Stingray Group Inc.

Good morning, ladies and gentlemen, and welcome to the Stingray Group, Inc. Q3 2024 Results Conference Call. At this time, note that all lines are in the listen-only mode. But following the presentation, we will conduct a question-and-answer session. And if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that the call is being recorded on Wednesday, February 7, 2024. And now we'd like to turn the conference over to Mathieu Pellocchi. Please go ahead.

Merci beaucoup. Good morning, everyone, and thank you for joining us for Stingrays Conference Call for its third quarter results for fiscal 2024, ended December 31, 2023. Today, Eric Boyko, President, CEO, and co-founder, as well as Jean-Pierre Therrien, CFO, will be presenting Stingrays operational and financial highlights. Our press release reporting Stingray's third quarter results for fiscal 2024 was issued yesterday after the market closed. Our press release, MD&A, and financial statement for the quarter are available on our investor website at stingray.com as well on CEDR. 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. 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 SETR. 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. Please be reminded that some of the financial measures discussed over the course of this conference call are non-IFRS. Please refer to Stingrays and DNA 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.

Good morning, everyone, and welcome to our third quarter conference call for fiscal 2024. Stingray delivered exceptional and historical third quarter results, surpassing $100 million in revenues marked for the first time in the company's existence, while generating adjusted EBITDA of $38.6 million and adjusted free cash flow of $32.7 million. This outstanding operating performance was driven by organic growth of 23.9% year-over-year in broadcast and recurring commercial music revenues, including a combined 84% increase in retail media and fast channel advertising revenues. We are trailblazers in the retail media advertising industry, providing large retailers with a technology platform that carries customizable ads across a digital network every few minutes to fully monetize the presence of in-store consumers. The response of the U.S. market has been remarkable, with overall stigma revenues growing 39.7% south of the border in the third quarter, and 21.4% after nine months into the fiscal year. Overall, Canada accounted for 51% of sales in the third quarter, followed by the U.S. at 37%, and other countries at 12%. Going forward, we believe there's plenty of room for revenue growth, particularly in the vast U.S. market. On the fast-channel side, we nearly doubled listing hours sequentially to 29 million hours through the integration of 18 new Stingray channels on Samsung TV Plus in the US. We estimate that our current run rate of hours is now at 40 million hours per quarter. The introduction of audio channel marks a major milestone in our pivot from traditional cable distribution to OTT platforms like connected TVs. We believe digital platforms will continue to simply grow for the years to come. Turning to Incar Entertainment, the initial deployment of Stingray Karaoke and 300,000 cars in BYD, the biggest EV car manufacturer in the world, is steadily progressing and we further expanded our partnership with the world's leading manufacturer of new energy vehicles through the launch of Calm Radio in models across dozens of countries. This latest agreement is highly significant because it diversifies our automobile product offering into a wellness space to enhance the driver's journey while highlighting our emerging relevance in global in-car entertainment landscape. As for the SVOD segment, subscription reached more than $810,000 in the third quarter on the strength of relationship with Amazon and Singing Machine Company, connecting more electronic devices worldwide. Equally important, our strategic decision to reduce investment in B2C while prioritizing B2B partners as improved the bottom line for Stainway's SVOD business for fiscal 2024. Altogether, revenues from broadcasting and commercial music business increased 21% to $65.6 million in the third quarter of 2024, while radio revenues are stable year-over-year at $34.6 million, as we continue capturing share in local markets through our direct sales force. Given sustained robust financial results, We are confident that Stingray will generate strong growth revenue in fiscal 2025 with a similar margin profile. From a balance sheet standpoint, I am pleased to report a net debt to pro forma adjusted EBITDA ratio improved to 2.99, so below 3 in the third quarter, as we accelerate the repayment of our credit facility. We are well ahead of our plan and expect to further decrease our debt in Q4. In summary, all key performance indicators are pointing in the right direction. I will now turn to CFO Jean-Pierre for the financial overview.

