Thank you very much. Good morning, everyone, [ Bomatin ], and thank you for joining us for Stingray's conference call for the fourth quarter ended March 31, 2023.

Today, Eric Boyko, President, CEO and Co-Founder; as well as Jean-Pierre Trahan, our CFO, will be presenting Stingray's financial and operating highlights. Our press release reporting Stingray's fourth quarter and annual results for fiscal 2023 was issued yesterday after the market closed.

Our press release, MD&A and financial statements for the reporting period are available on our investor website at stingray.com and also 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 6, 2023, 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 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.

Financially -- finally, let me remind you that all amounts on this call are expressed in Canadian dollars, otherwise -- unless otherwise indicated. With that, let me turn the call over to Eric.

Thank you, Mathieu. Good morning, everyone, and welcome to our fourth quarter and full year conference call for fiscal 2023, we have proven to be a transformational year with the InStore Audio Network, ISAN acquisition becoming a cornerstone of our Broadcasting and Commercial Music segment and the streamlining of operations, sharpening our focus on key high-growth drivers, including free ad-supported TV channels, in-car entertainment, B2B-driven subscription video-on-demand, SVOD and retail audio ad network with Stingray Advertising.

Our team has yet again shown its agility and focus on financial discipline by generating approximately $12 million in annual cost savings by narrowing our focus on the previously outlined important growth initiatives. This strategic shift continue to increase the revenues 14.6% to $323.9 million in '23, while adjusted EBITDA improved 15% to $114.1 million.

Equally important, these actions have positioned Stingray for sustainable, long-term profitable growth. Broadcasting and Commercial Music revenues grew by 22% to $195 million in 2023, primarily driven by the ISAN acquisition, increased equipment and installation sales related to digital signage, in-car revenues increasing and positive FX impact.

These factors were offset by a planned decrease in B2C and music video on-demand revenues. We intend to expand our market presence within Retail Media in 2024, both in the U.S.

and Canada. In the U.S., the retail market is larger and more mature than InStore Digital Audio advertising have been around there for 20 years.

Given our leadership's position south of the border, our strategy mainly involves leveraging our existing relationship and increasing market penetration with current and new customers. In Canada, we're progressing well, securing renewals and new customers.

We expect to be able to secure a true coast-to-coast footprint with additional brands and locations which will support nationwide advertising campaign in the coming months. On the FAST channel side, we recently strengthened our product offering with the acquisition of the Ultimate Trivia Network, a move paving the way to the world's only fast channel dedicated to Trivia.

We also contracted third parties to resell unsold inventory by major television manufacturers, enabling us to better monetize our content for connected TVs. We are equally optimistic about growth opportunities for our in-car entertainment segment.

Sales for this business typically increased in 2023 to our organic growth at Tesla and VinFast, a new entry car manufacturer. We recently signed agreements with 2 leading technology companies in the automotive sector to bring our popular Stingray Karaoke product to select Audi models in the upcoming year.

This represents a key milestone for Stingray as we strive to become the de facto entertainment option to the connected car industry. Finally, in the B2B-driven SVOD space, we continue to expand in new regions such as New Zealand, Poland and the Northern countries.

Subscription were slightly up on a sequential basis at 815,000 subs in the fourth quarter, which is based always on -- after the holidays. Moving on to Radio.

Revenues progressed 4.2% year-over-year to $128.7 million, largely due to growth in local airtime and digital revenues. The automobile industry, which has historically been an important source of revenue for our Radio business has slightly rebounded from supply chain issues with inventories, increasing in the car dealership across Canada.

As a result, we're confident our Radio business will continue to provide steady growth in 2024 and beyond despite an unpredictable economic landscape. Well, looking ahead for 2024, we intend to accelerate our sell-through with existing customers and secure new accounts to grow our Broadcasting and Commercial Music business, which right now is on a run rate of EBITDA of $20 million a quarter.

We will continue generating healthy cash flow from our Radio segment to fund our growth strategy. We will also maintain our financial discipline to keep our consolidated adjusted EBITDA above 35%.

Finally, we'll reduce our debt level to create added flexibility in order to target acquisition and opportunistic basic. To sum up, the future looks promising for Stingray with ample room for expansion and strategic growth revenues have reached 50-50 parity with cash flow revenues from traditional cable and radio activities.

