Thank you very much, Bomatin. Good morning, everyone.

Thank you for joining us for Stingray's conference call for its first quarter results ended June 30, 2022. Today Eric Boyko, President and CEO, as well as Jean-Pierre Trahan, CFO, will be presenting Stingray's financial and operational highlights.

Our press release reporting Stingray's first quarter results for fiscal 2023 was issued yesterday after the market closed. Our press release, MD&A, financial statements for the quarter are available on our investor website at stingray.com and also on SEDAR.

I will now provide you with 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 7, 2022, 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 are advised not to place undue reliance on such forward-looking statements. Also, please be reminded that some of the financial measures discussed over the course of this conference call are non-IFRS.

Please refer to Stingray's MD&A for a complete definition and reconciliation of such measures to IFRS financial measures. Finally, let me remind you that all amounts from this call are expressed in Canadian dollars unless otherwise indicated.

With that, let me turn the call over to Eric.

Thank you, Mathieu. Good morning, everyone, and welcome to our first quarter conference call fiscal 2023 and also today is our AGM.

So happy if you could join our AGM at 11:00. Stingray's overall business continued to gain momentum in the first quarter of '23, with revenues increasing 21.6% to $78 million.

On the strength of InStore Audio Network acquisition, improved radio sales finally returned to a more normal commercial operations. As a result, we are happy to report another strong organic growth of 9.9% year-over-year for the Broadcast and Commercial division.

The acquisition of ISAN, now with Stingray advertising with more than 20,000 locations, is proving to be a game changer for Stingray with an organic growth of 58.5% year-over-year. We anticipate robust fashion for this business in the next 12 to 18 months, particularly in Canada where we are better positioned for retail media advertising budgets in calendar 2023.

On the property side, we generated adjusted EBITDA growth of 8% to $26.1 million in the first quarter of '23, which is remarkable considering that we received no government subsidies related to the COVID-19 pandemic compared to the $2.9 million in the same period last year. Turning to our business segments.

Broadcast and Commercial Music revenue increased 31% to $46.2 million in the first quarter, again on the ISAN deal, higher subscription and also increase in equipment and installation sales related to digital signage. Stingray is making a major push into FAST channels, with streaming hours soaring 80% year-over-year to 12 million hours in the first quarter.

Following the quarter end, we signed a distribution agreement with LG for a FAST channel, designed for smart TVs and WebOS operating system worldwide. The increase follows the initial distribution of Stingray Music audio channels and existing distribution of Stingray Naturescape and specialty channel.

Clearly, FAST channel represents a high-growth vehicle for the corporation as audience and viewing habits are rapidly evolving. On the SVOD front, our subscribers grew by 27% year-over-year to 730,000 at the end of Q1.

In recent quarters, we have focused our efforts on more profitable SVOD products and B2C to B2C rather than consumer apps. For example, we're leveraging our relationship with established partners like Amazon, who have large installed customer base across countries to move the needle.

In Q1 '23, we expanded our penetration within Amazon India and Australia. As a result, we are steadily progressing towards our goal of reaching 1 million subscribers within the next couple of years.

Moving into our Radio business. Revenues improved 9.5% to $32 million in the first quarter of '23, reflecting a better market environment than last year, but still below pre-pandemic levels.

This revenue increase was locally-driven as economic uncertainty and supply chain issues continue to affect national advertisers in key advertising categories like the automotive sector. We expect our Radio segment to gradually recover from the short-term disruptions and continue to generate healthy cash flow.

In closing, strategic growth, revenues start to grow -- revenues at above from 31% in fiscal 2020 to 44% during the last 12 months, which demonstrates we are on the track for our long-term growth strategy. Along with Stingray advertising, FAST channels and net worth growth, we are confident in our plan to secure in-car entertainment partners like the ones that we have with [indiscernible] and Tesla.

As we continue growing our high-margin digital business, we must remain prudent with our spending plans due to the uncertain macroeconomic environment. As a result, our capital allocation strategy will prioritize debt reduction without sacrificing key initiative fiscal growth.

In return, so we expect to increase our OpEx margin. I will now turn the call over to Jean-Pierre for a financial overview.

Thank you, Eric. Good morning, everyone.

