Core Insights - Reservoir Media reported Q1 FY2026 results with GAAP revenue of $37.2 million, an 8% increase year-over-year, but below analyst expectations of $38.065 million [1][5] - The company experienced an increase in operating income and adjusted EBITDA, while net loss widened to $0.6 million from $0.5 million in Q1 FY2025 [1][6] Financial Performance - GAAP revenue for Q1 FY2026 was $37.2 million, up 8% from $34.3 million in Q1 FY2025 [2] - Operating income increased by 8% to $5.4 million, while adjusted EBITDA rose 10% to $13.9 million [2][5] - Net loss (GAAP) increased to $0.6 million, reflecting a 20% rise compared to the previous year [2][6] Business Strategy - Reservoir Media focuses on acquiring, managing, and monetizing music catalogs, serving as both a music publisher and recorded music rights holder [3] - The company emphasizes five strategic areas for growth: aggressive acquisition of music rights, investment in digital and streaming growth, expansion in emerging markets, rigorous protection of music rights, and leveraging an experienced management team [4] Segment Performance - The Music Publishing segment generated $24.9 million in GAAP revenue, a 4% increase, with synchronization licensing revenue surging 48% to $4.2 million [7] - The Recorded Music segment saw an 8% revenue growth to $10.4 million, with digital revenue increasing by 23% [8][11] Catalog and Digital Rights - During the quarter, Reservoir Media acquired master rights for five artists and invested in a London-based immersive entertainment company [10] - Digital sales in Recorded Music rose by 23% to $8.0 million, while digital revenue in Music Publishing declined by 2% [11] International Expansion - The company is prioritizing expansion into international markets, particularly in India and the Middle East, with previous announcements of new subsidiaries [12] Financial Outlook - Management targets FY2026 revenue between $164 million and $169 million, indicating a conservative growth outlook [14] - Total liquidity improved to $173 million, while net debt increased to $372.5 million [15]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I.%20Financial%20Information) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Reservoir Media, Inc [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Reservoir Media, Inc. and its subsidiaries for the three months ended June 30, 2025 and 2024, including statements of loss, comprehensive income (loss), balance sheets, changes in shareholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items [Condensed Consolidated Statements of Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss) This statement details the company's revenues, costs, operating income, and net loss for the specified periods Condensed Consolidated Statements of Loss | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $37,164,293 | $34,316,843 | | Total costs and expenses | $31,717,599 | $29,355,310 | | Operating income | $5,446,694 | $4,961,533 | | Interest expense | $(6,295,958) | $(5,059,398) | | Net loss | $(643,725) | $(453,177) | | Net loss attributable to Reservoir Media, Inc. | $(555,659) | $(346,655) | | Basic Loss per common share | $(0.01) | $(0.01) | | Diluted Loss per common share | $(0.01) | $(0.01) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents the net loss and other comprehensive income (loss) components, including translation adjustments Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | Net loss | $(643,725) | $(453,177) | | Translation adjustments | $4,052,168 | $34,852 | | Total comprehensive income (loss) | $3,408,443 | $(418,325) | | Total comprehensive income (loss) attributable to Reservoir Media, Inc. | $3,496,509 | $(311,803) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific dates Condensed Consolidated Balance Sheets | Metric | June 30, 2025 ($) | March 31, 2025 ($) | | :------------------------------------ | :-------------- | :------------- | | Total current assets | $69,472,071 | $79,284,295 | | Intangible assets, net | $721,795,939 | $719,673,219 | | Total assets | $856,976,183 | $865,127,010 | | Total current liabilities | $53,702,656 | $65,837,252 | | Secured line of credit | $387,367,065 | $388,134,754 | | Total liabilities | $486,867,682 | $498,927,228 | | Total shareholders' equity | $370,108,501 | $366,199,782 | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This statement outlines the changes in common stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income (loss) Condensed Consolidated Statements of Changes in Shareholders' Equity | Metric | June 30, 2025 ($) | March 31, 2025 ($) | | :-------------------------------------------------------------------------------- | :------------ | :------------- | | Common Stock Shares Outstanding | 65,491,183 | 65,239,735 | | Common Stock Amount | $6,550 | $6,524 | | Additional paid-in capital | $344,646,039 | $344,145,789 | | Retained earnings | $22,591,911 | $23,147,570 | | Accumulated other comprehensive income (loss) | $1,630,061 | $(2,422,107) | | Total Reservoir Media, Inc. shareholders' equity | $368,874,561 | $364,877,776 | | Total shareholders' equity | $370,108,501 | $366,199,782 | - Shareholders' equity increased by **$3,908,719** from March 31, 2025, to June 30, 2025, primarily due to other comprehensive income of **$4,052,168**, partially offset by a net loss of **$555,659** attributable to Reservoir Media, Inc[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $6,014,143 | $8,555,704 | | Net cash used for investing activities | $(9,659,342) | $(1,898,661) | | Net cash used for financing activities | $(2,509,368) | $(8,414,724) | | Decrease in cash and cash equivalents | $(6,528,996) | $(1,773,509) | | Cash and cash equivalents end of period | $14,857,144 | $16,358,506 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, segment information, and specific financial statement line items - The Company operates in two reportable segments: Music Publishing and Recorded Music, involving the acquisition and management of music catalogs and artist agreements[22](index=22&type=chunk) - Revenue recognition for both segments is based on legally enforceable rights and obligations, identifying performance obligations, and recognizing revenue when control of services/goods is transferred, with royalty revenue recognized upon sale or usage[29](index=29&type=chunk) Revenue by Type (Three Months Ended June 30) | Revenue by Type | 2025 ($) | 2024 ($) | | :---------------------- | :----------- | :----------- | | **Music Publishing** | | | | Digital | $14,310,164 | $14,634,703 | | Performance | $4,784,639 | $5,134,426 | | Synchronization | $4,153,411 | $2,811,017 | | Mechanical | $621,622 | $668,973 | | Other | $1,063,630 | $751,174 | | **Total Music Publishing** | **$24,933,466** | **$24,000,293** | | **Recorded Music** | | | | Digital | $8,035,214 | $6,558,170 | | Physical | $1,071,879 | $1,352,341 | | Neighboring rights | $1,072,507 | $1,106,350 | | Synchronization | $264,723 | $613,643 | | **Total Recorded Music** | **$10,444,323** | **$9,630,504** | | Other revenue | $1,786,504 | $686,046 | | **Total revenue** | **$37,164,293** | **$34,316,843** | - The Company completed acquisitions totaling **$3,791,366** in Q2 2025, significantly higher than **$801,315** in Q2 2024, primarily for publishing and recorded music catalogs[34](index=34&type=chunk) Intangible Assets (Net) | Intangible Assets | June 30, 2025 ($) | March 31, 2025 ($) | | :------------------------------------ | :-------------- | :------------- | | Publishing and recorded music catalogs | $885,775,201 | $875,475,723 | | Artist management contracts | $989,087 | $933,733 | | Gross intangible assets | $886,764,288 | $876,409,456 | | Accumulated amortization | $(164,968,349) | $(156,736,237) | | Intangible assets, net | $721,795,939 | $719,673,219 | - Amortization expense for intangible assets increased by **14.8% YoY** to **$7,262,026** for the three months ended June 30, 2025, from **$6,326,863** in the prior year[35](index=35&type=chunk) - The Senior Credit Facility was amended on June 3, 2025, increasing the revolving credit commitment from **$450 million** to **$550 million** and resetting the incremental borrowing capacity to **$150 million**[40](index=40&type=chunk) Interest Rate Swaps Outstanding (June 30, 2025) | Effective Date | Notional Amount at June 30, 2025 ($) | Pay Fixed Rate Maturity | | :--------------- | :------------------------------- | :---------------------- | | September 30, 2024 | $100,000,000 | 2.946% December 2027 | | September 30, 2024 | $50,000,000 | 3.961% December 2027 | - Income tax benefit decreased to **$271,066** (**29.6%** effective tax rate) for Q2 2025 from **$293,968** (**39.3%** effective tax rate) for Q2 2024, reflecting changes in loss before income taxes and the mix of income from multiple tax jurisdictions[46](index=46&type=chunk)[103](index=103&type=chunk) - Share-based compensation expense decreased by **11% YoY** to **$1,133,552** for Q2 2025 from **$1,273,674** for Q2 2024[52](index=52&type=chunk) - The Company had **65,369,891** basic and diluted weighted average common shares outstanding for Q2 2025[55](index=55&type=chunk) - The Company is exposed to credit risk, interest rate risk (partially hedged by swaps), and foreign exchange risk[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - The Company's CODM evaluates segment performance based on Operating Income Before Depreciation and Amortization (OIBDA)[61](index=61&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed analysis of Reservoir Media, Inc.'s financial performance and condition for the three months ended June 30, 2025, compared to the same period in 2024, covering revenue trends, cost structures, operating income, and non-GAAP financial measures, along with an assessment of liquidity and capital resources, highlighting key drivers of changes in financial results and future outlook [Business Overview](index=22&type=section&id=Business%20Overview) This section describes Reservoir Media, Inc.'s operational structure, including its Music Publishing and Recorded Music segments - Reservoir Media, Inc. operates as an independent music company with two primary reportable segments: Music Publishing and Recorded Music, in addition to a management business and a rights management entity in the Middle East[68](index=68&type=chunk)[69](index=69&type=chunk) - The Music Publishing segment generates revenue from five main sources: Digital, Performance, Synchronization, Mechanical, and Other, by acquiring interests in music catalogs and signing songwriters[70](index=70&type=chunk)[75](index=75&type=chunk) - The Recorded Music segment focuses on acquiring sound recording catalogs, discovering and developing artists, and marketing/distributing music, with revenues from Digital, Physical, Neighboring Rights, and Synchronization[73](index=73&type=chunk)[79](index=79&type=chunk) [Use of Non-GAAP Financial Measures](index=26&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section explains the company's use of non-GAAP financial measures like OIBDA and Adjusted EBITDA for performance evaluation - The Company uses non-GAAP financial measures such as OIBDA, OIBDA Margin, EBITDA, and Adjusted EBITDA to evaluate operations and performance, providing additional insights beyond U.S. GAAP measures[107](index=107&type=chunk) - OIBDA (Operating Income Before Depreciation and Amortization) is considered an important indicator of operational strengths, while Adjusted EBITDA further excludes non-cash charges, foreign exchange gains/losses, interest rate swap losses, equity-based compensation, and unusual items[108](index=108&type=chunk)[109](index=109&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes the company's consolidated financial performance, including revenue, expenses, and net loss, for the reporting period Consolidated Income Statement Summary (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | $ Change (in thousands) | % Change | | :-------------------------------- | :-------------------- | :-------------------- | :------- | :------- | | Revenues | $37,164 | $34,317 | $2,847 | 8% | | Total costs and expenses | $31,718 | $29,355 | $2,362 | 8% | | Operating income | $5,447 | $4,962 | $485 | 10% | | Interest expense | $(6,296) | $(5,059) | $(1,237) | 24% | | Gain (loss) on foreign exchange | $1,095 | $(59) | $1,155 | NM | | Loss on fair value of swaps | $(997) | $(490) | $(507) | 103% | | Net loss attributable to Reservoir Media, Inc. | $(556) | $(347) | $(209) | 60% | - Total revenues increased by **8% YoY** to **$37.16 million**, driven by a **4%** increase in Music Publishing and an **8%** increase in Recorded Music revenues[82](index=82&type=chunk) - Music Publishing revenues increased by **$933 thousand** (**4%**), primarily due to a **$1,342 thousand** increase in synchronization revenue and a **$312 thousand** increase in other revenue, partially offset by decreases in performance and digital revenue[84](index=84&type=chunk) - Recorded Music revenues increased by **$814 thousand** (**8%**), mainly due to a **$1,477 thousand** increase in digital revenue from catalog acquisitions and streaming growth, partially offset by decreases in synchronization and physical revenue[86](index=86&type=chunk) - Cost of revenue decreased by **1% YoY** to **$13.19 million**, primarily due to a decrease in writer royalties and other publishing costs, despite an increase in artist royalties and other recorded music costs[88](index=88&type=chunk) - Amortization and depreciation expense increased by **15% YoY** to **$7.31 million**, mainly due to the acquisition of additional music catalogs[91](index=91&type=chunk) - Total administration expenses increased by **16% YoY** to **$11.21 million**, driven by increases in Other administration expenses (**151%**), Music Publishing (**5%**), and Recorded Music (**12%**) segments, reflecting inflation and investments[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - Operating income increased by **10% YoY** to **$5.45 million**, with the operating income margin rising to **15%** from **14%**, due to increased revenues and a lower cost of revenue as a percentage of revenues[97](index=97&type=chunk) - Interest expense increased by **24% YoY** to **$6.30 million**, primarily due to higher debt balances from catalog acquisitions and increased effective interest rates on hedged borrowings[98](index=98&type=chunk) - The Company reported a net loss of **$644 thousand** for Q2 2025, an increase from **$453 