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 an 8% increase including acquisitions.
• Music Publishing Revenue: Up 12% to $30.1 million, driven by performance revenue and digital growth.
• Recorded Music Revenue: Increased by 8% to $12.9 million, benefiting from digital revenue and neighboring rights, but offset by a decrease in synchronization revenue.
• Operating Income Before Depreciation and Amortization (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 in the prior year, impacted by a loss on fair value of swaps and increased interest expense.
• Earnings Per Share: $0.03 compared to $0.08 in the previous year.
• Total Debt: $452.3 million, with net debt at $431.7 million, an increase from $366.7 million in March 2025.
• Cash Flow from Operating Activities: Increased by $5.1 million year-over-year to $38.2 million.

2. Strategic Updates and Business Highlights

• Acquisitions: Continued focus on acquiring quality catalogs, including rights to Bertie Higgins and the Miles Davis catalog, enhancing the portfolio with evergreen hits.
• New Partnerships: Agreements with Gladys Knight and TI to expand the catalog and revenue streams.
• Emerging Markets: Strengthened presence in India and Jamaica, with joint ventures aimed at cultivating local talent.
• Recognition: Reservoir's roster contributed to 10 Grammy wins, showcasing the strength of its catalog.

3. Forward Guidance and Outlook

• Increased Revenue Guidance: Raised full-year revenue guidance to $170 million - $173 million, implying 8% growth versus fiscal 2025.
• Adjusted EBITDA Guidance: Increased to $71.5 million - $73.5 million, signaling over 10% growth year-over-year.
• M&A Activity: Management expects continued robust deal activity in Q4 2026, maintaining favorable acquisition multiples.

4. Bad News, Challenges, or Points of Concern

• Decline in Net Income: Significant drop in net income due to unfavorable fair value adjustments and increased interest expenses.
• Increased Debt Levels: Rising debt levels could pose risks if not managed effectively, particularly with ongoing acquisitions.
• Market Uncertainty: Potential headwinds from regulatory uncertainties (CRB process) and the evolving landscape of streaming royalty agreements.

5. Notable Q&A Insights

• Debt and Acquisition Strategy: Management confirmed they are on track for continued M&A activity, with no significant changes in acquisition multiples.
• Seasonality Concerns: Analysts noted potential seasonal revenue declines in Q4, but management indicated no unusual events expected to impact this quarter.
• G&A Expenses: Fluctuations in general and administrative expenses were discussed, attributed to variable commissions related to management business.
• Market Dynamics: Management acknowledged both tailwinds (streaming growth, price increases) and headwinds (regulatory uncertainties) affecting future performance.

Overall, Reservoir Media demonstrated solid growth in Q3 2026, with strategic acquisitions and partnerships enhancing its portfolio, although challenges related to net income and rising debt levels were noted. The company remains optimistic about its growth trajectory and market positioning.