Revenues reached $78.1 million in the first quarter of 2023, up 21.6% from $64.3 million in Q1 2022. The increase was mainly due to the acquisition of InStore Audio Network, both in Radio revenues based on the gradual easing of COVID-19 restrictions and return to normal commercial operation, higher subscription revenues as well as enhanced equipment and installation sales related to digital signage.

Revenues in Canada improved 12.9% year-over-year to $46.6 million in the first quarter of 2023. This growth mainly reflects an increase in Radio revenues due to the gradual easing of COVID-19 restrictions and returned to normal commercial operations, as well as an enhanced equipment and installation sales related to digital signage.

Revenues in the United States grew 94.6% to $19.1 million in Q1 2023. The year-over-year growth can be attributed to the acquisition of InStore Audio Network and higher subscription revenues.

Finally, revenues in other countries decreased 5.5% year-over-year to $12.4 million in the most recent quarter due to the less B2C apps and in-store commercial revenues. Looking at our performance in business segment.

Broadcasting and Commercial Music revenues rose 31.7% to $46.2 million in the first quarter of 2023. The increase was primarily due to the acquisition of InStore Audio Network, higher subscription revenues as well as enhanced equipment and installation sales related to digital signage.

Radio revenues improved 9.5% year-over-year to $32 million in Q1 2023. The increase can be attributed to the gradual easing of COVID-19 restrictions and return to normal commercial operations.

In terms of profitability, consolidated adjusted EBITDA improved 8% to $26.1 million in the first quarter of 2023 from $24.2 million in Q1 2022. As Eric point out earlier, we are quite pleased with this financial metric given that subsidies received from Canada Emergency Wage Subsidy Program were immaterial in Q1 2023 compared to $2.9 million in the same period last year.

The increase in adjusted EBITDA was mainly due to the acquisition of InStore Audio Network, partially offset by the CEWS program in Q1 2022. Of note, adjusted EBITDA was also up 24.1% sequentially in Q1 2023.

We expect continued margin improvement through cost controls and selective strategic investment priorities. By business segment, Broadcasting and Commercial Music adjusted EBITDA increased 14.4% to $16.8 million in the first quarter of 2023.

The increase was mainly due to InStore Audio Network acquisition, partially offset by higher operating costs. Radio adjusted EBITDA mainly declined 2% year-over-year to $10.6 million in the first quarter of 2023.

The slight decrease can be attributed to the CEWS program in Q1 2022, partially offset by higher revenues in the most recent quarter related to the gradual easing of COVID-19 restrictions and the return to normal commercial operations. In terms of corporate adjusted EBITDA, we represent head office operating expenses less share-based compensation as well as our performance and deferred share unit expenses, which remained respectively stable at a negative $1.3 million in Q1 2023.

Stingray reported net income of $9.4 million or $0.13 per diluted share in the first quarter of 2023 compared to $4.2 million or $0.06 per diluted share in Q1 2022. Adjusted net income totaled $13.2 million or $0.19 per diluted share in Q1 2023, up from $11.2 million or $0.16 per diluted share in the same period of 2022.

Turning to liquidity and capital resources. Cash flow generated from operating activities remained stable at $16.3 million in the first quarter of 2023 as higher income tax paid were largely offset by improved operating results.

Adjusted free cash flow amounted to $15.7 million in Q1 2023 compared to $15 million in the same period in 2022. The increase was mainly related to higher operating results and lower capital expenditures, partially offset by higher income tax rate.

From a balance sheet standpoint, Stingray had a cash and cash equivalent of $13.8 million at the end of the first quarter, supported net debt at $25.5 million and credit facilities of $358.4 million, of which approximately $76.6 million was available. Total net debt at the quarter stood at $370.1 million or 3.25x pro forma adjusted EBITDA.

We believe that cash flow generated from operating activities and borrowing available under credit facilities are sufficient to meet our liquidity needs for the foreseeable future. Finally, we repurchased 345,000 shares for a total of $2.2 million under our normal course of user bid program in the first quarter.

This ends my presentation for today. I will now turn the call back to Eric.

Thank you, Jean-Pierre. So this concludes our prepared remarks.

At this point, Jean-Pierre and I are happy to answer questions. And then again, sorry for my -- these allergies.

So I'm drinking a lot of tea, but hopefully my voice will be better. Operator?

