Reservoir Media, Inc. (RSVR, RSVRW Q2 FY2025 earnings call

• Milestones included signing deals with Snoop Dogg, k.d. lang, Jack Douglas, and Billy Strange. • Acquired publishing rights to various catalogs and signed rising talent like Travis Heidelman, Jon Decious, Kes Kamara, and Ben Stanko. • Highlighted sync placements and revenue growth from catalogs such as Harry Belafonte's 'Day-O' and Bobby Pickett's 'Monster Mash'. • Mentioned Sabrina Carpenter's 'Espresso' contributing to Reservoir's market share in the Hot 100.

Music Publishing segment had a 10% increase in revenue to $28.6 million, contributing approximately 70.3% of total revenue ($28.6 million / $40.7 million). Recorded Music segment had a 1% decline in revenue to $10.7 million, contributing approximately 26.3% of total revenue ($10.7 million / $40.7 million).

• Raised and narrowed revenue guidance range to $150 million to $153 million (previously $148 million to $152 million), with midpoint implying almost 5% growth vs fiscal 2024. • Raised adjusted EBITDA guidance range to $59 million to $62 million (previously $58 million to $61 million), signaling almost 9% growth over prior year at midpoint. • Will monitor forecast for second half of year and provide refinements when prudent.

• Discussion of forward-looking statements involves certain risks and uncertainties; no assurance that expectations, beliefs, and projections will be achieved. Refer to earnings press release and SEC filings for specific risks and uncertainties.

Q: Hi, good morning. Thanks for taking my question. I'll start off on Publishing. So margins, I believe, were a record high, at least since you've gone public. That's off a record-high top line, and you also cited the non-recurrence of the legal fee as well as just general improvement in margins. So I want to focus on that last bit. Is that margin improvement that you noted sustainable, or is it also a function of the strong Sync revenue? Just curious about the mix there and the outlook looking forward.

A: Yes. Hi, Griffin. On the margins, those are going to vary slightly based on the revenue mix from quarter-to-quarter. It's also impacted by the types of deals that we close to the extent that we have some deals come in that are, where we've acquired writer share and we're maintaining 100% of that revenue, that can impact the margins positively. But we'll see some slight ups and downs from quarter-to-quarter. It's really based on the mix of the revenue types and the deals that we've closed.

Q: Thanks. Can you talk about some of the factors to win some of the sort of headline highly recognizable deals you did in the quarter like Snoop or k.d. lang? I think a lot of people assume that they'd end up with larger competitors. So sort of what do you think differentiated you in those? And how repeatable is that?

A: I think we have an extraordinarily high-quality creative team, and we have always been able to attract top-tier talent. And I think we will continue to be able to do that. It is a very high-touch person-to-person creative service team that we have focused on building and expanding because we believe that there continues to be value in those relationships. And the value is essentially as we are seeing here to have such high-quality talent join the roster. But that has been the focus of the creative team for years now and will continue to be so as we -- that's really the area where we invest significantly in our people and in the team-building, especially as we see other parts of our business get more and more automated.

Q: Hey, guys. Thanks very much for taking my question. I think you had said part of the reason that Sync revenues were up so much in the quarter was the timing of licenses. Can you give us a little sense of kind of how healthy the Sync business is excluding that sort of onetime item? And just generally speaking, where have you been seeing more demand on the Sync side? Has it been more entertainment or advertising? I think you've mentioned in the past, video games have been a source of strength there. Just curious what you are seeing in that area.

A: Yes. Just with respect to the strong performance in the quarter, we referenced timing because we don't always have control. We frequently do not have control over the timing of those licenses. Opportunities come to us and we execute on the opportunities that make the most sense to us. And we have seen really robust demand in this quarter. We had some great opportunities that came to us. But that's not necessarily indicative of a run rate. Sync is a bit of an up-and-down business, but we have an incredible team that focuses on Sync. And I don't want to downplay the impact that they have on driving this revenue. They do a great job of facilitating these opportunities and taking advantage of them as they come to us. Maybe in terms of the demand, and I'll turn it over to Golnar to address that. As far as the demand goes, I think that there's still -- not that I think that this is the feedback we're getting, there continues to be a hangover on film and TV and that getting back up to pre-strike levels as far as licensing goes. If I look at the quarter and the licenses that were issued, the significant ones continue to be driven by advertising licenses and sprinkled in there with film and trailers. Trailers has always been a source of high-placement syncs for us. We do see that continuing to improve, but it's pretty much the same theme that we saw in the last few quarters, which is that advertising is really driving our performance there.