RSVR — Reservoir Media, Inc.

Reservoir Media Q2 Fiscal 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $45.4 million, a 12% increase year-over-year (7% organic growth).
• Segments: Recorded music revenue grew 21% to $13 million; Music Publishing revenue increased 8% to $30.9 million.
• OIBDA: $18.2 million, up 10% year-over-year.
• Adjusted EBITDA: $19.4 million, also up 10% year-over-year.
• Net Income: Approximately $2.2 million, compared to $152,000 in Q2 FY2025.
• Earnings Per Share: $0.03, up from $0.00 in the prior year.
• Total Debt: $421.8 million, with net debt at $393.9 million, an increase from $366.7 million as of March 31, 2025.
• Cash Flow: Cash provided by operating activities was $25.3 million, an increase of $3.4 million year-over-year.

2. Strategic Updates and Business Highlights:

• Catalog Acquisitions: Notable acquisition of Miles Davis' catalog, including publishing rights and name/likeness, aimed at enhancing digital listenership.
• New Partnerships: Extended publishing deal with Nick Drake's catalog and signed new agreements with artists from the MENA region, including Iraqi and Kuwaiti catalogs.
• Sync Revenue Growth: Significant year-over-year growth in sync revenue, driven by placements in popular media and classic hits.
• Upcoming Initiatives: Plans for a series of events and collaborations to celebrate Miles Davis' 100th birthday in 2026, including a feature film and live performances.

3. Forward Guidance and Outlook:

• Revenue Guidance: Increased and narrowed to $167 million to $170 million for FY2026, implying 6% growth year-over-year.
• Adjusted EBITDA Guidance: Updated to $70 million to $72 million, signaling an 8% increase over the prior year.
• Pipeline: Active deal pipeline exceeding $1 billion, indicating potential for future growth.

4. Bad News, Challenges, or Points of Concern:

• Rising Costs: Operating expenses increased, with total cost of revenue up 11% and administrative expenses up 15%.
• Interest Expense: Increased to $6.7 million due to higher debt levels and interest rates, impacting net income.
• Synchronization Revenue Variability: Decline in synchronization revenue noted due to timing of licenses, which could affect future revenue consistency.

5. Notable Q&A Insights:

• Organic Growth Drivers: Management indicated that the 7% organic growth aligns with industry expectations, driven by both new acquisitions and existing catalog performance.
• Miles Davis Acquisition: The acquisition was part of an ongoing pipeline rather than an off-market deal, with expectations for significant value enhancement through planned initiatives.
• G&A Expense Outlook: General and administrative expenses are expected to stabilize at current levels for the remainder of the year, with fluctuations primarily tied to management business revenue.
• Revenue Growth Factors: Future growth will be influenced by industry trends, including subscriber growth and anticipated price increases, alongside Reservoir's own initiatives to enhance catalog value.

Overall, Reservoir Media demonstrated solid financial performance in Q2 2026, supported by strategic acquisitions and a robust catalog, while navigating challenges related to rising costs and synchronization revenue variability. The company remains optimistic about its growth trajectory and ongoing initiatives.