Merci, Eric. Good morning, everyone. Revenues reached $103 million in the third quarter of fiscal 2024, up 12.4% from $89.2 million in Q3-23. The increase was large due to growth in retail media advertising and fast-channel advertising revenues. Revenues in Canada improved 3.1% to $51 million in the third quarter of 2024 due to the strength of retail media advertising. Revenues in the United States grew 39.7% year-over-year to $37.1 million in 2024, again reflecting stronger retail media advertising and fast channel revenues. Revenues in other countries decreased 7.8% to $12.2 million in the most recent quarter, The year-over-year decline was caused by lower audio channel revenues as well as less in-store commercial revenues. These factors were partially offset by a positive foreign exchange impact. Broadcasting and commercial music revenues increased 21.2% to $65.6 million in the third quarter of 2024. The growth was primarily driven by higher retail media advertising and fast channel revenues. Radio revenues, meanwhile, decreased 1.3% to $34.6 million in Q3, as local and national agency airtime advertising dropped year over year, partially offset by an increase in local direct advertising revenues. In terms of profitability, Consolidated adjusted EBITDA improved 12.2% to $38.6 million in the third quarter, from $34.5 million in Q3. Last year, adjusted EBITDA margin reached 38.5% in Q3-24 compared to 38.6% in the same period in 23. The growth in adjusted EBITDA was mainly due to higher revenues. The decrease in EBITDA margin is due to decrease in adjusted EBITDA in the radio segment. Our business segment, broadcasting and commercial music, adjusted EBITDA increased 23.6% to 27.9 million in the third quarter of 24. The year-over-year increase can be attributed to an improved gross margin and higher revenues. Adjusted BDA for our ratio segment decreased 7.1% year-over-year to 12.3 million in the third quarter of 24. The decrease was primarily due to a slight revenue decline combined with higher deregulatory fees. In terms of corporate adjusted EBITDA, it amounted to a negative $1.6 million in the quarter, higher compensation compared to the current funding periods. Stingray reported net income of $9.1 million, or $0.13 per diluted share, in the third quarter of 2024, compared to $12.9 million, or $0.19 per diluted share, in Q3 2023. The decrease was mainly driven by an unrealized loss on derivative financial instruments and a loss on deferred share unit expenses related to a share price increase. These factors were partially offset by higher operating results and lower income taxes. Adjusted net income reached 18.5 million, or 27 cents per diluted share, in Q3-24, compared to 16.5 million, 24 cents per dollar to share in the same period of 23. The increase can mainly be attributed to higher operating results, partially offset by a greater loss of foreign exchange compared to the third quarter of 23. Turning to liquidity and capital resources, cash flow generated from operating activities totaled 30.9 million, in Q3-24 compared to $24.6 million in Q3-23. The year-over-year improvement was mainly due to the non-recurring recovery of income tax from radio and higher operating results partially offset by a greater negative net change on non-cash operating items. Adjusted free cash flow amounted to $32.7 million in Q3-24 compared to $18.1 million in the same period in Q3-23. The increase was mainly related to the non-recurring recovery of income taxes from the radio segment and the better operating results. From a balance sheet standpoint, Stingray had cash-in-cash equivalent of $7 million at the end of the third quarter, subordinate debt of $25.6 million, and accredited facilities of $362.9 million, on which approximately $61 million was available. Total net debt at the quarter end stood at $381.5 million, down $9 million from the last quarter, as we intensified payment on our credit facilities. Combined with increased adjusted BDA over the last 12 months, our net debt pro forma adjusted BDA ratio dropped to 2.99 times at the end of the third quarter. As Eric mentioned earlier, we intend to bring it down further in the oncoming quarters, It represents a key priority for the management team and this higher interest rate environment. Finally, we repurchased 372 shares in the third quarter of 24, 1.9 million compared to 341,000 shares for 1.4 million in the third quarter of 23. This ends my presentation, and I will now turn the call back to Eric.

Okay. Thank you, JP. Thank you for the summary. And happy to take the calls from our friends, the analysts. So passing it over to you guys.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touch-tone phone. You will then hear a three-tone prompt acknowledging your request. And if you would like to withdraw from the question queue, simply press star followed by two. And if you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and press star 1 now if you have any questions. And your first question will be from Adam Schein at National Bank Financial. Please go ahead.

Thanks a lot. Good morning. Eric, can you talk about some of the categories in advertising that might be helping to drive some of that jump in retail media or any other factors driving the increased momentum and then also maybe talk about some of the early trend in your Q4 related to retail media? Thanks.

Yeah, good question. So, you know, our retail, our advertising sales are growing by retail media and also by the fast channels or connected TVs. So for sure, we're expanding our footprint and the footprint helps us have more inventory. We're increasing our fill rate. And for us, the biggest categories for sure is the pharma market. anything related to vaccines. We're very strong in the pharmacies in the U.S. and in Canada. So we see that trend going forward. But most impressive is our success with the connected TVs. Our run rate is now at 40 million hours that we expect per quarter. Roughly, we sell about 30 cents of advertising per hour and 15 cents Canadian net. So you've got a run rate there. We report net revenues of 6 million. So Last year we did 4 million, this year we're doing 12, and next year our run rate is anywhere close to 24 million. So we're very excited about the connected TVs also.

