Reservoir Media, Inc. (RSVR, RSVRW Q3 FY2025 earnings call

• Reservoir posted strong third quarter results with total revenue of $42.3 million, a 19% improvement over the prior year, driven by 16% growth in music publishing and 20% growth in recorded music.
• Adjusted EBITDA was $17.3 million, a 26% improvement from the year-ago quarter.
• Deployed over $70 million across catalog acquisitions year-to-date, including the acquisition of Lebo M's catalog and Lastrada Entertainment's publishing catalog.
• Cultivated the active roster, including extending the deal with Serban Cazan, and Reservoir talent contributed to Grammy wins across the roster.

Music Publishing revenue increased 16% year-over-year to $26.9 million, driven by revenue growth from the existing catalog, price increases at multiple music streaming services, and mechanical royalties. Recorded music revenue increased by 20% year-over-year to $12 million, stemming from a royalty recovery, continued music streaming growth, and price increases at multiple music streaming services, though partially offset by a modest decline in neighboring rights revenue.

• Raised full-year revenue guidance range from $150 million to $153 million to $155 million to $158 million, with midpoint implying 8% growth vs fiscal 2024.
• Raised adjusted EBITDA guidance range from $59 million to $62 million to $61.5 million to $64.5 million, signaling over 13% growth at the midpoint over prior year.

• Forward-looking statements involve risks and uncertainties where actual results may differ materially from expectations, beliefs, and projections.

Q: Griffin Boss asked about OpEx, catalog acquisitions pipeline, and Spotify Universal deal.

A: Jim Heindlmeyer noted OpEx related to management revenue increasing with higher revenue; Golnar Khosrowshahi stated the pipeline remains robust and she's optimistic about the Spotify deal terms.

Q: Richard Baldry inquired about one-time impacts in 3Q, neighboring rights, hedging, and deal pipeline.

A: Jim Heindlmeyer discussed royalty recovery being a positive ongoing driver and neighboring rights variability; he also mentioned $150 million of debt hedged through December 2027; Golnar Khosrowshahi stated the deal pipeline remains robust with high-quality assets.

Q: Alex Fuhrman asked about organic revenue growth and royalty recovery.

A: Jim Heindlmeyer explained the royalty recovery from an audit positively impacted organic growth and broader organic revenue growth is driven by sync and marketing efforts.