I will now turn our call to our CFO, Jean-Pierre, for our financial review.

Thank you, Eric. Good morning, everyone.

Revenues reached $78.9 million in the fourth quarter of 2023, up 8.7% for -- from Q4 2022. The growth was primarily due to the higher ISAN sales, higher equipment and installation sales related to digital signage, greater Radio revenues and a positive foreign exchange impact.

Revenues in Canada improved 7.9% to $43.6 million in the fourth quarter of 2023. The year-over-year increase can be attributed to growth in Radio revenues based on higher digital sales and higher equipment and installation sales related to digital signage.

Revenues in the U.S. grew 14.7% to $22 million in Q4 2023 on the strength of the ISAN acquisition and a positive foreign exchange impact.

Finally, revenues in the other countries increased 1.9% to $13.3 million in the fourth quarter, largely due to a positive foreign exchange impact. Looking at our performance by business segment, Broadcasting and Commercial Music revenues rose 9.8% to $50 million in the fourth quarter of 2023.

Again, the increase was primarily driven by higher equipment and installation sales related to digital signage and a positive FX impact. Radio revenues improved 6.7% year-over-year to $28.9 million in Q4, largely due to the growth in local airtime and higher digital revenues.

In terms of profitability, consolidated adjusted EBITDA in the fourth quarter increased 26.4% to $26.6 million on higher revenues combined with lower operational cost base especially in the Broadcasting and Commercial Music segment, following a cost-saving initiatives implemented in fiscal 2023. Consolidated adjusted EBITDA margin reached 33.7% in Q4 compared to 28.9% in 2022.

As mentioned last quarter, we made the difficult decision to streamline less profitable business lines and improve profitability, so we're well positioned for sustained profitable growth in 2024 and beyond. By business segment, Broadcasting and Commercial Music adjusted EBITDA increased 40.6% to $20.4 million in the fourth quarter of 2023, mainly due to an improved gross margin, supported by higher revenues and lower operating expenses.

Radio adjusted EBITDA meanwhile decreased 2.3% year-over-year to $7.7 million in the fourth quarter of 2023. The decline can mainly be attributed to the effect on a one-time allowance for doubtful account accrual reversal in Q4 last year.

In terms of corporate adjusted EBITDA, we represent head office operating expenses, less share-based compensation as well as performance and deferred share unit expenses and amounted to a loss of $1.5 million in Q4 2023. Stingray reported a net income of $4.4 million or $0.06 per diluted share in the fourth quarter of 2023, compared to $4.5 million or $0.06 per diluted share in Q4 2022.

The decrease was mainly related to higher interest expense as well as a lower gain in the fair value of the derivative financial instruments and on the fair value of contingent consideration. These factors were partially offset by higher operating results.

Adjusted net income totaled $14.7 million or $0.21 per diluted share in Q4 2023, compared to $11.8 million or $0.17 per diluted share in the same period of 2022. Turning to liquidity and capital resources.

Cash flow generated from operating activities amounted to $27.6 million in Q4, compared to $22.1 million in 2022. The increase can be attributed to improved operating results, adjusted free cash flow totaled $14.9 million in Q4, compared to $11.8 million for the same period last year.

The increase was mainly related to improved operating results, partially offset by higher interest paid. From a balance sheet standpoint, Stingray had cash and cash equivalents of $15.5 million at the end of the fourth quarter, subordinated debt of $25.5 million and credit facilities of $361 million, of which approximately $68.6 million was available.

Total net debt at the quarter end stood at $371.1 million or 3.19x pro forma adjusted EBITDA ratio. Finally, we repurchased 53,000 shares for a total consideration of $300,000 under our normal course of issuer bid program in the fourth quarter.

Full fiscal year, we repurchased 786,000 shares for $4.4 million. This ends my presentation for today.

I will now turn the call back to Eric.

Okay. Thank you, JP, and thank you for the presentation.

On behalf of the entire Stingray team, thank you for joining us on this conference call. We look forward to speaking with you again following the release of our first quarter results for fiscal 2024.

Okay. Questions, please.

Sorry about that.

I just want to talk a little bit about the Advertising revenue in the Commercial and Broadcasting segment. Was there a little bit of seasonality there?

