[Foreign Language] Good morning. Thank you for joining us on Stingray's Conference Call for the Second Quarter ending September 30, 2017.

Today, Eric Boyko, President and CEO and co-founder; and Jean-Pierre Trahan, Chief Financial Officer will be presenting Stingray's financial and operational highlights. Our press release reporting Stingray's second quarter results was issued this morning before the market opened.

Our press release, MD&A and financial statements for the quarter are available on our investor website at stingray.com and on SEDAR. I will now give you the customary caution that today's discussion of the corporation's performance and its future prospects may include forward-looking statements.

The corporation's future operation and performance are subject to risks and uncertainties, and actual results may differ materially. These risks and uncertainties include, but are not limited to the risk factors identified in Stingray's Annual Information Form dated June 8, 2017, 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 not -- you are advised not to place undue reliance on such forward-looking statements.

Thank you. And I will now pass the call to Eric.

[Foreign Language] Good morning, everyone. Before I provide you with key operational highlights for our second quarter of fiscal 2018, I'll give you a financial summary of the quarter.

Our second quarter result reflects solid and continued momentum in our business strategy and execution. We are extremely pleased by Stingray's revenue growth of 24.7%, of which approximately 8% is related to organic growth as a result of Stingray's aggressive diversification in content over the last years.

For the same period adjusted EBITDA also performed solidly with an increase of 15%. For the quarter, recurring revenue remained a major component of total revenues, representing 86% and adjusted free cash flow increased by 26% to $6.9 million.

Our success south of the border merits special emphasis. From a negligible presence there years -- 3 years ago, we are making major inroads into the largest and likely most competitive market for music services in the world.

For the second quarter, we achieved spectacular growth of 70%. The growth was supported by the acquisition of Yokee Music together with solid traction for Subscription Video On Demand or SVOD Services.

To put this in perspective, after 6 months, the U.S. accounted for 16% of our total revenues.

As a whole, we have strongly executed on our geographic diversification, revenues outside of Canada represents more than 50% of total revenues. In July, we completed the acquisition of Satellite Music Australia and SBA Music in the Asia-Pacific region.

More recently, we signed our largest in-store media solutions contract in Mexico with our partner Basha. The 4-year agreement, in which Farmacias Del Ahorro, one of Mexico's largest drugstore chains.

The transaction will bring custom music programming and digital signage technology to over 1,600 pharmacies and clinics across Mexico. Further to my comment about SVOD services, we now have more than 218,000 SVOD customers, which number includes B2C subscribers.

We offer these services via providers such as Amazon, Comcast, AT&T, Telefónica and Free. At the end of the fourth quarter, we had 79,000 subscribers.

By the -- the first quarter of this year we had almost double that number, which now stands at 218,000. We just started -- we are just starting and see plenty of opportunities to expand this SVOD market, which is exploding as we speak and expects to reach $32 billion by 2020.

On another note, we have incurred significant but nonrecurring legal fees over the past several months or so in the connection with the preparation and filing of inter partes review proceedings before the patent trial and appeal board of the United States Patent and Trademark Office, in order to establish the invalidity of the Music Choice patent portfolio. The board recently initiated IPR proceeding against each of the named patents, so 5 out of 5 in the Music Choice patent infringement complaint.

And on November 1, 2017, the judge proceeding over the patent infringement lawsuit in Texas, granted the Corporation's motions to adjourn the lawsuit and ordered that the current trial date and all remaining scheduled deadlines should be canceled pending on the hearing of the Corporation's motion to stay. So we're very pleased with the money invested and our position regarding these patents.

Finally, recently we raised equity for net proceeds of approximately $43.3 million, we took advantage of the strong demand for our stock to reinforce our balance sheet. The proceeds combined with our revolving facility will support Stingray's acquisition strategy and ambitious business plan in the years ahead.

We entered our third year as a public company and we have great confidence in our capacity to create value for our shareholders and return cash to them. So with all these good results, I'll pass you to Mr.

Jean-Pierre.

[Foreign Language] Good morning, everyone. Before I begin, let me remind you that all amounts are expressed in Canadian dollars, unless otherwise indicated.

