Reservoir Media raised its outlook for the coming year and posted mid-single-digit growth on strong growth in digital and simultaneous revenue.
The New York-based company reported Wednesday that revenue rose 6% to $40.7 million in the fiscal first quarter ended Sept. 30 (organic growth excluding the impact of acquisitions was 5%). Adjusted earnings before interest, taxes, depreciation and amortization increased 11% to $17.6 million.
Music publishing revenue increased 10% to $28.6 million, primarily due to catalog acquisitions and higher prices for digital streaming services. Digital revenue rose 22% to $15.6 million, and concurrent rights fees increased 30% to $5.8 million, the CEO said, as film and TV licensing “returned to pre-strike levels.” Gornar Khosrowshahi during an earnings call Wednesday. The company said performance revenue fell 22% to $5.1 million due to “airtime on hit songs.” Machinery royalties fell 13% to $1.1 million.
Recorded music revenue fell 1% to $10.7 million. Reservoir attributed the year-over-year decline to rap icon De La Soul’s physical catalog reissues during the previous year. Physical recorded music revenue fell 21% to $1.5 million. Digital revenue fell 0.1% to $7.2 million. Neighboring rights revenue increased by 35% to US$1.1 million, while royalties increased by 3% to US$0.9 million.
Last quarter, Reservoir was licensed to Snoop Dogg’s publishing catalog and Snoop’s Death Row Records, and teamed up with Canadian singer-songwriter kd lang, country writer and producer Travis Heidelman, songwriter Jon Decious, writer and producer Kes Kamara and Writer and producer Ben signed the deal. The company also purchased Billy Strange’s publishing catalog (A Little Less Conversation, Clean Up Your Own Backyard) and received royalties from Jack Douglas, who Produced hits for artists including Aerosmith and Cheap Trick.
“Looking ahead to the second half of fiscal 2025, our pipeline continues to be strong with more than $1 billion of transactions under consideration at attractive entry multiples,” Khosrowshahi said. She added that Reservoir is looking for “a better price-to-earnings multiple “Opportunities,” “But I still see a lot of deals being traded at very high P/E multiples. I think the long-term value of these assets is recognized, so these multiples are warranted.”
Reservoir slightly raised its guidance for the full fiscal year. Revenue range is $150-153 million (previously $148-152 million), and adjusted EBITDA is $59-62 million (previously $58-61 million).
Reservoir Media shares were up 0.3% at $8.81 as of midday, after surging as high as $9.09, just below the stock’s 52-week high of $9.20.
Reservoir Q1 2025 Financial Metrics:
- Revenue: up 6% to $40.7 million
- Adjusted EBITDA: up 11% to $17.6 million
- Net profit: down 78% to US$200,000
- Publishing revenue: up 10% to $28.6 million
- Recorded music revenue: down 1% to $10.7 million