thousand** in Q2 2024, mainly due to higher interest expense and loss on fair value of swaps, partially offset by improved foreign exchange results and operating income[105](index=105&type=chunk) [Non-GAAP Reconciliations](index=32&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations of non-GAAP financial measures, such as OIBDA and Adjusted EBITDA, to their most directly comparable GAAP measures Consolidated OIBDA (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | $ Change (in thousands) | % Change | | :------------------------ | :-------------------- | :-------------------- | :------- | :------- | | Revenues | $37,164 | $34,317 | $2,847 | 8% | | Cost of revenue | $13,193 | $13,281 | $(88) | (1)% | | Administration expenses | $11,211 | $9,689 | $1,522 | 16% | | OIBDA | $12,760 | $11,346 | $1,414 | 12% | | OIBDA Margin | 34% | 33% | | | - Consolidated OIBDA increased by **12% YoY** to **$12.76 million**, with OIBDA Margin rising to **34%** from **33%**, driven by increases in both Music Publishing OIBDA (**12%**) and Recorded Music OIBDA (**9%**)[112](index=112&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) Adjusted EBITDA Reconciliation (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | $ Change (in thousands) | % Change | | :------------------------------ | :-------------------- | :-------------------- | :------- | :------- | | Net loss | $(644) | $(453) | $(191) | 42% | | Income tax benefit | $(271) | $(294) | $23 | (8)% | | Interest expense | $6,296 | $5,059 | $1,237 | 24% | | Amortization and depreciation | $7,314 | $6,385 | $929 | 15% | | EBITDA | $12,695 | $10,697 | $1,998 | 19% | | (Gain) loss on foreign exchange | $(1,095) | $59 | $(1,155) | NM | | Loss on fair value of swaps | $997 | $490 | $507 | 103% | | Non-cash share-based compensation | $1,134 | $1,274 | $(140) | (11)% | | Other (income) expense, net | $164 | $100 | $64 | 64% | | Adjusted EBITDA | $13,895 | $12,620 | $1,274 | 10% | - Adjusted EBITDA increased by **10% YoY** to **$13.90 million**, primarily due to increased revenues, partially offset by higher administration expenses[116](index=116&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to generate and manage cash flows, including debt levels, borrowing capacity, and compliance with financial covenants - As of June 30, 2025, the Company had **$387.37 million** in debt (net of deferred financing costs) and **$14.86 million** in cash and cash equivalents[117](index=117&type=chunk) Cash Flow Summary (Three Months Ended June 30) | Cash Flow Activity | 2025 ($ in thousands) | 2024 ($ in thousands) | $ Change (in thousands) | % Change | | :------------------------ | :-------------------- | :-------------------- | :------- | :------- | | Operating activities | $6,014 | $8,556 | $(2,542) | (30)% | | Investing activities | $(9,659) | $(1,899) | $(7,760) | NM | | Financing activities | $(2,509) | $(8,415) | $5,906 | (70)% | - Cash provided by operating activities decreased by **30% YoY** to **$6.01 million**, mainly due to cash used for working capital, particularly timing of royalty payments and advance recoupments[121](index=121&type=chunk) - Cash used for investing activities significantly increased by **$7.76 million** to **$9.66 million**, primarily driven by higher acquisitions of music catalogs[122](index=122&type=chunk) - Cash used for financing activities decreased by **70% YoY** to **$2.51 million**, mainly reflecting a decrease in net repayments of the secured line of credit[123](index=123&type=chunk) - The Senior Credit Facility's revolving credit commitment increased to **$550 million**, with **$158.17 million** remaining borrowing availability as of June 30, 2025[127](index=127&type=chunk)[126](index=126&type=chunk) - The Company was in compliance with all financial covenants (fixed charge coverage ratio and consolidated senior debt to library value ratio) and non-financial covenants under the Senior Credit Facility as of June 30, 2025[136](index=136&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Reservoir Media, Inc. is not required to provide detailed quantitative and qualitative disclosures about market risk - The Company is exempt from providing detailed market risk disclosures as it qualifies as a smaller reporting company[144](index=144&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the Company's disclosure controls and procedures and the status of remediation efforts for previously identified material weaknesses in internal control over financial reporting, with one related to the third-party Recorded Music royalty system remaining - Disclosure controls and procedures were deemed ineffective as of June 30, 2025, due to an unremediated material weakness in internal controls over financial reporting[145](index=145&type=chunk) - The remaining material weakness is related to the improper design of control activities for the third-party Recorded Music royalty system[146](index=146&type=chunk) - Management is actively implementing a remediation plan, including training, policy enhancements, new controls, and improved documentation, with ongoing evaluation of effectiveness[147](index=147&type=chunk)[148](index=148&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=Part%20II.%20Other%20Information) This section provides additional information on legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The Company is subject to various legal claims and contingencies in the normal course of business but does not believe any current proceedings would have a material adverse effect on its financial position, results of operations, or cash flows - The Company is not currently involved in any legal proceedings expected to have a material adverse effect on its business, financial condition, or results of operations[153](index=153&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the Company's risk factors from those disclosed in its Annual Report on Form 10-K for the year ended March 31, 2025 - No material changes to the Company's risk factors have occurred since the Annual Report on Form 10-K filed on March 31, 2025[154](index=154&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company reports no previously undisclosed unregistered sales of equity securities during the three months ended June 30, 2025 - No unregistered sales of equity securities occurred during the three months ended June 30, 2025, that have not been previously disclosed[155](index=155&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reports no defaults upon senior securities - There were no defaults upon senior securities[156](index=156&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[157](index=157&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the quarter[158](index=158&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report, including organizational documents, credit agreement amendments, and certifications - Key exhibits include the Third Amendment to the Fourth Amended and Restated Credit Agreement, dated June 3, 2025, and certifications from the CEO and CFO[161](index=161&type=chunk)