For the second quarter, revenues increased 24.7% to $30.6 million compared with revenues of $24.5 million a year ago. The increase was primarily due to the acquisition of Yokee Music and Classica, combined with organic growth of SVOD in the United States, as well as additional music and equipment sales in Commercial Music.

Recurring revenues were up 21.3% to $26.2 million or 85.6% of revenues from $21.6 million a year ago. When compared with last year, recurring revenues as a percentage of total revenues slightly decreased from 88%.

Geographically, Canadian revenues increased 5.5% to $14.8 million or 48.5% of total revenues. United States revenues increased 69.6% to $5 million or 16.2% of total revenues, whereas revenues of other countries increased by 42.9% to $10.8 million or 35.3% of total revenues.

Music Broadcasting revenues increased 20.8% to $21.8 million, mainly due to acquisition of Classica in fiscal 2017, as well as Yokee Music and C Music in May 2017. And organic growth in the United States market primarily related to SVOD.

Commercial Music revenues rose to 35.4% to $8.8 million, mainly due to the acquisition of SBA Music and Satellite Music Australia in July 2017, as well as organic growth in sales of equipment and installation related to digital signage. As a result, adjusted EBITDA increased 15% to $9.5 million from $8.2 million a year earlier.

The increase was primarily due to the acquisition realized in fiscal 2017 and fiscal 2018, partially offset by higher operating expenses related to international expansion. Adjusted EBITDA margin decreased to 30.9% from 33.5% a year ago, mainly due to the recent acquisition of Yokee Music, SBA and SMA in Australia.

Equipment and installation sales and the overall change in the product mix, which present lower margin. For the second quarter, the Corporation recorded a net loss of $3.4 million or $0.07 per diluted share, compared to a net income of $1.4 million or $0.03 per diluted share last year.

The decrease was mainly attributable to higher nonrecurring legal fees, higher amortization expense of intangible asset as well as negative change in fair value of investment and contingent consideration, mainly due to FX, partially offset by higher operating results and income tax recovery. Adjusted net income remained stable at $5.4 million or $0.10 per diluted share compared to a year ago, as higher finance expenses and income tax -- income net tax expenses were offset by higher adjusted EBITDA.

Cash flow from operating activities 2 -- at $2.7 million in the second quarter versus $3.6 million last year. The decrease was mainly due to the higher general and admin expenses, partially offset by lower income tax paid and higher operating results.

Adjusted free cash flow increased to $6.9 million from $5.4 million a year ago. The increase was mainly related to higher adjusted EBITDA and lower income tax paid, which was partially offset by higher foreign exchange loss and capital expenditure.

Looking at our financial position, we conclude the second quarter with cash and cash equivalent of $2.2 million. Our net debt provision was $65.2 million, resulting in net debt to last 12 month adjusted EBITDA ratio of 1.79.

As of September 30, 2017, the corporation had a $100 million revolving credit facility, of which approximately $32.6 million was unused. Also on October 24, 2017, the Corporation announced that it has successfully completed a bought deal offering of aggregate of 4,348,000 subordinate voting share and variable subordinate voting share of Stingray at a price of $9.20 per share for a gross proceed of $40 million and a net proceed of $38.4 million.

On November 17 (sic) [ 7 ], 2017, underwriters exercised part of their over-allotment option and bought an additional 552,000 (sic) [ 552,200 ] subordinate voting shares at a price of $9.20 for gross proceed of $5.1 million and a net proceed of $4.9 million. Those funds were -- allow us to pursue our strategic acquisition program and investment to achieve our growth objectives.

I'll now turn to call back to Eric.

Okay. Thank you Jean-Pierre.

So this sums up our conference call for today. Thank you for your time and your attention.

At this point, Jean-Pierre and I will be pleased to answer any questions you have. So I'll let the operator take care of that.

Eric, I like the table on SVOD. Maybe you can talk a little bit how it ramped from the 100,000 back in August, up to the 156,000?

Is this some incremental geographic expansion? We saw a little bit of that from Amazon maybe a month ago?

But is this more ultimately Comcast and Karaoke?

Yes. So -- the reason we gave this graphic is because there is -- SVOD is growing so rapidly in different formats, we wanted to make sure the market was able to follow us.

