Reservoir Media, Inc. Q2 FY2026 earnings call

• Growth Strategy: Leveraged diverse high-quality catalog, strategic signings, and global diversification. Achieved 12% top-line growth with 7% organic and 5% from acquisitions.
• Key Acquisitions: Acquired Miles Davis' publishing catalog, rights to recorded music, and name and likeness; extended Nick Drake's publishing deal and added Molly Drake's catalog; acquired catalogs of HFM Production, Essa Almarzoug, Emily Reid, Dave Pittenger, and Bobby Vinton.
• Sync Revenue: Year-over-year growth in sync revenue with placements in media like 'Summer I Turn Pretty', Netflix series, and feature films; granted option for 'Monster Mash' to be adapted into an animated film.
• Artist Collaborations: Reservoir's roster contributed to highly anticipated albums and streamed songs, including Morgan Wallen's 'I'm the Problem', 2 Chainz's hits, Cardi B's '#1 top 200 album', and Tyler, The Creator's '#1' albums.

Music Publishing: Revenue was $30.9 million, an 8% increase year-over-year. This was driven by a 47% increase in performance revenue due to hit songs, mechanical revenue from physical sales, and digital revenue, but offset by a decrease in publishing synchronization revenue due to timing of licenses. Recorded Music: Revenue was $13 million, a 21% increase year-over-year. Primarily due to a 20% increase in digital revenue from catalog acquisitions and growth at music streaming services, and an increase in synchronization revenue from timing of licenses.

• Increased and narrowed revenue guidance range from $164 million to $169 million to $167 million to $170 million, with midpoint implying 6% growth vs fiscal 2025.
• Adjusted EBITDA guidance range narrowed from $68 million to $72 million to $70 million to $72 million, signaling 8% growth over prior year at midpoint. Will monitor and refine guidance for second half of fiscal year 2026.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ from expectations. Refer to Reservoir Media's earnings press release and SEC filings for specific risks, uncertainties, and other factors that could materially affect results.

Q: Strong organic growth, any context on what's driving it and comparison to broader industry?

A: 7% organic growth is due to industry tailwinds and expected growth. We work to maximize acquired assets, but factors like prior year hit songs coming down also play a role. We aim to do better than the industry.

Q: Was Miles Davis acquisition part of the over $1 billion pipeline? Any dynamics?

A: Miles Davis was included in the pipeline. It wasn't off-market; a formal process with the estate started in November 2023.

Q: Impact of Miles Davis centennial events on OpEx?

A: No impact on administration. Marketing resources are reallocated internally to focus on these initiatives, handled by internal teams.

Q: G&A trends and modeling for the rest of the year?

A: G&A changes are driven by management business revenue. We expect the run rate to be around Q2 for the balance of the year, with minor pushes/pulls but nothing significant on other segments.

Q: How is organic growth a mix of industry and internal efforts?

A: It's a mix of industry subscriber growth, price increases, and internal initiatives to increase value on acquired catalogs. Examples like the 'Monster Mash' animated film adaptation show internal efforts to boost catalog revenue.