Stingray, the second we get below 2x, you can start expecting capital allocation, which, again, would be increasing the dividend. We're always looking at deals, but increasing the dividend or doing more NCIB. But I was reading your report this morning, Adam. And if we expect that I think you're estimating CAD 2.32-CAD 2.40 of free cash flow per shares. If we do CAD 2.40 of free cash flow per shares, then, and our dividend policy is 20/25, then you should expect our dividend to be growing to CAD 0.45-CAD 0.50.

[Adam Shine, Managing Director and Assistant Head of Research at National Bank Financial]

Great. Okay. Thanks a lot. Appreciate it.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Thanks, Adam. Great report. Thank you very much. We love 2021.

[Operator]

Thank you. The next question comes from Aravinda Galappatthige from Canaccord Genuity. Please go ahead.

[Aravinda Galappatthige, Managing Director and Equity Research Analyst at Canaccord Genuity]

Good morning. Thanks for taking my question. I just wanted to clarify, go back to sort of the synergies on TuneIn, Eric. So I mean, the way that you kind of laid it out, the fact that you already realized on a run rate basis, the $5 million on cost, the $16 million on revenue synergies. If I were to perhaps simplify and simply add that to the EBITDA at the point of acquisition, as you announced, just $30 million, I mean, we're really talking about a bump of a little more than $50 million in U.S. dollars, that is, by the way, in EBITDA for raised numbers as we look to kind of lay out our fiscal 2027 more in a more granular fashion. I just wanted to make sure I'm properly characterizing that. Is that accurate?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Yeah. But I think roughly, you can see the cross synergies. Depending if we sell third-party and all that, roughly 40% gross margin. And the fixed costs are pretty much so you can add 40% to that. So I agree with you there. And the cost synergies are coming in over the next few months. So I think those synergies will be fully coming in our year-end 2027.

[Aravinda Galappatthige, Managing Director and Equity Research Analyst at Canaccord Genuity]

Okay. Okay. Understood.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

So for example, some of the COGS synergies are happening in February. So you're not going to get the full value. But starting April 1st, you will get full value of those synergies. And I think with Marie, we can give you more guidance of exactly when they come in and what timing. But you're exactly right. This deal with TuneIn, if it's a $50 million, like you say, was a very accretive deal that we did since we paid $150 million, excluding also the fact that we have all those incredible, fantastic tax savings.

[Aravinda Galappatthige, Managing Director and Equity Research Analyst at Canaccord Genuity]

Exactly. And then on the same subject, but more qualitatively, can you just talk about, now that you've closed the transaction, how you're sort of synthesizing your efforts in the in-car side? Because obviously, they've had their sales efforts. You've had yours. How are you kind of thinking about harmonizing that, or are you just letting that run parallel for now?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

No, no. So the day happened, the next day were one. So when you think about it, what we do right now is every deal we have, there will be in every car. So the Nissan deal was a TuneIn deal. But with Nissan, we already added Stingray Music. And we're going to be adding karaoke with BYD. BYD, we're adding TuneIn right away. So every car deal we have, and I must say, we used to play a game with Cash. We call it Corner the Market. But I think in this one, TuneIn and Stingray for the car manufacturers, they're very excited about our offering, but they were each talking to both of us, one against each other. We were the only two companies offering a model that we said, "We'll put music. We'll put TuneIn radio.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

We'll do a rev share on advertising. Our competitor, which is a known satellite company, are more in asking for a fixed price per car. But now that we merged both together, I'd say the car manufacturers are very excited. They're talking to one company. They feel that we're well-positioned. We're the only global company on music. When you think about our competitors being iHeart or XM, they're only U.S.-based. There's not many companies that are global. And when you talk to BYD and Mercedes and Nissan, they want us to be global. And also, we have the right structure of rights management. As you know, we're not on demand. We don't pay 70% rights. So we're able to offer advertising and rev shares. So I think the car manufacturer, we're talking at CES. We met all car manufacturers in the world.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

We had a BYD car there at CES in Vegas. Everybody was going crazy to see the BYD car. We had Stella, the president of BYD, with us in Vegas. So no, we're very well-positioned. I would say now, I was telling our team here, I feel we're like the Seahawks. We're winning 19-0 in the third quarter. So I think it's for us to lose this game because we're really ahead, and we don't see anybody else in the space. And I think the car manufacturers want to go faster because I think they see a clear solution. So very excited. The only negative thing about cars, cars is a long process. You don't build 1 million cars overnight. You start with your cars. But the beauty about the cars, once you're in the car, you're in the car for 10 years.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

The cars last for 11 years. So it's like doing a 20-year deal. So by the time the cars are all ready, I'm going to be 76 years old.