As you can imagine, the SVOD services with Comcast and Amazon started in March, so that's why we did have subscribers on April 1. And the 50,000 subs you see on the B2C side, is mostly the acquisition of Yokee that we did on April 1.

So Yokee did not exist in March -- March of this year. So I think, we see that on the B2B side, it went from 30,000 to 96,000 and to 156,000 at the end of this quarter.

And the B2C is growing from 50,000 to 62,000. On the B2C side, ARPU is much higher because we're selling it direct.

So the ARPU on B2C -- sorry, is anywhere between $10 to $18 a month. So it's a very important ARPU for us, so it helps our margin.

And last point regarding the -- so for sure, Amazon is going well, Comcast is doing well. We're doing well also with our new products, Classica, we'll launching also Concerts and Jazz.

And I think there is a big momentum in the market for cablecos and telcos and over-the-top providers to launch SVOD services. And I think in the next quarter, I think we're going to have 2 or 3, 4 new providers of the same SVOD services.

So -- and the growth is, right now, very strong. The only question, again, we're just starting, we don't know churn rate.

So we can't qualify if we're going to be keeping on adding 60,000 subs per quarter.

Understood. So let me look to the revenue numbers for a moment, obviously a good solid numbers, particularly, out of the U.S.

and rest of the world. When I look at Canada, specifically Music Broadcasting, I think it was down year-over-year, usually that's maybe more of a flat context that you guide to.

Can you speak to any sort of one-timers a year ago? Or maybe some issues over the past year?

Yes. So for us in Canada, we have 2 types of revenues.

We have revenues coming from residential, which we get a cost per subscriber, and we get commercial revenues from the cablecos and the telcos, so pretty much -- we're pretty much flat in line in that field. So the residential is not moving, we had a small decrease on the commercial from our cable and satellite providers.

So we get paid a lot more for a commercial account that we get paid for residential account.

Got it. Okay.

And then maybe just lastly on margin. We saw good strength on EBITDA margin, maybe a bit lighter than expected, I suspect some of that might be commercial sort of equipment sales?

Anything else worth noting?

Yes, exactly, so 3 point. We had a lot of equipment sales in this quarter.

Now, we did the Saputo Stadium, so it's great to do a stadium, but and unless, we get the expos next year we'll need more stadiums. And the margin on equipment is 30%.

Also, we signed Sony on a preferred basis, so that's an investment of around $1.5 million to $2 million a year. So we've also signed Sony in this quarter, so we're very excited, very well positioned for us against Music Choice in the U.S.

And the third factor again, the SVOD are increasing but we get paid on the average, so it's going to take 1 quarter or 2 quarters more to really reflect the revenues from our deals because the numbers we give you are the end of the month numbers or the end of the quarter, but we get paid on the average. So I don't know, since we're growing so fast, our revenues are lower than numbers of subscribers we have.

I don't know if you can follow me or...

Yes, I can follow you.

I think the margin -- our margin again, we expect it to be between 32 and 34 and the margin should come back in the next few quarters.

Eric, JP, I wanted to ask you, maybe you can give us a breakdown of the $5.5 million on nonrecurring costs. How much went to legal and how much went to restructure -- acquisition?

So for sure -- for surety, IPR hearings, which is the interparty review by the Copyright Board, we have to give the Copyright Board 5 patent reviews, so we have to front up all the cost to convince them to review the patents, which they did and we won 5 out of 5. So all those proceeding cost us almost $4.5 million.

And then we have about $0.5 million or $600,000 of legal fees related to our deals of SMA and SBA and the other ones. Like the good and bad news.

The good news is we won 5 out of 5 and the court right now is adjourned, so there'll be no more cost. And now it's for Music Choice to go defend themselves in front of the Patent Review Board and for them to defend each patent, if Music Choice doesn't defend each patent then each patent will be dropped and the good news on our case, already in this proceedings, the proceedings the Music Choice have already dropped 2 patents out of 5.

So we've already officially won 2 out of 5 and -- but all of them remain to be invalidated.

Okay. Yes, that's helpful.