Okay, and the expanded bank mandate that you announced back, I think, in the fall, was not in Q3. Can you talk about how it might be ramping in Q4 and into your fiscal 25?

Yeah, so good point. We're really focusing on music and digital signage and banks. It's a big vector for us. We're strong in Mexico. We're strong in Latin America. And now we're focusing in North America. So I agree that contract that we have with our friends at BMO is starting in January. So we'll see the numbers picking up and it's a five-year deal, so very happy to be involved in all the branches across North America. That's over 2,000 branches, so happy to have new partners and also working hard with national banks.

Okay, thanks for that. Last question. It was noted that the regulatory fees were moving up in radio, hence the margin contraction. Is there any potential offsets that you might explore to try and mitigate some of that impact?

Yeah, we got it. As it is in music, you get with the new NAFTA agreement that was negotiated between Canada and the U.S., our fees for resale increased by $1.2 million. So it is what it is. We can't really go against the agreement between NAFTA and Canada. But the good news is every unit is doing well, and even radio right now. Like I said before, we're very strong in local sales. I think some of our Bigger players that are more involved in TV have less focus on radio. So it's giving us an edge to gain market share in every local region. And even this quarter, we're seeing positive organic sales from radio. And we're getting closer and closer to 2020, which was pre-COVID. So interesting to see how we're winning on the local side on radio. But there's no way to offset 1.2 million of rights fees there. No, that's it. Sometimes you win, sometimes you lose, but in this case, it was decided.

Okay, I'll leave it there and I'll queue up. Thanks for that. Thanks, Adam.

Next question will be from Arvinda Galapagli at Canaccord Genuity. Please go ahead.

Good morning. Thanks for taking my question and congrats on the results. In terms of the strength in retail media, just going back to that, can you just break it down in terms of agency and direct? I know that you're getting some traction on that front as well. Specifically in the U.S., maybe just talk to some of the trends that you're seeing as the macro backdrop seems to improve there.

Our biggest issue for us is we have a lot of inventory that we have available, so our fill rate is still for us to improve. It's really a mix between direct and agencies. I must say it's a work in progress. But again, we need to evangelize the market. People are used to TV, connected TVs, radio, but they're not used to in-store media. So it's something that will have to work for a period of time. But for sure, when you start from a small number, your gains are very strong. We expect the numbers to, again, we're increasing our inventory, we're increasing our footprint, and we're increasing our fill rate. So a lot of upside, and this is for years to come. So it's not a one-quarter project, it's for years of work for us to achieve and to sell the inventory and eventualize the market.

Understood. Thank you. And then on the in-car segment, I think you've alluded to sort of the $300,000 starting point for BYD. Can you just clarify how that ramps up? Should we kind of work out the economics from $300,000 as a starting point, or is that sort of a year-end exit point? I just wasn't clear on that. I was wondering if you can clarify.

Yeah, it's a good question. So for us, interesting, so BYD is our fourth car deal. They manufacture 4 million cars a year, but they manufacture in China, they manufacture in many countries. Our products are mostly available in countries that we have licensed products. It's difficult for us, even for us now, to know how many cars we're going to be in. As for example, we're not in China right now for many reasons, in terms of rights for music. So it's going to be something that we'll have to see quarter by quarter. So sorry not to be able to give you more details. But it's really, it's going to be interesting how BYD succeeds and how BYD succeeds. And right now we're in Israel with them. We're in Uzbekistan, Thailand, Singapore, and Latin America. So it's going to be interesting how they win all those markets. But for now, I must say, it's all new countries for us. So it's a bit of a We're also watching their success or their expansion.

Okay, great. Thank you. Last question on the subscription revenues within BCM segment. I mean, it continues to be stable, you know, obviously despite your legacy television component. Any kind of color on that? I mean, is it sort of the other segments that are kind of offsetting that or are you seeing some kind of stability there? As we kind of look to model that out, I was wondering if there's any commentary that you can share. A good point.

