New York-headquartered music rights company Reservoir Media has reported a 6% YoY increase in revenue for the latest quarter, and has raised its revenue and EBITDA forecasts for the fiscal year.
The company reported revenue of $40.7 million for its fiscal Q2 2025, corresponding to calendar Q3 2024. That represents a 5% YoY increase on an organic basis, or 6% YoY when including acquisitions.
“From Snoop Dogg to k.d. lang to Jack Douglas and more, this quarter represented a period of notable growth for our roster,” Reservoir Founder and CEO Golnar Khosrowshahi said in a statement.
“Reservoir has proven again its capability to attract top-tier talent who help define their various music genre landscapes, popular culture, and beyond.”
The company reported a 10% YoY jump in publishing revenue to $28.6 million, while recorded music revenue fell 1% YoY to $10.7 million, which the company attributed to a spike in sales in the year-ago quarter, particularly in physical sales, from the release of multiple De La Soul albums.
Digital accounted for the largest share of publishing revenues, up 22% YoY to $15.6 million. Synch revenues also saw a notable gain, up 30% YoY to $5.8 million. Those gains were partly offset by a 22% YoY decline in performance revenues, to $5.1 million, while mechanical revenue fell 13% YoY, to $1.1 million.
On the recorded music side, digital revenue fell 1% YoY to $7.2 million, while physical fell 21% YoY to $1.5 million – again, due to the unfavorable comparison with last year’s release of De La Soul albums.
Neighboring rights revenues shot up 35% YoY to $1.1 million, while synch revenues rose 3% YoY to $0.9 million.
Overall, the company reported adjusted EBITDA of $17.6 million for the quarter, up 11% YoY, which Reservoir attributed to revenue growth and improved gross margin.
Operating income came in at $10.1 million, up $4.0 million from the same quarter a year earlier, while OIBDA (operating income before depreciation and amortization) came in at $16.6 million, up 34% YoY.
The company partly attributed the operating income and OIBDA gains to a $2.7 million write-off of recoupable legal fees in the same quarter a year earlier.
Reservoir reported net income of $0.2 million for the quarter, which rounds to $0.00 per share, compared to $0.7 million, or $0.01 per share, in the year-ago quarter. The decline was primarily due to a loss on fair value of swaps during the quarter, compared to a gain on swaps a year earlier.
In the wake of the improved earnings numbers, Reservoir upgraded its outlook for the current fiscal year, and is now issuing guidance of $150 million–$153 million in revenue for the fiscal year ending March 31, 2025. That would mark a 5% YoY jump in revenue at the mid-point, and is up from an earlier forecast of $148 million-$152 million.
The company also upped its adjusted EBITDA guidance to $59 million–$62 million, which would be a 9% YoY jump at the mid-point. That’s up from guidance of $58 million-$61 million in previous earnings reports.
“Reservoir has proven again its capability to attract top-tier talent who help define their various music genre landscapes, popular culture, and beyond.”
Golnar Khosrowshahi, Reservoir
“Our ability to refine our revenue guidance range is reflective of our confidence in the portfolio of assets created by our Reservoir-associated artists, while internal efforts to control costs and thus expand margins enable our increased Adjusted EBITDA outlook,” CFO Jim Heindlmeyer said.
“This continuation of robust cash flows allows us to opportunistically utilize our available debt to identify additional productive deals for the foreseeable future. We see a clear path to achieving our adjusted fiscal year 2025 financial guidance.”
“We see a clear path to achieving our adjusted fiscal year 2025 financial guidance.”
Jim Heindlmeyer, Reservoir
Reservoir struck a number of deals during fiscal Q3, including a domestic (US) publishing admin deal with Snoop Dogg, which also includes the publishing catalog of Snoop’s Death Row Records.
The company also struck a global publishing deal with Canadian pop-country star k.d. lang, and acquired the catalog of Elvis Presley songwriter Billy Strange, which includes a number of Elvis hits.
Those deals will be reflected in Reservoir’s earnings numbers in coming quarters.Music Business Worldwide