I mean, Q4 kind of came down quarter-over-quarter. And then maybe just talk about what you're seeing for 2024 and what is the growth you're expecting [indiscernible] of the business?

Yes. Just like Radio, the same for sure, October, November are big months for Radio and also for Advertising for Stingray Commercial and Broadcasting.

For this year, a good question, we expect still good growth. We expect between -- anywhere between $50 million to $60 million or a 40% increase in our Advertising in the Stingray Broadcasting and Commercial.

Okay. That's great.

And then maybe in terms of capital allocation priorities, debt reduction feels like it's a priority right now, M&A as well. But maybe -- is there an opportunity to raise the dividend or buy back more shares in '24?

Yes. No.

Our first priority is to bring back the level below 3x. We expect to be there by the end of the year.

We expect to be well below 3x by the end of the year. And again, our goal is to be closer to 2.5x.

So right now, that is our first priority. For sure, depending on the stock price, where we have an NCIB program that we can establish.

But we're committed to, again, to be below 3x for the end of the year. And that is our first priority with interest rate rising and also to give us more flexibility.

Don't forget, we just -- we did a $60 million acquisition last year, so -- which we paid. So right now, we want to refocus on paying that acquisition quickly on our debt.

Eric, looking at Broadcasting and Commercial Music. You had the benefit of FX, I guess, some ISAN growth, and you highlighted E&L for digital signage in the press release and on the call today.

Obviously, some parts of the business, like FAST and maybe even SVOD could have seen some revenue decline, if I'm just trying to figure things out in terms of the moving pieces. Could you talk about some of the moving elements in the Broadcasting and Commercial Music segment, and maybe touch on some of their expectations going into next year?

Yes. Base will -- the JP will get back to you about base.

Our FAST channels and our SVOD are still growing in Q4. So -- but let me revise that.

We had a strong E&L for sure, equipment and labor of $5 million in this quarter. But no, we -- I think all -- the big factor for us, as you know, we're putting a lot less focus and investment in B2C.

Used acquisition costs, after COVID, went very high, and we saw it with all our peers. So that's the major impact.

But the rest of the broadcast business, all units are increasing.

Okay. And when you talk about margin staying above 35%, obviously, 35% or at least 35% was the objective, which you reached in F '23.

Do we expect any potential margin expansion above the 35.2% level of fiscal '23? And if so, maybe you can talk a little bit about the puts and takes.

So absolutely, the Broadcasting business and Commercial Music is roughly above 40%. So as we do more and more sales and broadcast, and less and less sales in Radio with lower margin, then that margin will go up.

So -- and the Broadcasting margins, I think it's well explained, we'll only continue to improve with scale. So the more we do sales, the more gross margin increases and the more our EBITDA margin increases.

So I think we should expect it to go up again, depending on Radio. Radio, again, fluctuates a lot like you saw in Q4.

Okay. And just lastly, are you seeing any recessionary concerns yet heading into your Q1 of the new fiscal year or anything in regards to conversations with clients?

No, no. So far, I must say Q1 has been on the Radio side, very stable.

So nothing that we've seen in the Radio business, which a lot of people ask me because they see if there's -- and we've even seen in the last 3, 4 weeks, surprisingly, pickup in national sales. What we're seeing is sales are coming in more last minute, mostly national sales, than before.

So we're happy with that. With the retail media, that business is -- a lot of new customers expanding.

We have some large customers depending on [indiscernible] that we get an annual budget, but they decide which quarter. So very confident, like we mentioned before, with our friend Mathieu, to achieve a 40% growth in Advertising on the Stingray Broadcast and Commercial Music.

I want to follow up on that 40% number. I think last quarter, you were talking about 25% growth or 25% plus.

Has there been any material change that makes you more confident in [indiscernible] expected growth there?

Yes. It's just that last year for Retail Media in Canada, we were building a network.

We're very confident in the next even weeks that we'll be expanding with a few new retailers. And so that's why we're confident to really increase our sales in Canada by a big multiplier.

And the U.S. also, we've got great momentum.

We are the big sales group. We're hitting a lot of new customers.

And we're leveraging -- if our inventory in the U.S., if we were able to sell 60%, 70% at a good CPM rate, above $500 million. So our goal right now is just how can we sell that inventory that we already have.

So that's why we're positive on that segment growth. And the biggest issue -- good question.