For sure, we're gaining a lot with our friends at Amazon. I think Amazon will launch in 10 to 12 new countries, so that's exciting. Singing Machine is doing very well with the karaoke machine. But on the opposite side, some of our cable, as cable companies lose customers, we also We got less subscription. So it's going to be a nice growth, but it's going to be a bit of a pivot until we pivot from the cable industry more to Amazon and over the top. And also, we reduced, and you can see in the NOPEX, significantly our investment in B2C post-COVID because the market was changing. So we're also seeing less subscribers on B2C. But again, more profit for us, more EBITDA, because our focus is more on B2B partnership.

Thank you very much. I'll leave it there. Thank you.

Next question will be from Drew McReynolds at RBC. Please go ahead.

Yeah, thanks very much. Good morning. Just a couple of follow-ups here on Aravinda's question. Just, Eric, on the pivot from kind of B2C to B2B and SBOD, you know, obviously that's been ongoing for a while now. You know, where are you on kind of that journey? Are you kind of close to kind of migrating, you know, most of what you want to do, or is this kind of a longer tail?

No, a good question. I think we even know for sure on the B2C side, when you stopped user acquisition like we did because there was no more return on investment. And we're seeing all our competitors because we get to see a lot of our competitors. They're all having a hard time on the B2C front, so it was the right decision. So we know the B2C revenues are down closer to $15 million right now, and that's decreasing by about 15% to 20%. So it's $15 million out of $360 million of sales. But again... We got part of the B2C that's decreasing, and then in that unit, we've got Singing Machine, which is our partner, and that one is increasing by 30 to 40%. So I would say stable, stable for the next few quarters. The offset of Singing Machine would be downsize of a user acquisition on our friends from Apple's.

Okay, okay, that's actually very helpful. On the connected car, I think last quarter you alluded to three or four kind of offerings that you have, like the karaoke, the music, I think trivia, and obviously Calm now. What's the plan to expand that, or is that kind of what you see as kind of the core offering, at least in the near term?

So interestingly, right now for the car, I think we said it to the board, we're by far the number one B2B, a sales team in the world. At CS, we met with every car company. When I say every, from Hyundai to every European car to Ford, GM, we're really engaged in a lot of different models. Our four key products is karaoke, music, Stingray music, com radio, and trivia. And we're really focused on the audio segment. So for now, Most of the tune-in is done while driving, 99%, and you can watch a video while driving a car. So we have the advantage of being the number one key partner for audio in cars. Interesting. A lot of different models. The first model is a CPS model. We have the advertising model. There's also a transactional model. I must say that the car business is... It is the holy grail of distribution, and it's going to be interesting how all the car companies pivot over the next few years. The good news is we're in talks with every one of them, so we're very excited about our penetration with this market, but this is a long-term play. The OEMs, when they plan, they plan from 2026 to 2038, so it's not something that we'll get free cash flow like we get on the TV business in one month. So it's a long-term plan, but for investors, it makes us very sticky. And we're even planning right now, believe it or not, to do karaoke microphones in every car in the world. So when you buy your EV car, you're going to get a microphone to sing karaoke. I know it sounds a bit, but there's a big demand from every car manufacturer to include our mics. So interesting.

Yeah, I mean, that would certainly be interesting in my car, I can tell you that. So two follow-ups here. First, sorry, I may have missed this in JP's opening remarks, just in terms of free cash flow priorities, presumably it is just debt repayment is that. And then the second question, are you able to maybe narrow in the, you know, strong quote-unquote revenue growth for fiscal 2025, like what kind of characterization is strong in terms of single-digit, double-digit, low, mid, high, that kind of granularity would be helpful.

Thank you. Thanks for the question. Regarding free cash flow, as you can see, we had an incredible quarter of $32 million. $4 million of that was a tax refund, but still our ability to generate free cash flow from EBITDA is strong. Our capex are lower. We expect CapEx to stay low. We're at 2.99. Right now, we've already, in this quarter, in the first five weeks, we paid $50 million of debt. So today we're standing at 2.86. I think we'll be below 2.8. And I think our goal is to be between 2.2 and 2.5. So we'll be below 2.5 in the next few quarters. So our new EBITDA is really generating high cash flow. And the connected TV business is, again, high, high cash flow business with very low OPEX or almost zero OPEX and zero CAPEX, so that's good. And in terms of, no, we expect to have a double digit, or in English we say high teens, so we expect to have double digit growth for this year and for next year based on the current agreement in place. Even if a lot of it is advertising, it is pretty much recurring. So we pretty much have, you know, we added 4 million of incremental EBITDA this quarter, and that 4 million is pretty much recurring. So let's see how, unless something major happens in the market, right now the management team feels very good.