Congrats on the good quarter. So my first question is in terms of Radio.

You took a little bit of a step back in terms of the recovery versus pre-COVID time. And I know you pointed out supply chain as a leading factor, but I just want to get your views as to what the recovery we should expect in 2023 is?

And whether we're at the pre-COVID revenue level by the end of the year?

Yes, it's a good question, and we have the same question with the Board. One of our big issues for also video is that the car business, which was 10% to 12% of our business.

And one of our shareholders and Board member has many car dealerships. They're still at 70% inventory.

So whatever they get, that's free sold. So it's coming back, but that's a key factor.

The good news is during that period, we have a lot of new advertisers. As you know, the example of Ontario legalizing the ads for sports betting.

So that's helping us. There's a lot of new economy we're seeing coming back.

And don't forget that we still cut cost of roughly $10 million to $12 million prepaid debt. So we're well positioned with our new cost structure to come back to the same profitability than 3 years ago with lower sales.

And then on the advertising side, I know you've discussed $16 million in advertising inventory. How should we contextualize that in terms of revenue opportunity?

Does that translate to revenue 1:1 or is that $16 million before the partners share with Metro and Walmart in touch?

Yes. So the inventory we have in Canada, but it's going to take time.

It's going to take time for us to sell it because we're just starting in Canada. But in Canada, the inventory rate now available is closer to $80 million.

In the U.S., the inventory that we have available rate now unsold is $80 million also. So we have a lot of unsold inventory, but it's going to take time to get the sale rate, to get the right CPM, the right partners.

And I can tell you that we have the whole -- the company focuses on selling the current inventory. So we're sitting with these muffins.

So we got to sell the muffins. But we're confident.

As you saw, we went from $1 million in sales last year to almost $8.6 million. All of it is coming from retail, Retail Media.

So our run rate right now is currently close to $38 million. And that should be increasing every quarter.

We just started selling for the first time in April, May, June. It was our first time really selling ads.

And we're just -- the momentum for Canada at least is we should be doubling every quarter for the next few quarters because that we're seeing the new ad buys. So very excited about that.

And also the big thing in Canada we're measured by COMMB. And we finally are the first company to be approved measured with Geopath in the U.S.

So that will be -- we'll be able to increase our CPM. Our CPMs in the U.S.

are 10x smaller than what we have in Canada because we're not measured. But that again, that will take a few quarters, but we're very confident.

So when you say double, do you mean double in the Canadian business, the $2.5 million you do in Canada right now?

Yes. Last quarter, Retail Media came with a 400,000.

This quarter, we should do 800,000. So I think you should set that type of growth in Canada over the next few quarters because we just started.

Eric, where are you in the process of growing the national sales team for Stingray advertising per your Page 9 of your slide deck?

Yes. So in Canada, we have a total -- I think we're 6 individuals.

In the U.S., we're 4. But right now, we're adding -- we just have a P.O.

system and a recruiter. We're hiring 5 people in New York in the States to sell agencies.

So hopefully, we'll have these people by September. So we're going aggressively with recruiters, which I must say in the U.S.

are very expensive. Maybe I should start a recruiting business in the U.S.

But we really want to be in place. Now that we're measured, we can sell to agencies like we do in Canada.

In Canada, our CPM is very high, we're gaining a great CPM, and I can give all the numbers. And in the U.S., there's a lot of improvements.

If we can double or triple our CPM in the U.S., double and triple yourselves with that. So I think we're in the right direction.

And we're excited to see what the next few quarters will be able to deliver to you guys.

When we look over at the digital signage business that you guys were exploring state side over the past, let's call it, 1.5 years, can you talk about how that effort is going? Or is that now being sort of more deemphasized with a greater focus on this Stingray advertising opportunity?

Absolutely. Right now, we're trying to set our focus in the U.S.

In Canada, we control. I don't -- the word control is maybe a big monopoly on all food, every grocery in Canada we have, every pharmacy we have, we have all the Walmarts.

We have [ BMI ]. We have RONA, SAQ, LCBO.

So we take all the stores that we can add that are prominent. We already do the music Giant Tiger, Best Buy.

So that's our focus. Now our goal in the U.S.

is to get those type of people, so we can do the music and the ads.

