RSVRW — Reservoir Media, Inc.

Summary of Reservoir Media's Q4 2026 Earnings Call

1. Key Financial Results and Metrics:

• Q4 Revenue: $47.5 million, a 15% increase year-over-year.
• Q4 Adjusted EBITDA: $21.2 million, up 16% from the prior year.
• Net Income (Q4): $4.1 million, compared to $2.7 million in Q4 2025.
• Full Year Revenue (FY26): $175.7 million, exceeding guidance, with music publishing up 9% and recorded music up 16%.
• Full Year Adjusted EBITDA: $73.6 million, a 12% increase year-over-year.
• Diluted EPS for FY26: $0.13, compared to $0.12 in FY25.
• Total Debt: $455.7 million, up from $366.7 million the previous year.

2. Strategic Updates and Business Highlights:

• Acquisitions: Deployed approximately $120 million for catalog acquisitions, including the notable acquisition of Miles Davis's catalog.
• Talent Signings: New signings include contemporary artists across various genres, reinforcing Reservoir's diverse catalog.
• International Expansion: Launched a subsidiary in India (Pop-India) and expanded operations in the MENA region with the acquisition of Viral-Wave.
• Sync Business Growth: Recorded a 39% increase in recorded music synchronization revenue, driven by major placements in films and TV shows.

3. Forward Guidance and Outlook:

• FY27 Revenue Guidance: Expected to be between $186 million and $191 million.
• FY27 Adjusted EBITDA Guidance: Projected between $75 million and $79 million.
• Growth Expectations: Anticipates continued growth driven by disciplined acquisition strategy and cost management, with organic growth expected to remain in the mid-single digits.

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

• Rising Administrative Expenses: Increased by 12% in FY26, partly due to acquisitions, which may impact future margins.
• Lower Margin Acquisitions: The acquisition of Viral-Wave is expected to contribute to lower overall margins due to its nature as a distribution business.
• Interest Expense Increase: Rose to $26.5 million for FY26, which may pressure net income moving forward.
• CRB V Proceedings: Ongoing discussions with no material updates, with cautious optimism but no impact factored into forecasts.

5. Notable Q&A Insights:

• Viral-Wave Acquisition: While it brings an established client base, it is a lower-margin business, which may affect overall profitability.
• EBITDA Margin Concerns: Guidance suggests a slight step down in EBITDA margins due to higher administrative costs and the impact of lower-margin acquisitions.
• International Operations: Currently a headwind due to lower EBITDA margins compared to the core business, though growth opportunities are recognized.
• Revenue Seasonality: Expected to remain flat quarter-to-quarter, with occasional spikes due to specific events rather than traditional seasonality.
• Organic Growth vs. Acquisitions: Mid-single-digit organic growth is anticipated, with ongoing evaluations of catalog performance influencing revenue projections.

Overall, Reservoir Media demonstrated strong financial performance in FY26, driven by strategic acquisitions and talent management, while navigating challenges related to rising costs and integration of lower-margin businesses. The outlook for FY27 remains positive, with cautious optimism regarding growth and operational efficiency.