Destiny Media Technologies Inc. Q1 Fiscal 2026 Earnings Overview

Destiny Media Technologies Inc. (OTCQB: DSNY), a leader in digital media distribution and promotional technologies for the music industry, held its Q1 2026 earnings call on January 15, 2026 to discuss financial results, strategic partnerships, product growth, and the company’s outlook.

Financial Results and Growth Metrics

For the fiscal first quarter ended November 30, 2025, Destiny Media reported the following key financial outcomes:

• Total revenue of approximately $1.24 million, representing modest growth from the prior year.
• Net income of about $84,000, or $0.01 per share, highlighting a profitable start to the fiscal year.
• Customer growth increased by 7.3%, indicating enhanced market adoption.
• Adjusted EBITDA of roughly $0.25 million, stabilizing the company’s adjusted profitability.
• Cash balance increased by about $244,500, supporting liquidity and strategic flexibility.

Management emphasized that pricing changes and targeted cost reductions began taking effect late in the quarter and are expected to support stronger performance in upcoming periods.

Long-Term Strategic Agreement with Universal Music Group

A major highlight of the call was the announcement of a three-year extension agreement with Universal Music Group (UMG), one of the company’s most significant long-term clients. Under this arrangement:

• The base annual fee is set at $1.6 million in the first year, with inflation indexing for years two and three.
• This fee structure excludes new development work, allowing for separate additional revenue streams if future projects are agreed upon.
• The agreement provides stability but is expected to reduce 2026 revenue by about 6.5% due to lower short-term premium fees compared to prior arrangements.

CEO Fred Vandenberg explained that the long-term contract establishes a “platform anchor” that supports future collaboration and enhances predictability for both parties.

Product Innovation and Independent Artist Momentum

During the first quarter, Destiny Media continued to roll out key product initiatives designed to expand value for independent artists and labels:

• The introduction and expansion of Caster and Caster Plus, a self-serve digital distribution platform, which has increased conversion rates and customer onboarding.
• Improvements in marketing and sales workflows that contributed to a 24% increase in lead generation and stronger qualified prospects.
• Music Tracking Radar (MTR) revenue increased by more than 30%, though the product still represents a small portion of total earnings.

Vandenberg stressed that independent label initiatives are central to offsetting the impact of the lower Universal fee structure and driving future revenue growth.

Cost Efficiency and Operational Improvements

Destiny Media announced that it realized a total cost reduction of approximately 1.3% across all spending categories during Q1, including an 8.2% reduction in salary and wages.

These cost savings are attributed to the modernization of internal platforms and more efficient operating processes. The company noted that additional cost optimization could reduce total spending by up to 16% if implemented.

Sales and Marketing Highlights

The sales team reported increased engagement with major label accounts, including in-person platform demonstrations with key partners such as RCA, Epic, and Virgin.

Additionally, Destiny Media’s launch of a satellite radio list offering higher royalties per spin is positioned as a compelling new service for independent artists and labels alike.

Analyst Questions and Company Responses

An extended Q&A session addressed various investor concerns, including:

• Growth timing and the pace of revenue expansion.
• Details on potential future acquisitions and the company’s capital allocation strategy.
• Clarification on geographic revenue breakdowns and product segment performance.
• Updates on litigation cost awards and their expected effect.

Leadership reiterated its focus on generating positive gross margins, balancing investment with profitability, and exploring strategic acquisitions to expand market share.

Outlook and Forward Guidance

While the company did not provide formal guidance, it indicated that if current growth trends continue — especially with independent labels — the full fiscal year could see meaningful revenue expansion. Cost efficiencies and strategic product enhancements are expected to support margin improvement going forward.

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