Reservoir Media’s Earnings Call: Strong Growth and Strategic Acquisitions

Reservoir Media, Inc. ((RSVR)) has held its Q4 earnings call. Read on for the main highlights of the call.

Reservoir Media’s latest earnings call revealed a generally positive sentiment, as the company reported strong financial performance for fiscal 2025. The company exceeded revenue and EBITDA expectations, successfully deployed capital for strategic acquisitions, and expanded its international presence. Despite facing challenges such as declines in physical and performance revenue and increased interest expenses, the positive achievements and strategic growth initiatives were emphasized as outweighing the negatives.

Exceeding Fiscal 2025 Expectations

Reservoir Media surpassed both its guidance and expectations for fiscal 2025, achieving a 10% increase in top-line annual revenue and an 18% improvement in adjusted EBITDA. This performance underscores the company’s robust financial health and effective management strategies.

Significant Capital Deployment

The company strategically deployed over $115 million towards acquisitions and advances, securing notable publishing deals with high-profile artists such as Snoop Dogg and k.d. lang. These investments are expected to enhance Reservoir Media’s portfolio and drive future growth.

Expansion and International Growth

Reservoir Media’s international expansion was highlighted by the launch of PopIndia and the acquisition of Omar Kamal’s catalog. These moves demonstrate the company’s strategic focus on emerging markets and its commitment to broadening its global footprint.

Strong Fourth Quarter Performance

In the fourth quarter, Reservoir Media reported a 6% increase in revenue to $41.4 million, with a 14% rise in adjusted EBITDA to $18.2 million. This growth was driven by gains in synchronization and digital segments, showcasing the company’s ability to capitalize on evolving market trends.

Full Year Record Results

For fiscal 2025, Reservoir Media achieved record results with revenue reaching $158.7 million, marking a 10% year-over-year increase. The company also reported a 24% increase in OIBDA and an 18% rise in adjusted EBITDA, reflecting its strong operational performance.

Physical Revenue Decline

The company experienced a 26% decline in physical revenue during the fourth quarter, attributed to a lighter planned release schedule compared to the previous year. This decline highlights the ongoing challenges in the physical music market.

Performance Revenue Decrease

Performance revenue in the Music Publishing segment decreased by 13% year-over-year in the fourth quarter. This decline indicates potential challenges in this segment that the company may need to address moving forward.

Increased Interest Expense

Interest expenses rose to $6.1 million in the fourth quarter, up from $5.2 million the previous year, due to increased debt from acquisitions. This increase in expenses is a factor the company will need to manage as it continues its growth strategy.

Forward-Looking Guidance

Looking ahead, Reservoir Media projects fiscal 2026 revenue to be between $164 million and $169 million, with adjusted EBITDA expected to range from $68 million to $72 million. The company plans to leverage a strong pipeline of potential acquisitions and continued organic growth efforts to achieve these targets.

In summary, Reservoir Media’s earnings call highlighted a successful fiscal 2025, with significant achievements in revenue growth, strategic acquisitions, and international expansion. Despite facing some challenges, the company’s forward-looking guidance suggests continued optimism and strategic focus on growth opportunities.