Reservoir Media Posts 19% Revenue Gain, Increases Full-Year Guidance
Written by djfrosty on February 5, 2025
Bolstered by both organic growth and additions to its repertoire, Reservoir Media posted strong gains in its latest fiscal quarter and raised its guidance for fiscal year revenue and earnings.
Revenue increased 19% to $42 million in its fiscal third quarter ended Dec. 31, the company announced Wednesday. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a commonly used measure of profitability, climbed 26% to $17.3 million.
During Wednesday’s earnings call, CEO Golnar Khosrowshahi cited the company’s repertoire, its ability to capture demand for its music for the 16% improvement in music publishing revenues and the 20% jump in recorded music revenues. In addition, Khosrowshahi attributed the company’s “commitment to cost containment and closely managed business operations” to the improvement in adjusted EBITDA.
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In the publishing division, price increases at streaming services helped digital revenues grow 20% to $16.7 million while mechanical royalties jumped 143% to $900,000 on the strength of physical sales of existing catalog. Performance and sync revenues improved just 2% and 3%, respectively. In the recorded music division, digital revenue grew 24% to $8.1 million, physical sales rose 18% to $2 million and sync royalties jumped 23% to $1 million. Neighboring rights revenue fell 7% to $900,000. The quarter was helped by an unspecific royalty recovery from a routine audit, said CFO Jim Heindlmeyer.
Reservoir Media has spent over $70 million on catalog acquisitions in the first three quarters of its fiscal year. Those deals include the acquisition of the catalog of South African composer Lebo Morake and the producer royalties of Jack Douglas (Aerosmith, Cheap Trick).
“The pipeline remains robust, and we continue to be excited about the opportunities that are before us, we continue to have that populated with more off market deals, and that’s a strategy that we’ve been able to execute on successfully for many years now,” said Khosrowshahi.
The company also signed a publishing deal with k.d. lang and extended its deal with songwriter Serban Cazan (“Mantra” by Jennie).
After exceeding internal expectations in the quarter, Reservoir Media raised its full-year guidance. The company now expects revenue to be $155 million to $158 million, an increase of $5 million from the previous quarter’s guidance. Adjusted EBITDA to fall within $61.5 million and $64.5 million, a $2.5 million increase.
Shares of Reservoir Media responded by climbing as high as $8.85, up nearly 9%, in early Wednesday trading before settling at $8.30, up 2.1%, by midday.