Reservoir Media wrapped up earnings season on Wednesday (May 28) by announcing that its revenue rose 10% to $41.4 million in the fiscal fourth quarter ended March 31. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a popular measure of profitability, was $18.2 million, up 14%.
“The music industry has a longstanding ability to weather broader macroeconomic headwinds as consumers believe in the value that music brings to their daily lives,” CEO Golnar Khosrowshahi said during the earnings call. “Our top-line growth is a testament to the demand and resiliency of our catalog.”
Music publishing revenue grew 6% to $27.9 million in the quarter. Digital, publishing’s largest revenue stream, rose 5% to $13.6 million. Sync revenue jumped 51% to $5.5 million due primarily to the timing of licenses. Performance revenue dropped 13% to $6.5 million and mechanical royalties fell 6% to $1.2 million.
Recorded music revenue improved 7% to $12.0 million. Digital revenue jumped 19% to $8.8 million due mainly to price increases and subscriber growth at subscription platforms. Direct affiliations with collection societies helped neighboring rights rise 15% to $1.1 million. Physical sales fell 26% to $1.3 million due to a lighter release schedule. Sync revenue fell 29% to $700,000 due to the timing of licenses.
Full-year revenue of $158.7 million beat the high end of the guidance range of $155 million to $158 million. Adjusted EBITDA of $65.7 million also topped the high end of the guidance range of $64.5 million.
“Reservoir had a standout fiscal year, capitalizing on our opportunities to boost our organic revenue,” said CFO Jim Hindlmeyer. “Thanks to our value enhancement team, the deals we closed this year were substantial and delivered notable value to the company, and profitability was further aided by our internal efforts to control costs.”
In a busy year for signings, Reservoir Media inked songwriting deals with Snoop Dogg and Death Row Records, k.d. lang, Travis Heidelman and Aaron Zuckerman, among others. It also acquired the publishing catalog of Lebo M, Lastrada Entertainment, Big D Evans and Billy Strange, and purchased the produce royalties of Jack Douglas (Aerosmith, Cheap Trick).
While Reservoir Media has a roster of Western songwriters and recording artists, the company also focuses on emerging markets. This month, Reservoir Media announced its PopIndia subsidiary acquired the publishing and master rights of Musicraft Entertainment, which spans decades of Indian music. Khosrowshahi described the growth rate of India’s music business as “pretty significant given both the size of the population and the opportunity for the number of people to become streamers of music.”
Guidance for fiscal 2026 is revenue of $164 million to $169 million, which at the midpoint would result in 5% annual growth. Adjusted EBITDA guidance of $68 million to $72 million represents 7% growth at the midpoint.
Reservoir Media shares fell as much as 8.4% Wednesday morning but recovered to $7.69, down 1.4%, by early afternoon. The share price jumped 7.9% on Tuesday (May 27) on heavier than average trading volume.