The big issue with the Retail Media Advertising, it's about evangelizing the market. It's not about recession, it's not about budget, if people getting used to doing ads, instead of doing ads then on Radio or doing ads on Spotify, doing ads on [indiscernible].

So -- but I think we're getting there, and we're getting a lot of new customers. So I'm excited to see the next few quarters.

Yes, your answer there actually sort of touched on what my next question is going to be. When you're in the process of what you calling evangelizing the market, have you had -- have you sort of -- is the sales strategy evolving?

Have you changed anything? Are you seeing anything more effective or less effective?

Maybe just an update on how quality...

So the most important -- so we started [indiscernible], let's say, a year ago. So we're getting sales like this month that we met 9 months ago.

So we're building the network. And the best news is, and if you go more and more in stores, we have customers that once they come on board, they repeat every month.

So you can imagine the lottery, gaming commission of every province, a lot of fruit. So for us, that's the good news.

And the same in the U.S. In the U.S., our customers are 98% recurring.

So our goal is to get more new customers. Once the customer comes in, our retention rate is very high.

So just to convince them, evangelize them that it's a new network and that has never existed before in North America and even in the world, so.

Eric, can you add a little color? It seems like your outlook in B&C is that in the U.S., you want to take more wallet out of existing customers.

But in Canada, it's about expanding your customer base. Have I got that right?

And could you sort of sort out like why not more customers in the U.S.?

Yes. So just a big step because now we got retailers and then we have advertisers because we call them -- they're both customers, technically for us.

So in the U.S., we've got 16,000 locations. And if you put dots, we cover the whole country.

So we have a nationwide network and a lot of customers want to be able to just do an ad for the nationwide. So in the U.S., it's really about getting more advertisers.

So just to confirm that, so, for sure, we want more advertisers and we want a bigger diversity. So that's why we hired a new sales team that's focused more on the agencies and the [ Procter & Gambles ] and the [ Colgates ] of this world.

In Canada, the issue we have is, we're not yet national. For sure, we're with Walmart, with [indiscernible], we're with Metro.

But if you look at the grocery market, which is key, we're still a bit Quebec-based, and you could debate if Walmart is a grocery store or not. So we're -- hopefully, in the next few weeks, we'll be adding some new grocery chains and some new pharmacies across the country.

A lot of the advertisers want to be able to do national ads in Canada. So we're building our network on that side.

So does that answer the question, Tim?

So if we tie that back to your 40% growth in advertising is -- to reach that growth rate, we're going to need to see you signing up more Canadian grocers and drug retailers. Is that fair?

Yes. I think that will help a lot.

But even right now in the first, we're already 2 months in the year, I can already -- we've already -- last year, we did -- our sales in Canada were minimal at $1 million, $1.2 million. Already in the first 2 months, we've already doubled the sales for this year.

So again, it's even without new retailers, we still are -- we doubled in the first 2 months, our bookings for this year compared to last year. And the growth in Canada, that's a goal, it's not by 40%.

The growth for Canada is we're looking at 500%. So -- and more, we'll see.

But we're finally seeing momentum of sales every week and new customers and repeat and larger orders. Most of the orders last year, people were testing us.

They gave us a small order of $50,000, $25,000, $75,000, now we're finally getting orders in Canada of $300,000, $400,000, $500,000, which is showing confidence. So exciting to see the growth in Canada also, for sure, the U.S.

market is bigger. So -- but in Canada, as you know, we dominate the market with 60,000 locations that we have our boxes.

So it's a great niche for us.

Second one was just thinking about the SVOD expansion strategy. I mean, for a while, you've been saying that [ D2C ] is too expensive, but is the 1 million sub target still in line?

Or...

Yes. [indiscernible] question is absolutely yes.

The U.S. growth has slowed down a bit.

So our SVODs in the U.S. of our products has been stable.

But with the launch of Amazon, I think, this year, we're launching with them in 12 countries. We've also launched our SVOD services with the people from YouTube.

So that was the launch about 2 months ago. We've also launched with Verizon with a bundled service of SVOD.

So because of our growth of new territories, expanding new customers, we maintain that goal, and I think that it could be achievable over the next 4 to 6 quarters. So -- and also, we're launching new products.

