Technology licensing is driving higher revenues at digital music and radio services company 7digital (LON:7DIG).
The company said higher margin earnings from licensing access to its streaming platform and catalogue were replacing revenues from downloaded music sales to consumers in line with market hopes.
It expects group turnover in the half-year to June 30 to have risen 3% to about £5.2mln. But turnover from technology licensing was set to rise about 27% to about £3.1mln.
The rebalancing of earnings was leading to improved gross margins, which were expected to rise to over 60% compared with 49% in the same period last year, 7digital said.
It won contracts in the last three months worth at least £1.9mln.
New radio customers include UK broadcaster Jazz FM, which will use 7digital's platform and plan to launch an international music service.
The group said it had a healthy sales line-up for 2015 and its board was still confident of meeting full-year expectations.
Chief executive Simon Cole said: "There is a lot of activity in this sector and major consumer product launches like that of Apple serve to create business to business demand for us."
Shares in 7digital had risen 1.62p or more than 10% to 17p shortly after midday in London.