Reservoir Media(US:RSVR)2025-02-06 02:11Financial Data and Key Metrics Changes - Total revenue for the third quarter was $42.3 million, representing a 19% improvement year-over-year, driven by a 16% increase in music publishing revenue and a 20% increase in recorded music revenue [8][21] - Adjusted EBITDA was $17.3 million, reflecting a 26% improvement from the same quarter last year [8][23] - Net income for the quarter was approximately $5.3 million, compared to a net loss of $2.9 million in the same quarter of fiscal 2024 [24] Business Line Data and Key Metrics Changes - Music Publishing revenue increased 16% year-over-year to $26.9 million, primarily due to revenue growth from the existing catalog and a 20% increase in digital revenue [26][27] - Recorded music revenue rose by 20% year-over-year to $12 million, driven by a royalty recovery related to underreported usage and price increases at multiple music streaming services [27][28] Market Data and Key Metrics Changes - Reservoir took the sixth largest market share of top radio airplay and the eighth largest share of the Billboard Hot 100 [17] - Catalog streams in the United States continue to eclipse current music, representing over 73% of all on-demand audio streams [15] Company Strategy and Development Direction - The company is focused on growing and diversifying its portfolio of music and roster of creators through off-market deals [9][10] - Reservoir has deployed over $70 million across catalog acquisitions and expects to remain active in the market [10][11] - The company aims to build scale and grow its business through thoughtful capital deployment [64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a robust pipeline of off-market deals and the potential for ongoing revenue growth from royalty recoveries [37][61] - The company raised its full-year revenue guidance range from $150 million to $153 million to $155 million to $158 million, indicating an expected growth of 8% versus fiscal 2024 [30] Other Important Information - The company celebrated six wins at the 2025 Grammy Awards, highlighting the success of its affiliated talent [18] - Total liquidity as of December 31, 2024, was $92 million, consisting of $17.8 million in cash and $74.2 million available under its revolver [29] Q&A Session Summary Question: Were there any one-time items included in the outsized administrative expenses? - Management noted that the increase in operating expenses was primarily due to compensation for artist managers, which correlates with higher revenue [35] Question: Any updates on the pipeline for catalog acquisitions? - Management confirmed that the pipeline remains robust with a focus on off-market deals [37] Question: Insights on the Spotify Universal deal and its implications for Reservoir? - Management expressed optimism about the deal's terms and its potential industry-wide implications, though they did not have specific insights related to Reservoir [39] Question: Can you discuss the guidance implying a sequential decline in the usually strong quarter? - Management acknowledged that while there are one-time impacts, they build in conservatism in their guidance [46] Question: What drives the neighboring rights revenue issues? - Management explained that neighboring rights revenue can be impacted by the timing of hits and periodic retroactive cleanups, leading to variability [49] Question: How much of the debt is hedged and for how long? - Management stated that approximately $150 million of their debt is hedged, which extends through the current maturity of their facility in December 2027 [51] Question: Any changes to the deal pipeline given macroeconomic conditions? - Management indicated that there are no significant changes to the deal pipeline, which remains strong with high-quality assets [54]