Financial Data and Key Metrics Changes - Revenue for the first fiscal quarter was $37.2 million, representing a 5% year-over-year improvement on an organic basis and an 8% increase when including acquisitions [12][13] - OIBDA was $12.8 million, an increase of 12% year-over-year, and adjusted EBITDA was up 10% to $13.9 million compared to Q1 in fiscal 2025 [13] - Net loss for the first quarter was approximately $600,000 compared to a net loss of $500,000 in the previous year [13] Business Line Data and Key Metrics Changes - Music Publishing revenue increased by 4% to $24.9 million, driven by synchronization revenue and other publishing revenue [14] - Recorded Music segment revenue increased by 8% to $10.4 million, primarily due to growth in digital revenue from music streaming services [16] Market Data and Key Metrics Changes - The global immersive entertainment industry was valued at $133 billion in 2024 and is expected to reach $473 billion by 2030, indicating significant growth potential in this sector [7] Company Strategy and Development Direction - The company is advancing a robust pipeline of acquisition opportunities and diversifying its portfolio to enhance long-term value [6] - Recent investments include a partnership with Lightroom, an immersive entertainment company, and the acquisition of independent label Fools Gold Records [6][9] - The company aims to build and strengthen its recorded music platform with commercially relevant assets, focusing on independent music [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about fiscal 2026, indicating that the financial performance in the first quarter is a strong indicator that the company's strategy is working [19] - The company maintains its full-year guidance for revenue and adjusted EBITDA, signaling confidence in achieving its targets [18] Other Important Information - The company amended its senior credit facility to increase its revolving credit commitment from $450 million to $550 million, providing greater flexibility for future transactions [17] Q&A Session Summary Question: Details on the Lightroom investment and IP monetization - Management indicated that the investment in Lightroom represents a single-digit equity stake and is seen as synergistic to the company's asset base [22][23] Question: Confirmation on digital revenue timing - Management clarified that the digital revenue fluctuations were due to timing of receipts and not indicative of weakness in certain digital service providers [24][26] Question: Future administrative expenses and inflationary pressures - Management noted that while inflationary pressures exist, the bulk of the increase in administrative expenses is driven by increased management revenue, with efforts to control costs [27] Question: Trends in gross margins and sustainability - Management explained that lower physical revenue contributed to margin benefits, and the mix of assets is driving revenue improvements [31][34] Question: M&A pipeline and geographic focus - Management stated that the M&A pipeline remains strong with an even split between publishing and recording opportunities, focusing on transactions that provide the highest returns [37][38] Question: Sourcing of deals - Management indicated that most substantial deals are sourced off-market, with a smaller portion coming from auction processes [39][40]

Group 1 - Reservoir Media, Inc. reported a quarterly loss of $0.01 per share, consistent with the Zacks Consensus Estimate, and the same loss as the previous year [1] - The company posted revenues of $37.16 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 2.47%, and up from $34.32 million year-over-year [2] - Reservoir Media shares have declined approximately 13.7% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [3] Group 2 - The earnings outlook for Reservoir Media is mixed, with the current consensus EPS estimate at $0.05 on revenues of $43.22 million for the upcoming quarter, and $0.16 on revenues of $166.56 million for the current fiscal year [7] - The Zacks Industry Rank indicates that the Media Conglomerates sector is in the bottom 27% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] Group 3 - The estimate revisions trend for Reservoir Media was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[First Quarter Fiscal 2026 Results Overview](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Results%20Overview) Reservoir Media's Q1 FY2026 saw strong revenue and Adjusted EBITDA growth, driven by strategic acquisitions and effective management [Key Highlights and Management Commentary](index=1&type=section&id=Key%20Highlights%20and%20Management%20Commentary) Reservoir Media achieved 8% revenue and 10% Adjusted EBITDA growth in Q1 FY2026, driven by strategic acquisitions and cost management Q1 FY2026 Key Financial Metrics | Metric | Q1 FY2026 | YoY Change | | :--- | :--- | :--- | | **Total Revenue** | $37.2 million | +8% | | **Music Publishing Revenue** | $24.9 million | +4% | | **Recorded Music Revenue** | $10.4 million | +8% | | **Operating Income** | $5.4 million | +10% | | **Adjusted EBITDA** | $13.9 million | +10% | | **Net Loss** | ($0.6) million | - | | **Loss per Share** | ($0.01) | Unchanged | - Management emphasized healthy top-line growth and a **10% year-over-year improvement in Adjusted EBITDA**, attributing it to effective cost management and a focus on capital deployment and value enhancement[3](index=3&type=chunk) - Key strategic initiatives in the quarter include: - Acquiring master rights from the independent label Fool's Gold Records - Investing in London-based immersive entertainment company Lightroom - Extending publishing deals with Joni Mitchell and Khris Riddick-Tynes[4](index=4&type=chunk) [Q1 FY2026 Financial Performance](index=2&type=section&id=Q1%20FY2026%20Financial%20Performance) This section details Reservoir Media's consolidated financial results for Q1 FY2026, highlighting revenue growth, operating income, and net loss drivers [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Q1 FY2026 saw 8% revenue growth to $37.2 million, 10% operating income increase to $5.4 million, and 10% Adjusted EBITDA rise to $13.9 million, with net loss widening Consolidated Financial Results ($M) | Financial Metric | Q1 FY2026 ($M) | Q1 FY2025 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $37.2 | $34.3 | 8% | | **Operating Income** | $5.4 | $5.0 | 10% | | **OIBDA** | $12.8 | $11.3 | 12% | | **Net Loss** | ($0.6) | ($0.5) | 42% | | **Adjusted EBITDA** | $13.9 | $12.6 | 10% | - Revenue growth was attributed to strong synchronization licensing in the Music Publishing segment and continued growth of digital revenue within the Recorded Music segment[5](index=5&type=chunk) - The increase in net loss was primarily driven by higher interest expense and losses on fair value swaps, partially offset by foreign exchange gains and higher operating income[7](index=7&type=chunk) - **Adjusted EBITDA increased by 10% to $13.9 million**, mainly as a result of the increase in total revenue and improving margins[6](index=6&type=chunk) [Segment Performance](index=3&type=section&id=First%20Quarter%20Fiscal%202026%20Segment%20Review) This section analyzes the individual performance of Reservoir Media's Music Publishing and Recorded Music segments in Q1 FY2026 [Music Publishing](index=3&type=section&id=Music%20Publishing) Music Publishing revenue increased 4% to $24.9 million, driven by synchronization and other revenue, leading