Reservoir Media(US:RSVR)2025-11-04 16:00Financial Data and Key Metrics Changes - Revenue for Q2 2026 was $45.4 million, representing a 7% year-over-year improvement on an organic basis and a 12% increase including acquisitions [16] - Net income for the quarter was approximately $2.2 million, compared to $152,000 in the prior year [18] - Diluted earnings per share for the quarter was $0.03, compared to $0.00 per share in the prior year [18] 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 [18] - Recorded Music segment revenue grew by 21% to $13 million, primarily due to a 20% increase in digital revenue and synchronization revenue growth [19] Market Data and Key Metrics Changes - The company experienced a 12% growth in total revenue, with 7% from organic growth and 5% from acquisitions [6] - The company noted strong demand for its assets, particularly in emerging markets, contributing to increased engagement and listenership [7] Company Strategy and Development Direction - The company is focused on leveraging a diverse catalog and scaling through catalog development, strategic signings, and global diversification [6] - The acquisition of Miles Davis' catalog is expected to enhance long-term value and create unique value enhancement opportunities [22] - The company aims to expand its geographic footprint, recently entering the MENA region with new catalog deals [11] 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 [22] - The company anticipates continued growth driven by strategic acquisitions and effective cash flow management [21] Other Important Information - The company reported total available liquidity of $152.1 million, consisting of cash on hand and revolver availability [20] - Total debt at the end of the quarter was $421.8 million, with net debt of $393.9 million [20] 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 value maximization and existing catalog performance [28][29] Question: Was the Miles Davis acquisition part of the existing pipeline? - Management confirmed that the Miles Davis acquisition was included in the pipeline and involved a formal process that began in November 2023 [30] Question: Will there be an increase in administrative expenses due to the Miles Davis catalog? - Management stated that there would be no significant impact on administration expenses, as marketing resources would be reallocated internally [31] Question: When will the one-time events like the Monster Mash movie impact the P&L? - Management expects these one-time events to contribute to the P&L starting in calendar year 2026, with a 12 to 18-month window of activations [36] Question: How should G&A expenses be modeled going forward? - Management indicated that G&A expenses are largely driven by management business revenue and are expected to stabilize around the current run rate for the remainder of the year [37] Question: How does organic growth relate to digital subscription pricing? - Management noted that organic growth is influenced by a mix of industry growth factors, including subscriber growth, price increases, and internal initiatives [39]