Reservoir Media raised its outlook for next year to mid-single-digit growth thanks to strong gains in digital and sync revenue.
The New York-based company's revenue rose 6 percent to $40.7 million in the fiscal first quarter ended Sept. 30, the company said Wednesday (organic growth that excludes the impact of acquisitions was 5 percent). Adjusted earnings before interest, taxes, depreciation and amortization rose 11% to $17.6 million.
Music publishing revenue rose 10% to $28.6 million due primarily to catalog acquisitions and price increases in digital streaming services. Digital revenue rose 22% to $15.6 million and sync rights rose 30% to $5.8 million as film and TV licensing “returns to pre-strike levels,” CEO said Golnar Khosrowshahi during Wednesday's earnings call. Performance revenue fell 22 percent to $5.1 million, due to “the timing of hit songs,” the company said. Engineers' royalties fell 13% to $1.1 million.
Recorded music revenue fell 1% to $10.7 million. Reservoir attributed the year-over-year drop to rap icon De La Soul's reissue of their physical catalog in the previous period. Physical revenue from recorded music fell 21% to $1.5 million. Digital revenue fell 0.1% to $7.2 million. Adjacent rights revenue rose 35% to $1.1 million and sync rights rose 3% to $900,000.
Last quarter, Reservoir licensed Snoop Dogg's publishing catalog and Snoop-owned Death Row Records and signed deals with the Canadian singer-songwriter kd langcountry writer-producer Travis Heidelman, songwriter Jon Decious, writer-producer Kes Kamara and writer-producer Ben Stancombe. The company also bought the publishing catalog of Billy Strange (“A Little Less Conversation,” “Clean Up Your Own Backyard”) and acquired the rights to Jack Douglas, who produced hits for artists such as Aerosmith and Cheap Trick.
“As we look to the second half of fiscal 2025, our pipeline continues to remain strong, with more than $1 billion of transactions under review at attractive entry multiples,” said Khosrowshahi. Reservoir is looking at opportunities at “better multiples,” he added, “but I'm still seeing a significant number of trades trading in the low-teens. And I think the long-term value of those assets is being recognized, thus securing those multiples.”
Reservoir raised guidance slightly for the full fiscal year. Revenue in the range of $150-153 million (from $148-152 million) and adjusted EBITDA in the range of $59-62 million (from $58-61 million).
Shares of Reservoir Media were up 0.3% at $8.81 by midday, after jumping to $9.09, just short of the stock's 52-week high of $9.20.
First quarter 2025 financial metrics for Reservoir:
- Revenue: up 6% to $40.7 million
- Adjusted EBITDA: up 11% to $17.6 million
- Net income: down 78% to $200,000
- Publishing revenue: up 10% to $28.6 million
- Recorded music revenue: down 1% to $10.7 million
from our partners at https://www.billboard.com/pro/reservoir-media-q1-earnings-revenue-digital-sync-gains/