to 12% OIBDA growth and margin expansion Music Publishing Revenue by Type ($M) | Revenue by Type | Q1 FY2026 ($M) | Q1 FY2025 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Digital | $14.3 | $14.6 | (2)% | | Performance | $4.8 | $5.1 | (7)% | | Synchronization | $4.2 | $2.8 | 48% | | Mechanical | $0.6 | $0.7 | (7)% | | Other | $1.1 | $0.8 | 42% | | **Total Revenue** | **$24.9** | **$24.0** | **4%** | - The segment's **OIBDA increased 12% to $7.6 million**, and the OIBDA margin improved to **30%** from 28% in the prior-year quarter, reflecting stronger revenue and margin expansion[9](index=9&type=chunk) [Recorded Music](index=3&type=section&id=Recorded%20Music) Recorded Music revenue grew 8% to $10.4 million, driven by a 23% increase in digital revenue, with OIBDA up 9% and margins stable Recorded Music Revenue by Type ($M) | Revenue by Type | Q1 FY2026 ($M) | Q1 FY2025 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Digital | $8.0 | $6.6 | 23% | | Physical | $1.1 | $1.4 | (21)% | | Neighboring Rights | $1.1 | $1.1 | (3)% | | Synchronization | $0.3 | $0.6 | (57)% | | **Total Revenue** | **$10.4** | **$9.6** | **8%** | - The increase in revenue was primarily driven by **digital revenue growth**, supported by the expansion of music streaming services and acquisitions of additional catalogs[11](index=11&type=chunk) - Recorded Music **OIBDA increased 9% to $4.9 million**, with the OIBDA margin remaining unchanged at **46%**[12](index=12&type=chunk) [Balance Sheet and Liquidity](index=4&type=section&id=Balance%20Sheet%20and%20Liquidity) This section provides an overview of Reservoir Media's financial position, including liquidity, debt, and cash flow from operations [Balance Sheet and Liquidity Summary](index=4&type=section&id=Balance%20Sheet%20and%20Liquidity%20Summary) As of June 30, 2025, Reservoir had $173.0 million in liquidity, $372.5 million Net Debt, and $6.0 million operating cash flow Balance Sheet and Liquidity ($M) | Metric | As of June 30, 2025 ($M) | As of March 31, 2025 ($M) | | :--- | :--- | :--- | | Cash and cash equivalents | $14.8 | $21.4 | | Available under credit facility | $158.2 | $58.2 | | **Total available liquidity** | **$173.0** | **$79.6** | | Total debt | $387.4 | $388.1 | | **Net Debt** | **$372.5** | **$366.7** | - Cash provided by operating activities was **$6.0 million** for the three months ended June 30, 2025, a decrease of **$2.5 million** compared to the prior year, primarily due to the timing of royalty payments[13](index=13&type=chunk) [Fiscal Year 2026 Outlook](index=4&type=section&id=Fiscal%20Year%202026%20Outlook) Reservoir Media reaffirms its financial guidance for FY2026, projecting continued growth in revenue and Adjusted EBITDA [FY2026 Guidance](index=4&type=section&id=FY2026%20Guidance) Reservoir Media reaffirmed FY2026 guidance, expecting revenue of $164-169 million and Adjusted EBITDA of $68-72 million FY2026 Financial Guidance | Outlook | Guidance Range | Growth (at mid-point) | | :--- | :--- | :--- | | Revenue | $164M - $169M | 5% | | Adjusted EBITDA | $68M - $72M | 6% | - The Chief Financial Officer confirmed the company is "squarely on the path to achieving our previously issued revenue and adjusted EBITDA guidance for fiscal year 2026"[16](index=16&type=chunk) [Appendix: Financial Statements and Non-GAAP Reconciliations](index=6&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Non-GAAP%20Reconciliations) This appendix provides detailed unaudited financial statements and reconciliations of non-GAAP measures for Q1 FY2026 [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q1 FY2026 income statement shows total revenues of $37.2 million, operating income of $5.4 million, and a net loss of ($0.6) million Condensed Consolidated Statements of Income (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Revenues** | **$37,164** | **$34,317** | | Total costs and expenses | $31,718 | $29,355 | | **Operating income** | **$5,447** | **$4,962** | | Loss before income taxes | ($915) | ($747) | | **Net loss attributable to Reservoir Media, Inc.** | **($556)** | **($347)** | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $857.0 million, liabilities $486.9 million, and shareholders' equity $370.1 million Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Total current assets** | **$69,472** | **$79,284** | | **Total assets** | **$856,976** | **$865,127** | | **Total current liabilities** | **$53,703** | **$65,837** | | **Total liabilities** | **$486,868** | **$498,927** | | **Total shareholders' equity** | **$370,109** | **$366,200** | [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) This section reconciles non-GAAP financial measures, detailing OIBDA at $12.8 million and Adjusted EBITDA at $13.9 million for Q1 FY2026 [Reconciliation of Operating Income to OIBDA](index=11&type=section&id=Reconciliation%20of%20Operating%20Income%20to%20OIBDA) Operating income of $5.4 million is reconciled to OIBDA of $12.8 million for Q1 FY2026 by adding amortization and depreciation Reconciliation of Operating Income to OIBDA (in thousands) | (in thousands) | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Operating income** | **$5,447** | **$4,962** | | Amortization and depreciation | $7,314 | $6,385 | | **OIBDA** | **$12,760** | **$11,346** | [Reconciliation of Net Loss to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) Net loss of ($0.6) million is reconciled to Adjusted EBITDA of $13.9 million for Q1 FY2026 through various adjustments Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | (in thousands) | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Net Loss** | **($644)** | **($453)** | | Income Tax Benefit | ($271) | ($294) | | Interest Expense | $6,296 | $5,059 | | Amortization and Depreciation | $7,314 | $6,385 | | **EBITDA** | **$12,695** | **$10,697** | | Other Adjustments | $1,200 | $1,923 | | **Adjusted EBITDA** | **$13,895** | **$12,620** |

Company Overview - Reservoir is the first U S -based publicly traded independent music company[12] - The company has a vast collection of iconic hits across various genres, geographies, and time periods[16] - Reservoir has offices in NYC (HQ), LA, Nashville, London, Toronto, Abu Dhabi & Mumbai[17] Financial Performance and Outlook - Q4 Fiscal Year 2025 total revenue grew by 6% year-over-year[93] - Q4 Fiscal Year 2025 Adjusted EBITDA grew by 14% year-over-year[93] - The company issued a fiscal year 2026 outlook, projecting revenue between $164 million and $169 million (5% growth) and Adjusted EBITDA between $68 million and $72 million (6% growth)[98] - As of March 31, 2025, the company's total debt was $388 million, with $21 million in cash, resulting in net debt of $367 million[102] Business Segments - Music Publishing accounted for 68% of revenue[15] - Recorded Music accounted for 28% of revenue[15] - Other revenue streams accounted for 4% of revenue[15] - Digital revenue makes up 56% of Music Publishing revenue[35] - Digital revenue makes up 69% of Recorded Music revenue[48] M&A and Investments - Reservoir has invested over $1 billion since inception, with $868 million in acquisitions of catalogs and companies and $195 million in futures spend[24] - The company's M&A pipeline includes over 100 potential targets worth over $1 billion as of March 31, 2025[24]

