Financial Data and Key Metrics Changes - Revenue for Q2 fiscal 2026 was $45.4 million, a 7% year-over-year improvement on an organic basis and a 12% increase including acquisitions [15][18] - Net income for the quarter was approximately $2.2 million compared to $152,000 in the same quarter of fiscal 2025, resulting in diluted earnings per share of $0.03 [16][17] - OIBDA increased by 10% year-over-year to $18.2 million, and adjusted EBITDA also rose by 10% to $19.4 million [16] Business Line Data and Key Metrics Changes - Music publishing revenue increased by 8% to $30.9 million, driven by a 47% increase in performance revenue and growth in mechanical and digital revenue [17] - Recorded music segment revenue grew by 21% to $13 million, primarily due to a 20% increase in digital revenue [18] Market Data and Key Metrics Changes - The company reported a total available liquidity of $152.1 million, consisting of $27.9 million in cash and $124.2 million available under its revolver [18] - Total debt at the end of the quarter was $421.8 million, with net debt of $393.9 million, an increase from $366.7 million as of March 31, 2025 [18] Company Strategy and Development Direction - The company is focused on leveraging a diverse, high-quality catalog and scaling through catalog development, strategic signings, and global diversification [5][6] - The acquisition of Miles Davis's catalog is expected to enhance long-term value and create unique value enhancement opportunities [21] - The company aims to expand its geographic footprint, recently announcing deals in the MENA region [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year financial goals, supported by a robust deal pipeline exceeding $1 billion [21][22] - The company anticipates continued growth driven by successful value enhancement efforts and sound capital deployment strategies [20] Other Important Information - The company announced the extension of its publishing deal for Nick Drake's catalog and a new deal with the Drake estate for Molly Drake's catalog [7] - The company is actively pursuing collaborations and marketing initiatives to celebrate the centennial of Miles Davis in 2026 [6][7] Q&A Session Summary Question: What is driving the strong organic growth of 7% year-over-year? - Management indicated that the 7% organic growth aligns with industry expectations and is influenced by both new asset maximization and existing catalog performance [24][25] Question: Was the Miles Davis acquisition part of the existing pipeline? - The acquisition was included in the pipeline, with discussions beginning in November 2023, indicating a formal process around the transaction [26] Question: Will there be an increase in administrative expenses due to the Miles Davis catalog acquisition? - Management clarified that while marketing resources would be reallocated, there would be no significant impact on administrative expenses [27] Question: When will the one-time events related to Miles Davis and "Monster Mash" contribute to the P&L? - These events are expected to begin contributing in calendar 2026, with a 12- to 18-month window of activations anticipated [31] Question: How should G&A expenses be modeled going forward? - Management suggested that the current run rate is expected to continue for the balance of the year, with minor fluctuations [32] Question: How is organic growth influenced by pricing and digital subscriptions? - Organic growth is a mix of industry growth factors, including subscriber growth, price increases, and the company's initiatives to enhance asset value [33]