RSVR — Reservoir Media, Inc.

Reservoir Media Q3 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $45.6 million, a 5% year-over-year organic growth and 8% including acquisitions.
• Music Publishing Revenue: Increased by 12% to $30.1 million, driven by performance revenue and digital growth.
• Recorded Music Revenue: Rose 8% to $12.9 million, supported by digital revenue and acquisitions.
• OIBDA: $18.1 million, up 11% year-over-year.
• Adjusted EBITDA: $19.2 million, also up 11% year-over-year.
• Net Income: Approximately $2.2 million, down from $5.3 million year-over-year, primarily due to a loss on fair value of swaps and increased interest expense.
• Earnings Per Share: $0.03, compared to $0.08 in the prior year.
• Total Debt: $452.3 million, with net debt at $431.7 million, up from $366.7 million as of March 31, 2025.

2. Strategic Updates and Business Highlights:

• Continued focus on acquiring quality music catalogs, including Bertie Higgins and the Miles Davis catalog.
• New partnerships with Gladys Knight and TI to enhance the portfolio of evergreen hits.
• Investment in emerging markets, particularly through joint ventures in India and Jamaica, targeting growth in local music scenes.
• Recognition at the Grammys with multiple wins attributed to Reservoir's roster, highlighting the strength of their catalog.

3. Forward Guidance and Outlook:

• Increased full-year revenue guidance from $167-$170 million to $170-$173 million, implying 8% growth year-over-year.
• Adjusted EBITDA guidance raised from $70-$72 million to $71.5-$73.5 million, indicating over 10% growth at the midpoint.
• Management remains optimistic about maintaining strong M&A activity and achieving growth in the upcoming fiscal year.

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

• Decline in net income attributed to increased interest expenses and losses on financial instruments.
• Rising total debt levels raise concerns about financial leverage as the company continues its acquisition strategy.
• Uncertainty surrounding the CRB process and potential impacts on royalty rates could pose future risks.
• Seasonal revenue decline expected in Q4, although management noted no unusual one-time events affecting this outlook.

5. Notable Q&A Insights:

• Management confirmed ongoing M&A activity is expected to continue at a strong pace in Q4.
• Acquisition multiples remain favorable, with no significant changes observed in historical pricing.
• Discussion on activist investor engagement was met with a focus on business growth and value delivery without further elaboration.
• Insights on international versus domestic deal pricing indicated more favorable acquisition opportunities in emerging markets, particularly outside of Latin America.
• Mixed outlook on streaming price increases and royalty agreements, with both tailwinds and headwinds anticipated in the coming year.

Overall, Reservoir Media demonstrated solid financial performance in Q3 2026, with strategic acquisitions and partnerships bolstering growth, although challenges related to debt levels and uncertain market conditions were acknowledged.