[Part I](index=6&type=section&id=PART%20I) [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Reservoir Media, Inc. is an independent music company focused on music publishing and recorded music, driven by catalog acquisitions and streaming growth - Fiscal Year 2025 Revenue by Segment | Segment | Revenue (USD) | Percentage of Total Revenue | | :--- | :--- | :--- | | Music Publishing | $107.4 million | ~68% | | Recorded Music | $44.3 million | ~28% | - The company's strategy is built on strategic acquisitions and long-term ownership of rights, having deployed approximately **$640 million** in capital over the last five years[19](index=19&type=chunk)[26](index=26&type=chunk) - Global music industry growth is primarily driven by streaming, which accounted for **69% of global revenues in 2024**. The number of global music subscribers grew **10.6% to 752 million**[28](index=28&type=chunk) - The company is positioned to capitalize on growth in emerging markets, particularly in the MENA region, which was the fastest-growing region for recorded music revenue in 2024 at **22.8%**[29](index=29&type=chunk)[71](index=71&type=chunk) - The music publishing and recorded music industries are highly competitive and dominated by three major companies (Sony, Universal, Warner), which account for approximately **60% and 70%** of their respective markets[89](index=89&type=chunk)[90](index=90&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from intense competition, operational challenges, intellectual property threats including AI, and financial vulnerabilities like substantial indebtedness - The company operates in a highly competitive market and its success depends on its ability to sign and retain successful songwriters and recording artists[106](index=106&type=chunk) - Management identified material weaknesses in internal control over financial reporting (ICFR) as of March 31, 2025, related to an ineffective control environment, lack of qualified personnel, an ineffective risk assessment process, and improper design of control activities[119](index=119&type=chunk)[120](index=120&type=chunk) - A significant portion of revenues is subject to rate regulation by government entities or collecting societies, which may limit profitability[123](index=123&type=chunk) - The development and use of Artificial Intelligence (AI) present new challenges for protecting intellectual property, including unauthorized use of copyrighted works and artist likenesses to train AI models[156](index=156&type=chunk)[158](index=158&type=chunk) - The company has substantial indebtedness under its **$450 million** Senior Credit Facility, which could require a significant portion of cash flow for debt service and limit financial flexibility[141](index=141&type=chunk)[142](index=142&type=chunk) - As an emerging growth company, Reservoir takes advantage of reduced reporting requirements, which may make its stock less attractive to some investors[180](index=180&type=chunk) [Item 1B. Unresolved Staff Comments](index=51&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - Not applicable[185](index=185&type=chunk) [Item 1C. Cybersecurity](index=51&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive cybersecurity program overseen by the Board, with no material incidents reported as of the filing date - The cybersecurity program is led by the Vice President of Technology, acting as CISO, with over **20 years** of experience[186](index=186&type=chunk) - The Board of Directors, via the Audit Committee, provides oversight for cybersecurity policies and risk assessments[188](index=188&type=chunk) - As of the filing date, no cybersecurity incidents have materially affected the company[189](index=189&type=chunk) [Item 2. Properties](index=53&type=section&id=Item%202.%20Properties) The company leases its corporate headquarters in New York City and additional offices globally, which are deemed adequate for current needs - The company's principal executive offices are leased in New York, NY, with additional leased offices in Nashville, Los Angeles, Toronto, London, and Abu Dhabi[191](index=191&type=chunk) [Item 3. Legal Proceedings](index=53&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to ordinary course legal claims, with a royalty dispute settled in October 2023, and no expected material adverse effects - The company is subject to ordinary course legal claims but does not expect them to have a material adverse effect[193](index=193&type=chunk) - A royalty dispute that began in 2017 was settled in October 2023, resulting in a write-off of approximately **$2.7 million** in recoupable legal fees and **$620,000** of interest expense in fiscal year 2024[448](index=448&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[194](index=194&type=chunk) [Part II](index=54&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=54&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Reservoir's common stock and warrants trade on Nasdaq, with no dividends planned as the company retains earnings for growth - Common Stock and Warrants are traded on Nasdaq under symbols **RSVR** and **RSVRW**[196](index=196&type=chunk) - The company has no plans to pay cash dividends in the foreseeable future and intends to retain earnings for growth[198](index=198&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 saw **10% revenue growth** to **$158.7 million**, with operating income up **43%** and net income significantly higher, supported by strong liquidity and strategic acquisitions [Results of Operations](index=60&type=section&id=Results%20of%20Operations) Fiscal 2025 revenues grew **10%** to **$158.7 million**, driven by digital and publishing growth, leading to a **43%** surge in operating income and **18%** Adjusted EBITDA increase - Consolidated Income Statement Summary (in thousands) | Metric | Fiscal 2025 (USD thousands) | Fiscal 2024 (USD thousands) | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $158,706 | $144,856 | 10% | | Operating Income | $35,061 | $24,576 | 43% | | Net Income | $7,731 | $837 | NM | | Net Income Attributable to Reservoir | $7,750 | $645 | NM | - Revenue by Segment (in thousands) | Segment | Fiscal 2025 (USD thousands) | Fiscal 2024 (USD thousands) | % Change | | :--- | :--- | :--- | :--- | | Music Publishing | $107,412 | $96,193 | 12% | | Recorded Music | $44,250 | $42,367 | 4% | | Other | $7,043 | $6,296 | 12% | - The increase in Recorded Music revenue was partly due to royalty recoveries for underreported usage and growth in streaming, offset by a decrease in physical revenue after strong De La Soul sales in the prior year[224](index=224&type=chunk) - Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Fiscal 2025 (USD thousands) | Fiscal 2024 (USD thousands) | % Change | | :--- | :--- | :--- | :--- | | Net Income | $7,731 | $837 | NM | | EBITDA | $58,054 | $47,246 | 23% | | Adjusted EBITDA | $65,745 | $55,644 | 18% | [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$21.4 million** in cash, with liquidity supported by operating cash flow and a **$450 million** Senior Credit Facility, deemed sufficient for future operations - As of March 31, 2025, the company had **$21.4 million** in cash and cash equivalents[261](index=261&type=chunk) - Cash Flow