Okay, just, sorry, Eric, just to clarify that last point. So in terms of your commentary in the press release on strong revenue growth for fiscal 2025 consolidated, That's what you're referring to in terms of double-digit?

For me, again, high teens. I don't want to say high teens, but again, just for the broadcasting and the commercial music. For us, we expect radio to be stable to plus 2%. So radio, very stable, green, and broadcasting and commercial, high teens. Okay. Thanks very much for all that. Thank you.

Next question will be from Jérôme Dubreuil at Desjardins. Please go ahead.

Hi, bonjour tout le monde. Thanks for taking my questions. Just on the retail media to start, I'm wondering about the sustainability of the growth. Obviously, very strong quarter and congrats for the big 100 million milestone. Just wondering what's been the source of success in the quarter? Is it the mood partnership, the more efficient sales force? And do you feel this is an inflection point in terms of growth or maybe something that you see being sustained? Obviously, probably not going to model 80% plus growth in the next few quarters, but if you can provide color on this, please.

Yes, a good question. So, for sure, it was an incredible quarter. So, no, I would not model 86%. I think that we can expect, again, we're always set to the market 40% growth, so I think we're still optimistic about that. The big component that's a big surprise for us is our success with the audio channels on the connected TVs. So last year we did 13 million hours in January, February, March, or in Q4, and this year we expect to do 40 million. So the fast channels or connected TVs, those are growing by 300%. And like I mentioned before, we did $4 million last year. We're going to do $12 million this year, and next year we'll do $24 million to $28 million. So that part is really recurring, and so that's growing by 300%. And we've got a lot more partners to launch. So we're very excited about the connecting TVs, and the free cash flow coming from that product is – extremely high. So I don't want to say too much, but I'm saying it's just going to be a cash flow machine for the years to come. And Samsung announced in December that their connected TVs revenues were up 65%. So we're dealing with a market that is growing, you know, the opposite of the cable industry. So it's going to be, and it's going to grow for the next, it's going to grow for the next multiple years. So interesting to be on that, uh, on that platform. So both combined makes us a very large growth, but I think 80% is too high. I'm closer to 40%.

That's great. Just on your comments on leverage, you said your goal is to be between two and two and a half. Correct me if I'm wrong, but I think maybe last time you provided an update on that in terms of longer-term goal was to be closer to two and a half to three. Is that a kind of change in priority and the leveraging targets or maybe I did not remember correctly?

No, no. For us, what changed like for every entrepreneur or for every business is the cost of capital. Interest rate, you know, when interest rate went 1 to 1.5, we're happy to 2.5 to 3. With interest rate now closer to 6.5, I think where we want to be between 2 and 2.5, we see positive sign of decreasing interest. The good news is we're able to deduct it from income tax, so that's the good news. But I think for us, a good target will be around 2.5, and I think that we'll achieve in the next few quarters. 2.5, I think, is a good number, and depending on what interest rates do. If interest rates go lower, then we could be more aggressive. But I think in terms of capital structure, we're very happy, and I think we're able to show our deleveraging.

That's right. The last one for me, just in terms of the next quarter, typically would be, you know, seasonally low. But meanwhile, your business is changing rapidly. So is seasonality changing a bit with the revenue mix evolving? Just thinking of how we should think about next quarter.

Yeah. So for us, on the broadcasting and commercial music side, our Again, a strong quarter with high double digits or high teens, so very, very comfortable. Radio, for sure, Q4 or January, February, March is the smallest quarter of the year, so it is seasonal. So you can see the trends over the last, since we've owned radio. But again, broadcasting strong. Radio, again, strong, good organic, but low season for radio.

Understood. Merci beaucoup.

Merci, Jean.

Next question will be from Scott Fletcher at CIBC. Please go ahead.

Thank you. Good morning. I wanted to, again, ask on the connected TV, it sounds like the growth there and into next year is expected to be pretty significant. Can you break down where that growth is coming from? Is it mostly new partners? Is it growth in hours? Is it possible for you to sort of disaggregate where that strong growth is going to come from on the connected TVs?

So for now, I must say we're very strong with the TV manufacturers. We just finished, we did a tour of Asia tour. We did Korea, Japan, and China in October. And I must say, from Samsung to LG to Vizio, all the different manufacturers around the world, Sony. So we're in every one of them. And I think our big bet was to tell them that we feel that the audio channels like we have on pay TV is a big success. And I think now, and they're TV manufacturers, so they always told us, oh, we want video, we don't want audio. But we were able to convince Samsung and LG, and the success is outstanding. So I think every TV manufacturer in the world, I think Roku, Pluto, all of these connected TVs, We'll take our audio channels and our music products. So we're very excited about the future of that trend for the years to come.

