Reservoir Media, Inc. (NASDAQ: RSVR) Q4 2025 Earnings Call | 05/28/2025

Reservoir Media, Inc. Reports Strong Fiscal Year 2025 Performance Driven by Acquisitions and Organic Growth

Reservoir Media, Inc. (NASDAQ: RSVR), an independent music company, announced its financial results for the fourth quarter and full fiscal year 2025, ended March 31, 2025. The company exceeded its guidance and expectations, showcasing robust top-line growth, improved profitability, and significant strategic capital deployment, primarily through off-market M&A.

Fiscal Year 2025 (Full Year) Highlights:

• Revenue: Reached $158.7 million, a 10% year-over-year increase, surpassing the top end of previous guidance. This growth was fueled by both the music publishing segment (up 12%) and the recorded music segment (up 4%).
• Adjusted EBITDA: Grew by 18% to $65.7 million, reflecting higher gross margins and improved operating leverage.
• Net Income: Significantly increased to $7.7 million compared to $800,000 in fiscal 2024, resulting in diluted earnings per share of $0.12 (up from $0.01).
• Capital Deployment: Deployed over $115 million towards acquisitions and advances, demonstrating a commitment to strategic portfolio expansion.
• Liquidity: Ended the year with strong liquidity of $79.6 million, comprising $21.4 million cash on hand and $58.2 million available under its revolver, to fund strategic objectives. Net debt was $366.7 million.

Q4 2025 Performance:

• Revenue: $41.4 million, a 6% increase compared to Q4 fiscal 2024, with growth in both music publishing (6%) and recorded music (7%).
• Adjusted EBITDA: Increased 14% to $18.2 million, driven by stronger revenue and improved margins, particularly in synchronization within publishing and digital within recorded music.
• Net Income: $2.7 million, slightly down from $2.9 million in Q4 2024, resulting in diluted earnings per share of $0.04.

Strategic Growth Drivers:

Reservoir's growth strategy centers on strategic M&A and robust organic growth initiatives.

• Off-Market M&A: Continued to be a key growth driver, with notable publishing deals including catalogs from Snoop Dogg and k.d. lang. Acquisitions like La Strada Entertainment's publishing catalog (over 5,600 compositions, including hits sampled by Tupac and Mariah Carey) and New State's recorded music catalog (over 13,000 tracks) significantly diversified and expanded the portfolio.
• Organic Growth & Value Enhancement:
  • Secured four Super Bowl sync placements in Q4.
  • Evergreen hit "Day-O" by Harry Belafonte prominently featured in "Beetlejuice, Beetlejuice," driving a resurgence in listenership.
  • Active songwriters contributed to chart-topping records by artists like Sabrina Carpenter and SZA, earning Reservoir a top 10 U.S. market share in the last four quarters according to Billboard's Publishers Quarterly.
• Emerging Markets Expansion:
  • Continued focus on the Middle East through its subsidiary, Pop Arabia, building relationships with influential creators and securing off-market deals, such as acquiring Egyptian star Omar Kamal's catalog.
  • Launched Pop India, a new subsidiary with an office in Mumbai, focused on signing and developing regional talent and acquiring catalogs across publishing and recorded music. Signed first publishing deal with artist Yohani, capitalizing on India's rapidly growing music streaming market.

Fiscal Year 2026 Guidance:

• Revenue: Expected to be in the range of $164 million to $169 million.
• Adjusted EBITDA: Projected to be in the range of $68 million to $72 million.

The company maintains a strong pipeline of potential acquisitions and is in a solid financial position to continue executing on high-ROI transactions. Reservoir is confident in its ability to drive organic growth from its existing catalog and, with its long-term strategy rooted in scale-building M&A and value-additive signings, it is well-positioned for continued outperformance in fiscal year 2026 and beyond.