Summary (in thousands) | Activity | Fiscal 2025 (USD thousands) | Fiscal 2024 (USD thousands) | | :--- | :--- | :--- | | Cash from Operating Activities | $45,279 | $36,193 | | Cash used for Investing Activities | $(96,719) | $(50,553) | | Cash from Financing Activities | $54,518 | $17,560 | - The company has a Senior Credit Facility with a **$450 million** capacity, maturing in December 2027. As of March 31, 2025, **$391.8 million** was drawn, leaving **$58.2 million** available[270](index=270&type=chunk)[403](index=403&type=chunk) - The company has two outstanding interest rate swaps with a combined notional amount of **$150 million** to hedge against interest rate fluctuations on its debt[282](index=282&type=chunk) [Critical Accounting Policies and Estimates](index=79&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant estimates for revenue recognition, royalty advance recoverability, acquisition classification, and intangible asset valuation and impairment - Revenue Recognition: Royalties are recognized when usage occurs, based on reports from collecting societies or estimates using historical data if reports are delayed[290](index=290&type=chunk) - Royalty Advances: Advances to artists and songwriters are capitalized as assets if they are deemed recoverable from future royalties. Recoverability is assessed based on forecasts of future revenue[293](index=293&type=chunk)[295](index=295&type=chunk) - Acquisitions: The company assesses whether an acquisition is an asset acquisition or a business combination, which determines if transaction costs are capitalized or expensed[296](index=296&type=chunk)[297](index=297&type=chunk) - Intangible Assets: Music catalogs are amortized on a straight-line basis and reviewed for impairment whenever events indicate their carrying value may not be recoverable[298](index=298&type=chunk)[299](index=299&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=82&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for fiscal years 2025 and 2024, including the independent auditor's report and detailed financial statements - The financial statements were audited by Deloitte & Touche LLP, which issued an unqualified opinion[304](index=304&type=chunk)[308](index=308&type=chunk) - Key Balance Sheet Figures (as of March 31, 2025) | Account | Amount (USD) | | :--- | :--- | | Total Assets | $865,127,010 | | Total Liabilities | $498,927,228 | | Total Shareholders' Equity | $366,199,782 | - Key Income Statement Figures (for Fiscal Year Ended March 31, 2025) | Account | Amount (USD) | | :--- | :--- | | Revenues | $158,705,736 | | Operating Income | $35,061,034 | | Net Income | $7,731,397 | | Diluted EPS | $0.12 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=124&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure during the period - None[455](index=455&type=chunk) [Item 9A. Controls and Procedures](index=124&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of March 31, 2025, due to an unremediated material weakness in internal control over financial reporting related to third-party royalty processing - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to an unremediated material weakness[457](index=457&type=chunk) - During fiscal 2025, the company remediated three previously identified material weaknesses related to: (i) ineffective control environment/segregation of duties, (ii) lack of qualified personnel, and (iii) an ineffective risk assessment process[463](index=463&type=chunk)[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk) - A material weakness remains related to the improper design of controls over a third-party system for Recorded Music royalty processing, as the service organization does not provide an assurance report (e.g., SOC 1)[466](index=466&type=chunk)[468](index=468&type=chunk)[469](index=469&type=chunk) [Item 9B. Other Information](index=128&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last quarter of fiscal 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement in the last quarter of fiscal 2025[475](index=475&type=chunk) [Part III](index=129&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=129&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance will be incorporated by reference from the 2025 Proxy Statement, and a Code of Ethics is available - The required information will be included in the definitive proxy statement to be filed within **120 days** after the fiscal year-end[478](index=478&type=chunk) - The company has adopted a Code of Ethics, which is available on its investor relations website[479](index=479&type=chunk) [Item 11. Executive Compensation](index=129&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information will be incorporated by reference from the company's definitive 2025 Proxy Statement - The required information will be included in the definitive proxy statement to be filed within **120 days** after the fiscal year-end[480](index=480&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=129&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information for beneficial owners and management will be incorporated by reference from the company's definitive 2025 Proxy Statement - The required information will be included in the definitive proxy statement to be filed within **120 days** after the fiscal year-end[481](index=481&type=chunk) [Item 13. Certain Relationships and Related Transactions, Director Independence](index=129&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20Director%20Independence) Information on certain relationships, related transactions, and director independence will be incorporated by reference from the company's definitive 2025 Proxy Statement - The required information will be included in the definitive proxy statement to be filed within **120 days** after the fiscal year-end[482](index=482&type=chunk) [Item 14. Principal Accounting Fees and Services](index=129&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accounting fees and services information will be incorporated by reference from the company's definitive 2025 Proxy Statement - The required information will be included in the definitive proxy statement to be filed within **120 days** after the fiscal year-end[483](index=483&type=chunk) [Part IV](index=130&type=section&id=Part%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=130&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section provides an index of all exhibits filed with the Form 10-K, including financial statements and various corporate documents - This section provides an index of all exhibits filed with the **10-K** report[487](index=487&type=chunk)[488](index=488&type=chunk) [Item 16. Form 10-K Summary](index=134&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided - None[494](index=494&type=chunk)

Company Overview - Reservoir Media, Inc. held its Fourth Quarter Fiscal Year 2025 Earnings Conference Call on May 28, 2025, at 10:00 AM ET [1] - The call featured key participants including Jackie Marcus from Investor Relations, Golnar Khosrowshahi (Founder and CEO), and Jim Heindlmeyer (CFO) [1][4] Financial Results - Reservoir Media released its earnings press release for the fourth quarter and fiscal year 2025, which ended on March 31, 2025 [3] - The earnings press release is accessible from the Investor Relations section of the company's website [3] Call Structure - The conference call was structured to include a formal presentation followed by a question-and-answer session [1] - The call was simultaneously webcast and recorded for future access on the Investor Relations section of the website [4]