For your scorecard, I know you look at recurring monthly revenue and adjust your free cash flow. And on acquisitions, you're targeting 5 for 25, $5 million EBITDA for 25.

How do you budget or target or think about the nonrecurring costs related to acquisitions? In terms of what you want -- what kind of envelope do you want to keep it to?

Yes. So it's now.

Right now digital signage is booming and we have a lot of deals, we signed Farmacias, we signed Jean Coutu in Québec again. And we're trying to keep it at below 10% of our sales but that market of digital signage is a big, big growth.

So we're just -- we want to remain careful not to grow the business too quickly, to make sure we're doing everything right. So this quarter was very big, but again, now it's -- I think digital signage, it would easily have growth of 20%, 30% organic, if we want to get every contract.

So we just want to make sure we maintain our margins. So it's a good business.

Okay. So I just wanted to clarify, on the nonrecurring costs related to acquisitions, so the acquisition integration costs, you want to keep that at 10% of sales?

No. The cost of -- it was no, no, if you see this quarter, we do most of the work internally.

So with legal -- so our cost this quarter was $645,000 that we spent on acquisition cost. And the legal -- on the legal side, it was -- so it's not a big number.

Yes, okay, that's helpful. And then maybe I can ask you something a little bigger picture.

What are your thoughts -- go ahead.

No, no. In this quarter, no we're -- they're some big deals we're looking at that we're spending money on.

So those sometimes, you don't close them, so this quarter we had a few that we didn't close but we're looking at.

Okay. So if you're spending $25 million a year to acquire, you're going to keep your nonrecurring cost related to the acquisitions in the $2 million range?

It that fair to say?

$2 million and below. I would say -- if I would say...

Smaller or big deals, depending.

No, I would say, estimate 5% of our -- I would say, on -- if things -- if we close the deals 5% of the value of the deal, so on $25 million, $1.25 million.

Okay, that's helpful. And then maybe a bigger-picture question.

Going forward for the next couple of years, 2 years, you've got a lot of opportunity in mobile and SVOD. What are you thinking in terms of building brand awareness and budgeting for maybe an over-the-top marketing campaign to get the Stingray brand better known and in more services?

So, one of the reasons also for the lower margins, for the first time, we started marketing campaign with Amazon, Comcast, AT&T. And we didn't spend much but we spent in -- we're spending around USD 250,000 to USD 300,000 per quarter on marketing, our SVOD products, our brand and Amazon and also the mobile product.

So not huge spending but it's helping us to increase our SVOD numbers.

Okay. And should we expect that to grow commensurate with the SVOD services?

Or you think you [indiscernible]

Yes, in Q3 -- Q3 for us is our -- it's the best time of the year for these services so we're going to be investing in Q3, and in Q4 we'll see when the results come in. We'll do the return on investment but so far, our ROI is very high and we also had some brand awareness survey, and our brand awareness in Canada and [ Netherlands ] went up by 27%.

So people more and more get to see Stingray. Stingray in the hotels, Stingray music videos, Stingray Classica, Stingray SVOD, Stingray Karaoke.

So the brand is creeping up.

I missed the earlier part of the call, excuse me, but maybe can you have an -- a few views on what you're planning to do with the cash that you raised? Talk about the strategy, just bigger picture, where you see this investment leading into improved profitability, et cetera, and I have another question to follow.

Okay, the 3 -- the money raised is going to go for 3 buckets. The first bucket is to support our SVOD strategy.

We want to keep on buying content. So we want to buy concerts, we want to buy classical concerts and Jazz.

So you'll see us buying catalogs. We want to be able to offer some exclusive product and also we want to make sure that we corner the market for us to become the Netflix of music in terms of video.

So that's one of our buckets. Second bucket is, we are looking to buy SVOD property, so we have a few competitors in the SVOD space.

Those deals will be done more on a percentage of sales than EBITDA because most SVOD services have a very weak EBITDA but for us we want to, again, get that market. And the third one this year is, we expect there will be -- our acquisitions for the year will be much higher than the $25 million.

So we have a lot of -- we have a strong pipeline, some very interesting deals, so I don't want to give you projections but we're -- management is very comfortable that we're going to strongly, strongly over invest and surpass our [ 5-25 ] goal.

