Acquisitive music rights firm Reservoir Media has posted its twelfth consecutive quarter of year-over-year income progress, although the corporate has additionally recorded a internet lack of $0.5 million.
The New York-headquartered firm launched its earnings for Q1 of its fiscal 2025, which corresponds to the second quarter of calendar 2024, on Wednesday (July 31).
The corporate clocked income of $34.3 million, an 8% YoY improve when together with acquisitions, or a 6% YoY improve organically.
A 15% YoY bounce in publishing revenues greater than offset a 7% slide in recorded music revenues.
The corporate reported a 58% YoY improve in working earnings, at $5.0 million, versus $3.1 million within the year-ago interval. OIBDA got here in at $11.3 million, up 23% YoY, with adjusted EBITDA of $12.6 million, up 25%.
Nonetheless, the corporate’s internet earnings got here in at -$5.0 million, which Reservoir attributes to losses on the truthful worth of rate of interest swaps (therefore the divergence between working earnings and internet earnings).
“Our leads to the primary fiscal quarter replicate a continuation of our confirmed monitor report of monetary outperformance within the three years since we grew to become a publicly traded firm,” Founder and CEO Golnar Khosrowshahi stated in a word to buyers.
“We now have had year-over-year income progress each quarter since our itemizing, and now we have raised steerage over the course of every fiscal yr.”
She added: “The music business has loved an unprecedented return to progress, which consultants predict will proceed for the following decade… We’re well-positioned to seize extra natural progress whereas persevering with to pursue accretive alternatives.”
Publishing income
Reservoir’s publishing income got here in at $24.0 million, up 15% YoY, which the corporate stated was pushed by catalog acquisitions, income from present catalogs, and a rise in costs at a number of music streaming companies.
Amongst its catalog acquisitions over the previous yr had been the producer rights and publishing catalog of 2Pac producer Huge D Evans (aka Deon Evans) and a publishing deal for the works of Latin Music hitmaker Rudy Perez (Natalie Cole, Jose Feliciano, Luis Miguel).
Digital fashioned the biggest section of Reservoir’s publishing income, at $14.6 million (up 23% YoY), adopted by efficiency rights at $5.1 million (up 14%) and synch at $2.8 million (down 7%).
Music publishing OIBDA jumped 19% YoY to $6.8 million, whereas working earnings jumped 56% YoY to $2.2 million.
Recorded music income
Recorded music revenues got here in at $9.6 million, a 7% YoY slide from $10.4 million a yr earlier.
The corporate attributes the lower to the discharge of De La Soul’s catalog within the year-ago interval, which brought on a spike in recorded revenues, significantly within the bodily class, that made for a tough year-on-year comparability within the newest quarter.
Bodily revenues fell 62% YoY, to $1.4 million versus $3.6 million a yr earlier.
“The music business has loved an unprecedented return to progress, which consultants predict will proceed for the following decade… We’re well-positioned to seize extra natural progress, whereas persevering with to pursue accretive alternatives.”
Golnar Khosrowshahi, Reservoir
Digital revenues jumped 17% YoY to $6.6 million, whereas neighboring rights grew 29% YoY to $1.1 million, and synch revenues jumped 87% to $0.6 million.
Recorded music OIBDA improved by 27% YoY to $4.5 million, whereas working earnings jumped 53% YoY, to $2.7 million.
“Our top-line progress and price containment efforts within the first quarter present a powerful basis for the rest of the fiscal yr,” CFO Jim Heindlmeyer stated in a press release on Wednesday.
“Our wholesome cashflow technology and out there debt give us the monetary flexibility to proceed including to our portfolio and to pursue new natural progress alternatives within the coming quarters. We’re properly positioned to attain our beforehand issued 2025 fiscal yr monetary steerage.”
That steerage, which remained unchanged from the prior quarter, requires revenues of $148 million–$152 million for fiscal 2025, which ends on March 31, 2025, a rise of 4% YoY on the midpoint.
The corporate is forecasting full-year EBITDA at $58 million–$61 million, a 7% YoY improve on the midpoint.
“Our wholesome cashflow technology and out there debt give us the monetary flexibility to proceed including to our portfolio and to pursue new natural progress alternatives within the coming quarters.”
Jim Heindlmeyer, Reservoir
The corporate’s comparatively excessive debt stage, which has at occasions been the topic of questions from analysts, got here in at $324.1 million (whole debt) and $307.8 million (internet debt) towards money and money equivalents of $16.4 million (down barely from year-ago ranges).
That compares towards a present market capitalization of $540.5 million.
The corporate reported it has $121.2 million out there for borrowing underneath its revolving credit score facility, for whole out there liquidity of $137.6 million.
In an investor factsheet launched earlier this calendar yr, Reservoir stated it had spent practically $1 billion on catalog acquisitions and signings because it launched in 2007.
Reservoir’s shares had been down round 1% on pre-market buying and selling on the NASDAQ Wednesday, at round $8.30 per share.Music Enterprise Worldwide