[Aravinda Galappatthige, Managing Director and Equity Research Analyst at Canaccord Genuity]

Okay. Thank you very much, Eric. Congrats on all of the progress.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

No, no. We're very, very happy with, again, with the monetization of the current inventory that we have of the unsold inventory.

[Operator]

Thank you. The next question comes from Jérôme Dubreuil at Desjardins. Please go ahead.

[Jérôme Dubreuil, Senior Equity Analyst at Desjardins]

Hey. Thanks for taking my questions, Beaumont, thanks, Beaumont. First one, I wanted to touch again on the synergies there. You seem to be kind of resisting the urge to change the synergy guidance. So maybe other than the initial $10 million cost savings, it now sounds like it's $10 million-$15 million. Can you agree that the lower end of the ranges seem a bit too conservative now in light of the update that you provided last night?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

No, I think on the COGS and OpEx or the sales?

[Jérôme Dubreuil, Senior Equity Analyst at Desjardins]

Yeah. Revenue and OpEx, both with the update that you provided.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Yeah. No, so on the sales side, when we said $20 million-$40 million, I said to our board yesterday, I said, "We should never say we should say $20 million and above." Right now, I think it's $20 million-$100 million. I think there is no limit to the positive sales side that we can have. We're adding an increased number of the inventory that we're adding with LG right now, with Vizio. We're adding Samsung. We're adding a lot of new partners with the cars. We're doing more retail deals. We're also discussing also with different partners. So the inventory that's coming in with our distribution is unmatched. And again, it is the chicken and the egg. So the more you have inventory, the more you monetize, the more people want to give you their inventory.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

The more you have inventory, the more you have scale, the more you can monetize. So it's a virtuous circle. And we feel very confident that and we have a daily meeting at noon every day to watch the programmatic sales. And if we're going to be doing $500,000 a day in March, I mean, if you look at the trend, that means we should be doing $1 million a day of programmatic ads in November, December, in the big months. So that's the scale of that business. It's not a business programmatic that will grow by 5%-10%. It's a business that can easily double in six months. And we have the inventory.

[Jérôme Dubreuil, Senior Equity Analyst at Desjardins]

Yeah. Follow up for me on the organic growth perspectives for TuneIn. You mentioned that they were up 81% year-over-year in January. Wondering if we can discuss maybe what are their standalone opportunities, maybe on and off platform, aside from the revenue synergies that you've already discussed?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Yeah. Good point. Again, January was a weak January last year. So everybody, we were last night, we had our LG partners in town. And I don't want to say their numbers, but they had a huge number in January. January seemed to be a very and 2026, all of our partners are saying for programmatic ads is looking like a great year. So let's see. But a very positive year on advertising for programmatic. Not only us, but we're seeing from, again, from LG, from Vizio, and Samsung. So that's good to hear. But your exact question is what?

[Jérôme Dubreuil, Senior Equity Analyst at Desjardins]

I want to hear whether their standalone opportunities, maybe they can help monetize other audio platforms that are outside of the Stingray ecosystem. Maybe, is that still on the table?

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Absolutely. We have deals that have been announced or that I guess we'll be able to announce. But I think you'll be surprised by how many third-party platforms that we're reselling on. TuneIn really developed an ad tech selling platform that is able to sell to third parties. And the third parties are approaching us and don't want to get all the details to really leverage their inventory. And in radio, believe it or not, in radio, there's more demand than there is inventory. I know you're going to say it's impossible. But right now, with terrestrial radio declining, a lot of audio ads, people are looking to where they can advertise. So there's more demand right now than there is inventory. And TuneIn is tapped into all these partners. So it's a very exciting time where we're positioned.

[Jérôme Dubreuil, Senior Equity Analyst at Desjardins]

Great. Merci beaucoup.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Merci, Jérôme.

[Operator]

Thank you. The next question comes from Drew McReynolds at RBC. Please go ahead.