Okay, thanks. And then this may be looking a little bit too far out, but it does seem like you're going to pretty comfortably get below those leverage targets, at least by the end of next year. Like looking out, do you have a sense of what the capital allocation priorities are after you do sort of get the debt below your target range?

Yeah, sorry, a bit of a dry cough. Yeah, good question. So, yeah, we're getting to a point, I must say, that very good question, that we had a good discussion in the board yesterday, because we feel with our free cash flow coming on next few quarters, we're going to be very close to or below 2.5, and even looking to be, if things are good, even closer to 2. So there'll be a good discussion to have, and even, I guess, we'll be calling you guys, we'll be calling our analysts about, you know, what's the best capital allocation. In terms of acquisition, it's still, even if the market has gone a bit, interest rates are higher, a lot of companies are asking for high valuations, so we have to sit and wait, and we have strong organic sales, so it's going to be a good debate for a June meeting, what do we do with our capital allocation, meaning more NCIB, more debt repayment, or maybe even looking at dividends So it's good to be in a position to be able to ask yourself that question.

Yeah, I agree that it's the right position to be in. I'll leave it there. Thanks for the answers. Thanks, Scott.

Ladies and gentlemen, a reminder to please press star 1 on your touchtone phone if you would like to ask a question. And your next question is from Tim Casey at BMO. Please go ahead.

Yeah, thanks. Good morning. Eric, could you clarify your comment on strong revenue growth and stable margins in fiscal 25? What are you talking about? Can you just give us some clarity and maybe quantify what kind of margin range you're talking about? Another question I had was just, you know, you've invested a little bit more in the singing machine. Can you just add some color around that? Is that How big is that entity? Do you have a patch control? Do you want to control it, or is that just a joint venture partner? Thank you.

Tim, thank you very much. Both good questions. In terms of growth, we expect to have, again, high teens or double-digit for next year. A lot of our contracts are Samsung, and some of our deals only started in December, so we'll get the upswing for the next 12 months. Our deal with the banks is also starting in January, so we're going to get the upswing for the next 12 months. So we're in a very good position, so happy about that. And I must say that on the new business, this year, we estimate we're adding about $25 million in broadcasting that generated $16 million in new EBITDA. So our new EBITDA, our new sales are generating almost 60% EBITDA margin. So it's interesting to see... how this moves along, but for sure the connected TVs, the retail media, and all of the new business we're doing is high EBITDA margin. So very excited for 2025. And also the other news is our OPEX are under control, as you can see, so we're able to have high growth without building a new factory or without having to hire hundreds of employees. Singing Machine, very good question. Yeah, Thinking Machine is purely a joint venture. They're the largest manufacturer of karaoke machines in the world. I must say they do great products. We're the software provider. Their new Wi-Fi machine is very strong. And for us, it's a strong partnership. We can't go into details, but we make a lot of money or a lot of revenues from the licensing of karaoke. But it is purely a joint venture. There's no intention for us to be in the manufacturing business. Also, it's a good example, the microphones that we spoke in for Honda and for BYD and Tesla, every car manufacturer wants the microphone. It will be singing machine building the microphone. It won't be us. We're really a music licensing distributor, but we're happy to have them as a key partner.

Can we go back to the margin question? What kind of margins are you thinking about for 25 would you be comfortable with on a consolidated bid?

Consolidated is always, you know, but on the broadcasting and revenue, for sure, above 40%. The margin will just increase with these new categories. The radio business we see very stable. Whatever margins we're having right now, for sure we had the little setback from resound. that affected our margins, but radio we feel to be very stable for the next few years, and broadcasting above 40%, and we see that our EBITDA margin increasing slightly, but improving, not by, but improving by 1 or 2% every year based on our model, so we're in a good position. So we're very happy about our EBITDA margins and the growth.

Thank you.

Thank you, Tim.

And at this time, we have no other questions registered. Please proceed.

All right. Thank you again. Thank you for all the analysts for your time and your commitment towards the public companies. I think it's important to have this ecosystem. So we appreciate your questions and your attention. And hopefully we can have a few more good quarters like this and spend time together. So merci tout le monde. Have a great week.

Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Enjoy the rest.