Reservoir reports double-digit revenue jump in latest fiscal year, to $144.9m

Music rights company Reservoir Media has reported a large jump in revenue in the latest quarter and for its recently-ended fiscal year, but is forecasting more subdued growth for the year ahead.

The New York-headquartered company reported $144.86 million in revenue for its fiscal 2024, which ended on March 31, 2024. That equates to a 14% YoY increase on an organic basis, or an 18% YoY jump when including acquisitions over the course of the year.

Reservoir’s operating income jumped 17% YoY, to $24.58 million, while adjusted EBITDA rose 20% YoY to $55.6 million.

Both the revenue and adjusted EBITDA numbers slightly exceeded the company’s most recent forecast for the fiscal year, released in February.

The company reported earnings per diluted share of $0.01, down from $0.04 in the previous fiscal year.

“The year-over-year decline in net income was largely due to loss on fair value of interest rate swaps, $2.7 million for the write-off of recoupable legal expenses and attorneys’ fees, and increased interest expense, but was partially offset by a decrease in income tax expense and improved operating income,” the company said in a statement to investors.

In comments to investors, Reservoir Founder and CEO Golnar Khosrowshahi stressed the company’s numerous acquisitions over the past year, which included a publishing deal with Lebanese ‘Queen of Pop’ Nancy Ajram; a deal with Joe Walsh of Eagles fame, which includes hits from his solo catalog, as well as works with bands like the Eagles and the James Gang; and a deal for the catalog of Latin hitmaker Rudy Perez, which includes songs he wrote or co-wrote for the likes of Christina Aguilera and Julio Iglesias.

“The broad reach of our assets, combined with our value enhancement across platforms, allows us to continue building upon our success as a leading independent music company,” Khosrowshahi said.

“We are entering fiscal year 2025 with a strong financial foundation and a robust portfolio of assets, with a focus on driving organic growth and capitalizing on the changing landscape and projected growth of the music industry.”

Golnar Khosrowshahi, Reservoir

“We are entering fiscal year 2025 with a strong financial foundation and a robust portfolio of assets, with a focus on driving organic growth and capitalizing on the changing landscape and projected growth of the music industry,” she continued.

“We will continue to make investments in artificial intelligence and machine learning to support a deeper understanding of our data and usage trends to better capture additional revenue and improve marketing and licensing efficiencies across our organization. We will continue to partner with our roster of award-winning creators to bring their bodies of work to listeners around the world and look forward to playing an important role in the future of music.”

The company issued guidance for fiscal 2025, aiming for revenue of $148 million-$152 million, which would be a 4% YoY increase at the mid-point, and adjusted EBITDA of $58 million-$61 million, up 7% at the mid-point.

“The 2024 fiscal year was remarkable for Reservoir, highlighted by multiple unique opportunities to drive organic revenue generation through our value enhancement efforts,” CFO Jim Heindlmeyer said.

“We executed several immediately accretive deals, while exercising prudent cost management despite an inflationary environment. For the 2025 fiscal year we expect to deliver record performance again.”

calendar Q1 results

For fiscal Q4 (calendar Q1), Reservoir reported revenues of $39.15 million, an 8% YoY increase organically, or 12% YoY including acquisitions.

Operating income came in at $8.76 million, up 2% YoY, while adjusted EBITDA rose 6% YoY to $16.0 million.

The company reported earnings per diluted share of $0.04 for the quarter, unchanged from the same period a year earlier.

Music publishing revenue came in at $26.4 million in the quarter, up 14% YoY. Of that, digital accounted for $13.0 million (up 11% YoY), and performance accounted for $7.5 million (up 73% YoY).

Operating income from publishing rose 1% to $4.3 million.

“The increase in revenue was largely driven by higher performance and digital revenue types, partially offset by lower synchronization, mechanical and other revenue,” Reservoir said.

On the recorded music side, Reservoir reported revenue of $11.2 million, up 3% YoY. Of that, digital accounted for $7.4 million (up 9% YoY), while physical revenue dropped 34% YoY to $1.8 million.

“Growth in both [fiscal Q4 and FY 2024] was driven by strong results within digital revenue as streaming across platforms globally continues to be a tailwind, offset by a weaker fourth quarter in physical revenue,” Reservoir said.Music Business Worldwide