Financial Data and Key Metrics Changes - Reservoir Media reported a 10% year-over-year increase in annual revenue for fiscal year 2025, reaching $158.7 million, exceeding guidance [7][18] - Adjusted EBITDA for the fiscal year increased by 18% to $65.7 million, driven by higher gross margins and improved operating leverage [18][19] - Net income for the fiscal year was $7.7 million, compared to $0.8 million in the previous year, resulting in diluted earnings per share of $0.12 [20] Business Line Data and Key Metrics Changes - The Music Publishing segment generated revenue of $27.9 million in Q4, a 6% increase year-over-year, while the Recorded Music segment saw a 7% increase to $12 million [21][22] - Synchronization revenue in the Publishing segment increased by 51% to $5.5 million, attributed to the timing of licenses [21] - Recorded Music revenues increased by 4% for the full year, driven by user growth and price increases at streaming services [25] Market Data and Key Metrics Changes - The company is focusing on emerging markets, particularly India and the Middle East, where there are significant growth opportunities due to rising internet connectivity and listenership [11][12] - India is expected to grow at a 13% CAGR through 2027, presenting a substantial opportunity for expanding the international roster [13][45] Company Strategy and Development Direction - Reservoir Media's strategy includes building scale through portfolio-accretive mergers and acquisitions, as well as long-term value-added signings to its global roster of artists and songwriters [28] - The company aims to leverage its high-quality catalog and chart-topping new releases to drive continued growth [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the music industry's resilience against macroeconomic headwinds, citing strong demand for music [28] - The company anticipates continued strong results in fiscal year 2026, with revenue guidance set between $164 million and $169 million [27] Other Important Information - The company deployed over $115 million towards acquisitions and advances during the fiscal year [7][43] - Total debt at the end of the fiscal year was approximately $388.1 million, with net debt of $366.7 million [26] Q&A Session Summary Question: Are you seeing markedly better ROIs in international geographies? - Management noted better opportunities and higher ROIs in emerging markets like India and the Middle East due to less competition [31] Question: How do you look at revenue seasonality in 2026? - Management expects a return to a more typical seasonal pattern, with the second and fourth quarters likely being stronger [32][33] Question: Can you discuss your hedging strategy regarding interest rates? - The company is currently hedged at $150 million and is evaluating whether to add additional hedges based on market conditions [34] Question: What is the expected split of capital deployment between publishing and recorded music in 2026? - Management indicated that capital deployment will be opportunistic and based on available deal flow rather than a fixed split [35] Question: Can you elaborate on the guidance for fiscal year 2026? - Management acknowledged that while they have had hits in the past, they do not project future hits into their guidance, which may appear conservative [39][52]

Financial Data and Key Metrics Changes - Reservoir Media reported a 10% year-over-year increase in revenue for fiscal year 2025, reaching $158.7 million, exceeding guidance [18] - Adjusted EBITDA for the fiscal year increased by 18% to $65.7 million, driven by higher gross margins and improved operating leverage [19] - Net income for fiscal year 2025 was $7.7 million, compared to $0.8 million in the previous year, resulting in diluted earnings per share of $0.12 [20] Business Line Data and Key Metrics Changes - The Music Publishing segment generated revenue of $27.9 million in Q4 2025, a 6% increase year-over-year, with synchronization revenue up 51% [21] - The Recorded Music segment saw revenue of $12 million in Q4 2025, a 7% increase, with digital revenue rising 19% [22] - For the full year, Music Publishing revenue rose 12%, while Recorded Music revenues increased by 4% [23][24] Market Data and Key Metrics Changes - The company is focusing on emerging markets, particularly India and the Middle East, where significant growth opportunities exist due to rising internet connectivity and listenership [11][12] - India is projected to grow at a 13% CAGR through 2027, presenting a substantial opportunity for expanding the company's international roster [13] Company Strategy and Development Direction - The company aims to build scale through portfolio-accretive mergers and acquisitions and long-term value-additive signings [27] - Reservoir Media is committed to organic growth and has the necessary rights and infrastructure to market its portfolio aggressively [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the music industry's resilience against macroeconomic headwinds, highlighting strong demand for their catalog [27] - The company anticipates continued strong results in fiscal year 2026, with revenue guidance set between $164 million and $169 million [26] Other Important Information - The company closed the fiscal year with total liquidity of $79.6 million and total debt of $388.1 million [25] - Reservoir Media's strategic capital deployment included over $15 million towards acquisitions and advances [6] Q&A Session Summary Question: Are you seeing markedly better ROIs in international geographies? - Management noted better opportunities and higher ROIs in emerging markets like India and the Middle East due to less competition [30] Question: How do you look at revenue seasonality in 2026? - Management expects a return to a more regular cadence, with the second and fourth quarters likely being slightly higher than the first and third [31] Question: Can you talk about your hedging strategy regarding interest rates? - The company is currently hedged at $150 million and is evaluating the need for additional hedges due to recent volatility [32] Question: How much capital are you targeting to deploy in 2026? - Management indicated that capital deployment will be opportunistic, depending on available deal flow [33] Question: Can you clarify the $150 million figure mentioned for capital deployment? - The $150 million figure refers to the total for the year, not just the fourth quarter [40] Question: How does the growth rate in India compare to other regions? - The growth rate in India is significant due to its large population and potential for converting users to paying subscribers, unlike more saturated markets like the US [42] Question: What is the expected organic growth rate for the current catalog? - Management indicated that while they have had hits, they do not project another hit in fiscal year 2026, leading to a more conservative guidance [48]