All right. If I go through each one of them, when I look at the catalog, how are value -- like what type of valuation metrics these catalogs trade at?

And when you look at SVOD properties, if you take on, let say, as you said, they don't make a lot of money because of their cost structure but when you bring them in, you probably can save a lot on cost? How -- what kind of delta could you get from $1 of revenue on SVOD properties into your EBITDA line if you buy these entities?

Yes. So to buy in on the Karaoke side, we own 22,000 karaoke songs.

So we do what we call -- we're the master records. So we rerun -- we redo the song.

So karaoke song is an investment about $1000 per song. So that catalog is worth $22 million.

In our book it's amortized, we already amortized it, so we don't -- it's not even in our books. Then if you buy a concert, if you buy a classical event of 1.5 hours or an opera, you're looking anywhere from $2000 to $10,000 for an hour.

So that's the investment that you need to do to own the concerts. We did purchase a catalog from Australia, [indiscernible] so we bought 400 concerts in Q1, that one was less expensive.

But it's important if you have the SVOD strategy to have a lot of items. So for the discovery, the more you have items, the more you have assets in your SVOD offering, the more people can discover.

So let's say, I like Rihanna, okay, great, I like her music video, okay, I like Rihanna karaoke, I like a certain type of classical event, great, we have [ Mazzon ] and all these different people on the Classica. So there is a big advantage there to do these products.

So I think the -- the first part on the...

On SVOD properties, how much lift can you get on the profitability of these entities when you bring them into your portfolio?

So for sure, we have -- SVOD properties have high EBITDA margins, so EBITDA margins north of 70%, so they're very, very strong when we bring them in. For sure, if we buy some of these corporations, we'll have the time to look at the cost structure but in a long term that's what we can expect.

Okay. And when you look at the -- I wanted to ask you, if you can provide some -- a qualitative assessment on the usage rate of these SVOD subscribers that you detailed in your press release.

I know you mentioned, it's too early to talk about churn rates but how was the usage? How much time these subscribers are using the service?

How interactive is the service compared to, let's say, your traditional Stingray Music on TV or on mobile?

So the usage -- again, we don't get all the information, on the B2B side, we get part of the information because now Comcast, AT&T, Amazon, they do the billing, so we don't get full, full information. The usage is very strong.

The subscription increase every week. We get weekly numbers.

So the numbers keep on increasing every week. On the Karaoke side, we know by nature, by -- on the B2C side that our biggest nights are Thursday, Friday and our biggest day of the week is the weekend.

So kids parties on Saturdays. So people sing karaoke -- so 40% of the karaoke songs are kids songs.

So Karaoke is very much of a family affair that you do with a group of people. So on the -- and the -- so well try to get more information.

We -- the churn rate that our partners tell us is around 15%, and they say that's good. But again, we don't see the churn rate, we only see the net number.

Do you follow what I'm saying?

Yes. yes, for sure.

Okay. So when you look at -- you mentioned you don't expect to continuously add 50,000, 60,000 subs but are you launching in other geographies?

Other platforms, SVOD services apart from the ones you've already launched on -- like can you talk a little bit about the other services that you can launch soon?

Yes. So quickly.

So for us, number one focus is U.S. market.

Like you may know I mention in numbers, the SVOD market is exploding worldwide and the U.S. is the number one.

With Amazon, as you know, we've launched U.S., we've launched U.K., we've launched Germany and Austria. Amazon has an aggressive growth plan for their SVOD services.

So they are in 4 countries, but no, I think they have plans to grow in more than 40 countries. So you can follow wherever Amazon launches, we'll be launching with them.

And for sure, we're working with all the telcos and cablecos around the world that are following a bit what they're doing on the Comcast platform. And Comcast is X1, so you can imagine that if -- since we've having this success with Comcast, that Cox, Rogers, Shaw and Videotron will follow on the SVOD strategy.

That's great. Final question on organic growth.

8%, quite nice here. How do you expect this growth to behave in the next couple of quarters?

And can you, JP, maybe can you talk a little bit more precisely on the line item, general administrative? It's hard for us to have visibility on that line, it's fluctuating at a lot.