And just turning to the Radio business. Are you seeing any improvement post the Q1 in terms of trend or is it going the other way just because of some of the macro headlines?

Yes. So far, in terms of budget, we had 102% of our budget in Q1.

So we're very happy. Right now, again, we're pacing at 96% of Q2.

So again, Q1 and Q2 are looking very good. It's again -- and one of the reasons that we're looking at OpEx savings and we started the process, a pretty important OpEx saving plan that we explained to the Board yesterday is to really see what's going to happen in Q3 and Q4.

So for Radio, pay was more volatile. The good news is for Retail Media, there's 0 impact.

When announced who wants to make an ad to announce a type of shoe, they want to keep those ads. So we don't see an impact on Retail Media or Stingray advertising.

But again, we're being defensive for Q3 and Q4.

Eric, just to clarify, that 96% that you just mentioned, what's the context there? I missed that.

96%.

Radio.

Oh, budget, a Radio budget, so we had 96%. So far, our pacing is on our budget.

So we're very happy. So for -- and same thing for Q3 and Q4.

So we're pacing and that's the way we do it on the Radio side, we're pacing to be on budget. And this year, we had a good increase in our budget.

I don't want to give you a forecast, but we had good numbers, and we're following our plans.

I think last quarter, you were targeting double-digit organic growth in the broadcasting and recurring commercial music, all of that combined. Obviously, a lot of this will depend on the ad market as we go through the fiscal year.

But just wondering where you think you are benchmarked against that at the moment?

Yes. I think we can be confident that we'll stay double-digits.

The retail or advertising numbers, unless we got cancellations, are still very strong. So with the help of the retail advertising, which is all organic because when you have 0 last year, we're going to continue seeing an increase in organic sales.

So very confident to deliver the 10%.

And just on the Stingray advertising, in your presentation, you did talk about a total addressable market of about 300,000 locations. Obviously, you're at 20,000.

Any sense of just how kind of the road map looks in terms of that penetration over time?

Yes. And so for -- one thing we'll have to -- the qualifying market in Canada, like people that really like, for example, a corner store, we could sell ads, but you only stay a minute 20 in the corner store.

So we'd have to do an ad every 2 minutes. So it's not as much viable.

I would say that the market that we can attend here in Canada is about 20,000 locations. In the U.S., probably closer to 200,000.

But for now, our #1 focus is we already have all the stores in Canada connected. So every grocery, pharmacy, big store, pet store, all those type of customers, you can imagine that our clients are being met and we're in negotiation at somewhat contracts to convert them to the advertising model.

And in the U.S. right now, our big one is we're approaching all the big guys.

We're approaching all the Clovers, the Walgreen and all the other, so very aggressive plan to meet all the different companies to grow our network there to again to be able to sell our ads.

And then one last one from me. Just in terms of the full fiscal year in terms of -- you mentioned in your press release, you expect margins to continue to trend well through the year.

So presumably, that consolidated 33% to 35% margin range is still intact. That's kind of the first question.

And second, just maybe for you, JP, on the CapEx for the full year, just what you mean time to win?

And for the margin, I agree with you. I expect our margin to be at 35% with the cost savings.

There's also help there. So the only negative part is don't forget that in Retail Media, we do have a split with the retailers.

So that decreases our gross margin.

And on the CapEx side, I think it's going to be lower for the future to come because we're -- Radio, we did the main station last year. And on the other side here, I think we're -- the office is great, and all the staff, it's okay with -- to be with equipment license.

So we're going to be fine. So between 2 and 4 or less.

I think you'll see our CapEx also going down, more and more software, less equipment, less servers.

So we don't expect any surprise there.

And again, with the operational savings, it also helps slowing your CapEx.

I just wanted to ask a follow-up on the cost savings on the Radio side. Could you help us maybe contextualize a little bit that in terms of what the margins -- you expect the margins look like for the rest of the year maybe?

Yes. I think before the pandemic in 2020, Radio was running at 18.3 a quarter.

In this quarter, we finished at 15.7. So it's at 2.6 million.

So it's the 10 million a year in cost savings. That's going to be there to stay.

And that's the 10 million that we told you -- told the market 2 years ago that we feel would stay in Radio.