[Drew McReynolds, Managing Director at RBC]

Yeah. Thanks very much. Good morning, Eric. I'll say you don't see a perfect marriage very often from my experience. So good to see all of this goodness coming through. Two follow-ups. One, on the connected car side, are you able to just size up at a 30,000-foot view the revenue kind of contribution maybe in fiscal 2026 and then what that could look like in fiscal 2027? And then the second question just on TuneIn and subscription revenue. I know this is not necessarily the focus of the acquisition, but just maybe some updated expectations around that revenue bucket. Thank you.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Yeah. So the car business, again, car business is growing well. Car business is growing by 40%-50%. Still a small number. This year, we'll do above $10 million. I think the numbers should double next year. Again, it's a long curve. But once you're in the cars, you're in forever. So I think the car business, we're really investing for the next 10 years. So this year, let's say we'll go from $10 million-$20 million. But we won't go from $10 million-$100 million in the car business. It's just all the deals, they have to produce the cars, and then we got to start selling the ads. So we love the business. It's good.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

And again, a lot of partners. Every time we win a deal, you can imagine that the people that are in the cars or want to be in the cars, the Amazon, the Google, the Apple, they start calling us and say, "Hey, you're with this car. How can we be your partner in that car? How can we sell advertising with you in this car?" So we're really attracting all of the big players because they're not in the cars. So it's going to be interesting, the monetization and the growth of each of these deals. But it's a long-term once you sign, it's a long time to implement and to produce the cars. It's not as fast as the FAST channels. So that was your first question. And Drew, your second question?

[Drew McReynolds, Managing Director at RBC]

Yeah. Just on the TuneIn subscription revenues, I don't know.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Yeah. Good point.

[Drew McReynolds, Managing Director at RBC]

Your focus of the acquisition. So just update there. Yeah.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Yeah. So when we did the deal with TuneIn, and we told this to the board and the market, so advertising growing very aggressively. We had budgeted for subscription to be down by 9%. In Q1, we're slightly better at 6%. So our goal is to become flat. The focus of the company for the last three years was really to sell the inventory. And now one of our focus, and we have a team put together, is to bring new content to the subscription and at least have a subscription that is stable. But the growth of TuneIn and the growth of Stingray is going to be programmatic sales for the next three-five years. Subscription for us is going to be a nice add-on.

[Drew McReynolds, Managing Director at RBC]

Yeah. Got it. Very helpful. Thank you.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Drew, it's a perfect wedding because it's like the Royal Bank. It's a royal wedding.

[Drew McReynolds, Managing Director at RBC]

I love it.

[Operator]

Thank you. The next question comes from Tim Casey at BMO. Please go ahead.

[Tim Casey, Managing Director and Senior Equity Analyst at BMO]

Questions have been asked and answered. Thank you.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Thank you, Tim.

[Operator]

Thank you. At this time, I'll turn the call back over to Eric Boyko for closing comments.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

All right. Hey. So I hope that you liked our little introduction. A couple of points that we didn't talk today, I think it's important. We also announced a bit of a big move, the one ticker. What's the timing of this? With the deal of TuneIn, we met with all their U.S. largest investors, met with a lot of their investors. The TuneIn team was very well connected in the U.S. And we quickly realized that having the Ray A, Ray Bs, if you're American, you have to buy Bs, but there was no market on Bs and the As. And so we work hard to make it simple. The goal is to increase the liquidity for both Canadians and Americans to buy one symbol and not have two tickers. So I think all the banks did it. Canada did it. All the telecoms did it.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

And so our goal here is really to increase U.S. investors. We're going to be looking for U.S. coverage. And we will be much more aggressive since TuneIn is a well-known brand, and we do 60% of our sales in the U.S. to really attract a good U.S. investor base. And every media company in the world, every tech company in the world has been able to grow their market cap and their multiple by having U.S. investors. We love Canada. We love Quebec. But we have to be world winners. So very excited about the ticker. So hopefully, we'll see the impact of that over the next few quarters. And we'll see more of our U.S. friends buying our shares. So that was also a big move for us and excited to see the impact of that. So with this in mind, I'll say thank you very much.

[Eric Boyko, Co-Founder, President and CEO at Stingray Group]

Merci beaucoup. Excited for our next call because it's year-end is only in June. We have four months until we see each other. I will miss you great analysts. If you have friends in the U.S. that want to cover us, give me their names. Merci tout le monde.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

Participants

Executives

• Eric Boyko, Co-Founder, President and CEO
• Marie-Hélène Fournier, Interim CFO
• Mathieu Péloquin, VP of Investor Relations

Analysts

• Adam Shine, Managing Director and Assistant Head of Research at National Bank Financial
• Aravinda Galappatthige, Managing Director and Equity Research Analyst at Canaccord Genuity
• Drew McReynolds, Managing Director at RBC
• Jérôme Dubreuil, Senior Equity Analyst at Desjardins
• Sam Schmidt, Equity Research Associate at CIBC
• Tim Casey, Managing Director and Senior Equity Analyst at BMO