So can you maybe just put some brackets on where you expect this line to be in the next couple of quarters?

Okay, so I'll do the organic growth and JP will do the line. So organic growth, this quarter it was even higher, it was at 9%, because we had a negative FX of 1%.

So if you do the growth of SVOD subscribers and you add $5 of ARPU for SVOD subscriber, you can more or less see where the organic growth will be over the next few quarters. So if we're able to maintain and not to have too much churn, the organic growth will be very strong because the growth that we're having here -- now 220,000 subscribers at $5 is $1.1 million a month, so times 12, if you're looking almost $13 million.

Last year, we did [ 110 ] , whatever the rate. So you can expect strong organic growth just on that product side.

And for the cost side, I think it's -- JP, it's all your coffee you've been drinking that's expensive?

Yes, of course. It's all the legal fees, the acquisition cost that we did this quarter regarding the 4 acquisitions we did.

And when I consolidate all these companies into Stingray Group, of course the G&A impacted. And we -- [ our valuable ] the team, I think the team is complete.

But of course legal fees are the main reason.

And just on the legal fees side. When we say nonrecurring, as -- since the case right now is on hold, so there is no legal fees right now.

So we've -- right at this moment, there's no legal fees, so that's the good news. So I just...

So if I strip out $4 million from the G&A line that should be like, let's say, a more normalized run rate for the next couple of quarters?

I would say, yes.

And regarding -- quick, on the legal side. With this attack, it was important for us -- Stingray to show that we will defend ourselves, it was a reputational attack at Stingray.

The U.S. markets sometimes are bit bullies.

So I think it's important that we show other companies that if you want to take an approach against Stingray, that Stingray will defend themself.

Just revisiting the Music Choice case. Can you give us a expectation of a time line, when you think about -- to resolution?

And to the fees that you incurred this quarter, the $4.5 million related directly to the patent issue. Do you expect -- if you win the case, can you recover those fees or is that a...

No, Tim. So that -- so this -- the patent loss is a lose-lose.

So if we win, we don't win anything. We just -- you can never get those fees back so -- look, we were very aggressive because 2 out of the 5 patents expire in December of this year.

But we still spend -- and each patent reviewed is about $0.5 million to $1 million, but we still spend that money because we wanted to make sure that even if they expire in December, we wanted to show that they can't come against us in the lawsuit. So -- but in this case, the best case scenario is -- and right now, the next date is November 21 where -- because the judge stopped the trial almost like an injunction, so we have an injunction until the trial November 21.

We're very confident since we won 5 out of 5 that the trial will be suspended until the review board, the review board will take -- again, Music Choice has to decide if they're going to defend themselves against each patent. They will have to invest the same amount of money that we did to defend their patent case.

And they don't defend that then every patent falls, and then once the IPR review is done by the Patent Board, then we'll know in the next 6 to 9 months where we stand on that. So -- but obviously good news for us as of now, everything is on hold and there's no -- we're not spending any money.

So realistically, this probably drags on for another -- to the end of calendar '18? Is that fair?

Yes. Like I said, the Music Choice has already dropped 2 patents, so there's only 3 left.

But we're still looking to invalidate all 5 of them. So I think we have another maybe 6 months to 9 months to wait for the Patent Review Board, unless something -- unless Music Choice decides not to defend the patents, so they would be dropped earlier.

Got you. Okay.

Just a couple of other things. You talked about commercial revenues from cable companies earlier, is that the cable company delivering the signal to a retail location?

Or is that another type of revenue?

Exactly. So if you're Bell Canada or Rogers, Videotron or Shaw.

So if you sell our service into a commercial location, because you have performance right, we'll get 30x to 40x more money on a commercial account than we get from a residential account So if you're a restaurant owner and you have a TV in your restaurant and you want Stingray music, then Bell Canada and Videotron and Rogers will charge the restaurant $30 a month, and we'll get a portion of that money.

And do you include that in the broadcast revenue or the commercial revenue bucket?

That one in the broadcast, because we get the check from Bell and Rogers.

I understand. I got you.

And then the -- sorry, is that line growing rapidly?

No. That line is -- we have a lot of debates because we're one of the few products out there that we have a commercial rate.

