Reservoir Media Revenue Up 6% on Digital, Sync Gains
Written by djfrosty on October 30, 2024
Reservoir Media raised its outlook for the coming year and delivered mid-single-digit growth thanks to strong gains in digital and synchronization revenues.
The New York-based company’s revenue increased 6% to $40.7 million in the fiscal first quarter ended Sept. 30, the company announced Wednesday (organic growth that excludes the impact of acquisitions was 5%). Adjusted earnings before interest, taxes, depreciation and amortization climbed 11% to $17.6 million.
Music publishing revenue jumped 10% to $28.6 million due mainly to catalog acquisitions and price increases at digital streaming services. Digital revenue grew 22% to $15.6 million and synchronization royalties increased 30% to $5.8 million as film and TV licensing is “getting back to pre-strike levels,” said CEO Golnar Khosrowshahi during Wednesday’s earnings call. Performance revenue fell 22% to $5.1 million, due to “the timing of hits songs,” the company said. Mechanical royalties dropped 13% to $1.1 million.
Recorded music revenue fell 1% to $10.7 million. Reservoir attributed the year-over-year decline to the reissue of rap icons De La Soul’s physical catalog in the prior-year period. Recorded music physical revenue sank 21% to $1.5 million. Digital revenue fell 0.1% to $7.2 million. Neighboring rights revenue jumped 35% to $1.1 million and synchronization royalties rose 3% to $900,000.
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Last quarter, Reservoir licensed of Snoop Dogg’s publishing catalog and Snoop-owned Death Row Records, and signed deals with Canadian singer-songwriter k.d. lang, country writer-producer Travis Heidelman, songwriter Jon Decious, writer-producer Kes Kamara and writer-producer Ben Stancombe. The company also purchased the publishing catalog of Billy Strange (“A Little Less Conversation,” “Clean Up Your Own Backyard”) and acquired the royalties of Jack Douglas, who produced hits for such artists as Aerosmith and Cheap Trick.
“As we look forward to the second half of fiscal 2025 our pipeline continues to remain strong, with over $1 billion in transactions under consideration at attractive entry multiples,” said Khosrowshahi. Reservoir is looking at opportunities with “better multiples,” she added, “but I still continue to see a substantial number of transactions trading at high-teen multiples. And I think the long-term value of these assets is recognized, thus warranting these multiples.”
Reservoir slightly increased guidance for the full fiscal year. Revenue to a range of $150-153 million (from $148-152 million) and adjusted EBITDA to $59-$62 million (from $58-61 million).
Shares of Reservoir Media were up 0.3% to $8.81 by midday after jumping as high as $9.09, just shy of the stock’s 52-week high of $9.20.
Fiscal first quarter of 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