Reservoir Media generated revenues of $31.8 million across recorded music and music publishing in the three months to end of June.
That revenue figure, which was up 31% YoY, was disclosed in an SEC filing published on Wednesday (August 2), showing the company’s financial results for calendar Q2 2023 (first fiscal quarter of 2024) ended June 30, 2023.
New York-based Reservoir trades on the NASDAQ. The company floated via a merger with a SPAC in July 2021.
On an organic basis (i.e. discounting acquisitions), Reservoir says that its overall revenues grew by 21% in the three months to end of June.
The increase was primarily driven by strong growth in both the recorded music and music publishing segments, highlighted by 37% growth in the Recorded Music segment, inclusive of the acquisitions of various catalogs.
Recorded Music
Reservoir’s Recorded Music revenues in the first quarter of fiscal 2024 reached $10.4 million, an increase of 37% compared to $7.6 million in the prior year quarter.
Reservoir notes that this growth was largely driven by strong Digital, Physical, and Neighboring Rights revenue, partially offset by Synchronization revenue declines.
Within Recorded Music, physical revenues soared 176% YoY to $3.6 million in calendar Q2, while digital revenues increased 23% YoY to $5.6 million.
Sync revenues fell 68% YoY, from $1 million in calendar Q2 2022 to $300,000 in calendar Q2 2023.
In calendar Q2 (Reservoir’s fiscal Q1 2024), Recorded Music OIBDA (Operating Income Before Depreciation & Amortization) increased 18%, to $3.5 million, compared to $3 million in the prior year quarter.
Recorded Music OIBDA margin in the first quarter decreased from 39% to 34%. Reservoir reports that the decrease in Recorded Music OIBDA margin was driven by higher Physical revenues which carry higher costs partially offset by improved operating leverage in the segment.
Music Publishing
Reservoir reports that its Music Publishing revenues reached $20.8 million in its first quarter of fiscal 2024 (calendar Q2, 2023), representing an increase of 26% YOY compared to $16.4 million in the prior year quarter.
Reservoir notes that growth in its music publishing segment was driven by strong performance in Digital and Performance revenues and that strong growth in Digital revenue was largely driven by the increase in rates as the most recent period was subject to CRB IV rates, while the first quarter of fiscal 2023 was subject to CRB II rates.
Within Reservoir’s Publishing segment, revenues from digital sources grew 41% YoY from $8.5 million in calendar Q2 2022 to $11.9 million in calendar Q2 2023 (see below).
Performance revenues grew 28% YoY to $4.5 million.
In calendar Q2, (Reservoir’s fiscal Q1 2024), Music Publishing OIBDA increased 54% to $5.7 million, compared to $3.7 million in the three months to end of June last year. Music Publishing OIBDA margin in the first quarter increased from 23% to 27%.
Elsewhere in Reservoir’s latest SEC filing, the company reports that its operating income in calendar Q2 was $3.1 million compared to operating income of $1.3 million in calendar Q2, 2022.
OIBDA in calendar Q2 increased 38% to $9.2 million, compared to $6.7 million in the prior year quarter.
Adjusted EBITDA in calendar Q2 increased 36% to $10.1 million, compared to $7.4 million last year.
The company points to other recent highlights including catalog deals for music by the likes of legendary R&B and pop vocal group The Spinners, multi-platinum writer-producer Willy Will Yanez, and rock artist and songwriter Greg Kihn.
Reservoir also notes that it signed publishing deals with Paul Cauthen and Jonah Summerfield.
“The power of consuming music through streaming platforms globally continues to grow in size and value, and our roster of artists and creators are well-positioned to benefit from these trends.”
Golnar Khosrowshahi, Reservoir Media
Commenting on the company’s results, Golnar Khosrowshahi, Founder and Chief Executive Officer of Reservoir Media, said: “We had a very strong first quarter of fiscal 2024, which demonstrates the strength of our business model and reflects the momentum we are seeing in both Music Publishing and Recorded Music.
“The power of consuming music through streaming platforms globally continues to grow in size and value, and our roster of artists and creators are well-positioned to benefit from these trends.
Added Khosrowshahi: “We continue to take a disciplined approach to capital deployment to support growth while our value enhancement teams ensure that our artists’ work is broadly consumed and successfully monetized across the music ecosystem.
“Looking ahead, we remain steadfast in our approach of identifying and executing on deals that provide top-line growth and margin accretion to create value for all stakeholders.”
“We are pleased with the top-line growth of our business during the quarter and are encouraged by the durability of our financial profile.”
Jim Heindlmeyer, Reservoir
Jim Heindlmeyer, Chief Financial Officer of Reservoir, added: “We are pleased with the top-line growth of our business during the quarter and are encouraged by the durability of our financial profile.
“Our OIBDA and Adjusted EBITDA margin expansion during the quarter is a testament to the operating leverage embedded in our business. As a result of our strong first quarter performance, we are maintaining Revenue and Adjusted EBITDA guidance for fiscal 2024.”Music Business Worldwide
