Reservoir Media(US:RSVR)2025-05-28 15:02Financial 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]