If you own -- if it's Discovery, CNN or Treehouse, the fact that you're in a restaurant or in a house is the same rate. The weather channel, they get $0.23 independent of where they are.

But because we're music and music is for personal consumption, we get a higher rate. So we're always constantly in audits with every operator to make sure that they have -- that they're paying us the right amount of money for commercial locations.

The only service like us that also gets a higher rate is the Sports channels. So if you're a bar and you have a Sports channel, you also will pay a higher rate.

So -- but it's always -- it's growing but there is always audits.

I understand. Last question.

On the business to consumer lines, you talked about a much higher ARPU there but is there not a higher cost because now you've got to provision and deal -- deal with collections and things like that? Or how does that play out?

So the B2C. So 98% of the B2C subs are paid to us by -- so these are apps, you subscribe to an app on Apple and Google and Amazon.

So the margin are still very high. We know we'll pay the commissions to Apple and Amazon.

We reported our net -- but the ARPU there is above $10, so it's a very good business for us. And in that one, we've done some tests on the Karaoke side.

We done some A/B testing. And we're doing testing between $12 a month to $18 a month, and right now, it shows that we can really increase our pricing and there seems to be no effect on the demand.

So the B2C gives us a chance to really be able to test our pricing strategy and we're looking maybe to increase our pricing of the B2B side from $8 to $10 for our services, because if you want to do karaoke, and if you like Classica, if it's $8 a month or $10 a month, doesn't make a big difference.

I first wanted to ask about the nonrecurring in the quarter. Is that all Saputo Stadium?

And is that all done now?

So this year, we have a very high, like digital signage, have high growth. And we're going to have strong year.

And we have a strong pipeline. And to be honest, we're limiting it to now to be below 10% of our sales.

Because there's a lot of demand right now for that part of the business, and we want to be able that we grow the team. The beauty about recurring revenue, you do recurring revenue, it's there every month.

For these installments, you need to make sure that they're well done, well delivered. So I think -- there's more requests for that kind of work before Christmas, not like November, October.

So we're going to see that, but again, the growth on the SVOD side is so strong that it's giving us a bit of flexibility.

Thanks, Eric. But just to clarify.

Was that Saputo? And is that all done?

Can we expect nonrecurring revenue coming down a little bit?

Again, Saputo is done. But now we just find Jean Coutu, and I think Jean Coutu is a between $3 million to $4 million contract.

And now we just signed Farmacias. Farmacias is going to be over time but it's a $10 million to $12 million contract over the next 2 years, so we have a lot of projects in the pipeline.

It's not going down.

You follow what I'm saying?

Yes. And just to clarify that, it is included in your organic number, right?

Yes. So that's why you saw the Stingray Business side, I think grew by 35%.

So Stingray Business had a -- so Stingray Business grew by 35%, it includes SMA, SBA, so compared to 26%, so we had a big growth in revenues there. And roughly -- JP, what's the impact on the organic growth, over the business side?

Yes, so nonrecurring was 3%.

Seems closer 5% or 6%, but...

Well, we can not -- we can share with you guys the waterfall but...

It was 3.8%.

Yes, 3.8%.

Okay. And then just based on your comments, it sounds like that lift is going to continue for the foreseeable future at least?

Yes. We have a strong pipeline, and again, we're only keeping the big contracts with higher margins.

So we're -- there's so much demand that we're just -- we want to make sure that we do the good contracts, higher margins, and like again, with every contract, there is always a recurring part as we do the content. So we try to make sure that we have a strong content recurring and the recurring is 100% margin, there's no rights to pay on videos on TVs.

So for the Jean Coutu, when you go in the Jean Coutu store, you're going to see outside, instead of having the plastic billboard that they change every week. They're going to have a big TV screen and will be updating this week buy toilet papers, I don't know Advils at half the price.

So you're going to see that all across Canada.

Okay. Thank you, and I think you know again, strong quarter, management is happy and excited to see the numbers over October, November, December, which for us, is a very good time of the year for all our B2C and SVOD products.

And balance sheet as well.

And a very strong balance sheet, very well positioned for acquisitions. So thank you for your time, everybody.

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