Again, I wanted to ask a follow-up question on Geopath. You touched on it slightly and said that that's an area where you can really see CPMs improve in the U.S.

Is that all it's going to take in terms of getting CPMs close to the Canadian side? Or is there more partnerships and more work you need to do in the U.S.

market to sort of enable that lift?

Yes, our CPM in the U.S. is running around the $2.

In Canada, we're able to get up to 20. So there's a big gap.

And the reason for that is, one is measured, and we can guarantee the agency that the audio ad was done. And it's also -- we did it at Tuesday at 4:00.

So that's the advantage we have is we can really deliver, and we can also deliver an ad in just 18 Walmarts or I just want the locations in Toronto. So we're able to really have a lot of flexibility.

And every time we do something that is more precise, we charge more. So that's the big advantage.

So our goal is to bring this to the U.S. to bring this level of expertise and to be really the dominant player in the audio ads and stores.

I'll ask one last one on the debt reduction. Is there a number that you're targeting for leverage, either as sort of either a leverage number or whether -- and then on the paying down side as a percentage of free cash flow?

Absolutely. So I think the last quarter and even now with the markets coming, our focus is on repaying the debt.

You know the NCIB unless the stock really moves and there's a big, big down. So our sole focus is going to be paying back the debt.

Our goal is to be -- will be below 3 by the end of this year, so by the end of March. And we'd like to be -- our goals to be by 2.5 this time this year.

And our goal before was 3. Now our goal is 2.5.

And another point, unless it's an amazing acquisition, we have so much inventory to sell currently. We have so much organic sales that our focus is really how do we -- like I was telling before, selling our muffins.

So on that is a real nice tuck-in and a very good price. We don't expect any big acquisition this year.

Eric, can we just go back to the path to optimizing Stingray advertising in the U.S.? You talk about how you're measured in Canada and you can provide geo-targeting and whatnot and upsell opportunities effectively.

So in the U.S. right now, can we just talk -- go back -- so are you measured?

And if you're not, how long will it take you to be measured?

Good point. So now that we have the -- so once we're measured, we need to install our boxes and our partner with Hivestack.

So what we're doing right now is re-changing all the boxes of the people that we -- of our current customers. And so we have to deliver both.

So I expect by September -- we've had the same question. By September, we'll be able to deliver the first measured ads in the U.S.

And so that is just a function of you switching out technology, all other requirements in terms of affiliations you have to do with the measurement agencies and whatnot. That's all locked and loaded, ready to go?

It's just a matter of the tech?

Yes. And also what's interesting is to -- with Geopath, the way it works is that they measure each store.

We do about 1,000 stores a month. So we started with that.

So it's going to take about -- for every store to be measured, they do 1,000, 2,000. So they got 8 months for all of our location to be rated.

I know why you say that work to be. So there is time to deploy.

But while we're deploying, there's a lot of stores to sell. So we don't need to wait at all.

But let's just go back. So by September, you're not going to be able to fully maximize this, going back to...

No, no, we're not going to be available on all 15,000 stores. But the onus is we don't have the sales team to sell agencies to all those stores right now.

So we have to execute that plan. But on the technology side, we're done.

It's more of the execution and getting the sales team.

But the cadence in terms of adding stores is we should think of about as roughly 1,000 a month?

1,000 to 2,000 a month that will be able to sell targeted ads.

Right. So it's really by this time next year that you'll have the same scale in the U.S.

as you do in Canada. Is that the right way to think about it?

Exactly. But in the U.S.

it's 15,000 stores. In Canada, it's 4,000.

Did I answer your question or --?

I still don't understand. I don't understand the cadence of the stores in the U.S.

relative to what -- it just seems that it's going to be -- it's going to take a while to get scale in the U.S. is what I'm trying to confirm.

But during this time, we still keep on selling ads at different CPM. So we're happy to go on the technology side and Tim, and to take time with you to explain a bit of the difference.

But all your questions are -- you're right on in terms of the right questions.

All right. Thank you, everybody, for joining the call.

Appreciate the analysts. Obviously, I know you guys work very hard.

I like your reports. It's great to have you guys as partners.

And we have an AGM at 11:00. It's going to be virtual.

So hopefully, next year, we can have a live AGM and invite all our friends. So thank you, everybody for your time again today.