So as you were also launching a meditation type product or in the style of Calm Radio. So that also has -- so we're able to add new products, add new territories while the U.S.

market, and I think the -- I think that all SVOD market worldwide is stable, but we're lucky with the new territories.

Okay. And then last one for me, just revisiting the capital allocation question.

Should we assume that other than very small tuck-unders, M&A is pretty much off the table right now than that the #1 priority, really, the only priority is debt reduction in this current environment?

Yes. But as you can imagine, the interest rate and inflation is hitting all companies in our sector.

A lot of, I guess, competitors, smaller or bigger, are in strategic process. So there might be some easy tuck-ins in the next -- but if not, absolutely, our goal is to be well below 3x by the end of the year.

So -- and target to be 2.5x. And JP, I think if you want to -- how do you feel about the CapEx and the rest?

Tim, CapEx for this year, it's going to be the same $8 million tax we expect to pay for this fiscal and the same for next year because, as you know, interest is deductible, and on the interest side, we paid $2.3 million in May. So if you do the math, it's going to be around $26 million to $27 million for next year.

And also, we did fully pay all of our -- and you will see next quarter, all of the earn-outs were paid this quarter. So there's no more earn-outs in our books.

Yes, we paid around $20 million in Q1 to finish all the earn-outs [indiscernible].

All of our deals. So that's good news that we're able to pay off our deals quickly and now we can focus on debt reduction.

Everything is paid.

What was that number on earn-outs that was paid in Q1?

$20 million to the earn-out [indiscernible] and mostly.

And there's no more -- none more remaining?

No. The small charter, but it's minimal.

Eric, on the connected car side of the business. Just remind us how you size up that market, and obviously, you're looking to do and have done some more partnerships?

What's your expectation to grow this business, say, over the next 2 to 3 years?

The Board asked the same question. Every deal, right now, we're -- run rate, we're doing about -- run rate is about at $8 million for this year for the car business.

But every deal that we do, it's in the tens of millions of dollars because they are long-term deals. And for sure -- and we presented the car business to the Board and one of the Board members says that as I can see you're talking to every car company in the world and we're in negotiation and we're on contract.

So I think for you, as analyst, it's going to be interesting to see that the deals that are going to be announced in the next few months, but all these deals are long term. Some car manufacturers are starting with Zido cars.

Some are starting with Tesla, which was already at almost 2 million cars. And I think what's going to happen is, the car will replace the cable with the painful WiFi at $15, $20 a month, $25 a month, they're going to offer a bundle of service.

And in that bundle, just like on TV, you're going to have Karaoke and you're going to have Music. And the Stingray is the only company in the world positioned with the car companies to offer them a global solution because we're in 143 countries.

We're the, by far, the only largest Karaoke catalog in the world with 100,000 songs in 48 languages. So the car people like that when you're Tesla, when you're Volkswagen, when you're Mercedes, when you're BYD, when you're Ford, when you're GM, you want to be able to have an international presence.

And also the advantage of Music is very complex. In the U.S., it's complex.

In Canada, it's very complicated, imagine controlling all the rights worldwide. But Stingray, we've become the best company in the world at managing music rights and car companies are working with us because they realize that it's complex.

And if you make a mistake, it's expensive. So we have our content and our rights licensing, we have a net advantage of being the only player right now bidding for that business.

And you're going to say, what about Spotify and the other players? They're B2C.

So when you're B2C, you don't think B2B. So we have the advantage of thinking B2B, thinking about white labels, thinking about how we can be partners and adapting our product and content.

And that's what makes us unique. So for sure, very -- I think in the next 3 quarters of this year, we'll have much more visibility.

But the car business, it's 200 million cars a year. So do a monthly rate on that, the numbers are huge.

So -- and everything is going to go EV. Everything is going to be connected.

Everything will have a screen. So now we have to say thank you to Elon Musk because he put that screen in Tesla and one day said he wanted Karaoke, now we've become a basic product.

Any more questions, Drew?

Yes. I always want to say thank you to the analysts to take your time.

I know you're very busy with many companies. So I appreciate your time, your questions and your reports.

Thank you for everybody on the call. I appreciate your presence.

And again, for the whole Stingray team, I think we're happy with a strong year. And I think we're well positioned for another strong year, next upcoming year.

So thank you for all the Stingray team and all of our investors.