That\u2019s a slight beat over the top end of the range it forecast in its fiscal Q2 2023 call<\/a>, when it expected revenue to come in at $118 million<\/strong> to $122 million<\/strong> for the fiscal year. It marks a 13%<\/strong><\/span> increase over fiscal 2022. On an organic basis (i.e., stripping out M&A activity), it marked an 8%<\/strong><\/span> increase.<\/p>\n Operating income came in at $21.1 million<\/strong>, up 9% YoY<\/strong><\/span>.<\/p>\n Reservoir reports both OIBDA (operating income before depreciation and amortization), which came in at $43.1 million<\/strong>, up 12% YoY<\/strong><\/span>, and EBITDA, which came in at $46.3 million<\/strong>, also up 12% YoY<\/strong><\/span>.<\/p>\n Net income for the fiscal year took a hit, coming in at $2.8 million<\/strong>, compared to $13.1 million<\/strong> in fiscal 2022. Reservoir CFO Jim Heindlmeyer attributed this to a decrease in the gain on fair value of swaps, a one-time tax expense related to a change in the UK tax rate, higher interest expenses and a $914,000<\/strong> loss on the early extinguishment of debt.<\/p>\n Earnings per share came in at $0.04<\/strong> for fiscal 2023, compared to $0.22<\/strong> in fiscal 2022.<\/p>\n Reservoir\u2019s music publishing segment clocked $83.8 million<\/strong> in revenue for the fiscal year, a 9% YoY<\/strong><\/span> increase, led by 18%<\/strong><\/span> growth in both digital and synch.<\/p>\n Its recorded music segment generated $34.8 million<\/strong> in revenue, an 18% YoY<\/strong><\/span> increase, driven primarily by digital (up 25% YoY<\/strong><\/span>) and neighboring rights (a small part of overall revenue, but still up 45% YoY<\/strong><\/span>).<\/p>\n Numbers for fiscal Q4 were somewhat weaker than the FY numbers, which Reservoir Founder and CEO Golnar Khosrowshahi attributed to \u201ca difficult year-over-year comparable due to an exceptional fourth quarter in fiscal 2022.\u201d<\/p>\n Total revenue came in at $34.8 million<\/strong> in fiscal Q4, a 1%<\/strong><\/span> decline from $35.1 million<\/strong> in fiscal Q4 2022. Music publishing revenue came in at $23.2 million<\/strong>, down 8% YoY<\/strong><\/span>, while recorded music revenue came in at $10.8 million<\/strong>, up 10% YoY<\/strong><\/span>.<\/p>\n OIBDA for the fiscal quarter rose 3% YoY<\/strong><\/span> to $14.4 million<\/strong>, while adjusted EBITDA fell 2% YoY<\/strong><\/span> to $15.2 million<\/strong>. Net income fell to $2.2 million<\/strong>, compared to $8.9 million<\/strong> in fiscal Q4 2022.<\/p>\n \u201cWe continue to deliver on our goals and are encouraged by the momentum in our business and the broader music industry over the past fiscal year. We remained steadfast in our disciplined approach to capital deployment with strategic investments to drive our future growth as well as creating value for our roster of artists,\u201d Khosrowshahi said in a statement.<\/p>\n \u201cBringing Grammy-winning hip-hop trio De La Soul\u2019s iconic catalog to all streaming platforms<\/a> for the first time ever showcased our effective value enhancement initiatives, as we deployed our team and resources to drive value through multiple avenues.\u201d<\/p>\n Khosrowshahi added: \u201cWe continue to be the preferred partner of outstanding legacy artists, including recently announced deals with jazz legend Sonny Rollins, Rock and Roll and Grammy Hall of Fame inductee Dion, and multi-Platinum hip-hop producer Mannie Fresh, which will bring significant growth opportunities for their catalogs and create new listeners and fans. Our team\u2019s ability to partner with both legacy and emerging artists to drive value-additive deals is fundamental to our success and reputation as a caretaker of our artists\u2019 bodies of work.\u201d<\/p>\n On the company\u2019s earnings call Wednesday, Heindlmeyer presented Reservoir\u2019s outlook for fiscal 2024, calling for revenue of between $127 million<\/strong> and $132 million<\/strong>, the mid-point of which would mean a 6% YoY<\/strong><\/span> increase. He predicted adjusted EBITDA in the $49 million-$52 million<\/strong> range, which at the mid-point would mean a 9% YoY<\/strong><\/span> increase.<\/p>\n “Our team\u2019s ability to partner with both legacy and emerging artists to drive value-additive deals is fundamental to our success and reputation as a caretaker of our artists\u2019 bodies of work.”<\/p>\n Golnar Khosrowshahi, Reservoir Media<\/span><\/p><\/blockquote>\n \u201cAs we look forward to what’s in store for fiscal 2024, we expect to close several accretive deals that will expand and diversify our portfolio of assets. We are also focused on effectively managing our operating expenses to further improve margins throughout the year,\u201d Heindlmeyer said on the call.<\/p>\n Reservoir conducted a call with analysts on Wednesday (May 31) following the publication of its results. MBW listened in, and here are some of the highlights:<\/p>\n Reservoir’s Founder and CEO devoted time on the earnings call to the company’s acquisitions in the Middle East and South Asia.<\/p>\n \u201cWe\u2026 broadened our emerging market portfolio with the signing of Arab superstar Mohamed Ramadan, Egyptian label 100COPIES, Lebanese music company Voice of Beirut, Indian rappers MC Altaf and D’Evil, and producer Stunnah Beatz,\u201d said Khosrowshahi.<\/p>\n \u201cExpanding our portfolio in these important emerging markets, but especially within the Middle East, is highly important to our overall strategy and a key differentiator for us,\u201d she added.<\/p>\n \u201cWith our network and ability to purchase content at attractive multiples, this region presents significant opportunity as we work to become the largest holder of Arabic music copyrights.\u201d<\/p>\n Reservoir, <\/a>\u00a0in conjunction with MENA-based music publisher and music company PopArabia<\/a> acquired Lebanese label and music publisher, Voice of Beirut in September.<\/p>\n Reservoir said<\/a> at the time that the acquisition builds on its emerging markets strategy, \u201cfurther diversifying the company\u2019s music rights in the fast-growing MENA region\u201d.<\/p>\n Reservoir and PopArabia\u00a0acquired<\/a> Egyptian label 100COPIES in May last year, and also formed a joint venture with the company to sign and develop Egyptian talent.<\/p>\n In recent years, we\u2019ve heard many businesses extol the benefits of diversity \u2013 be it demographic, or geographic, or in terms of an investment portfolio.<\/p>\n But Reservoir Media is living proof of this adage, as the firm\u2019s execs note its capacity to invest in different markets around the world, and in vastly different genres, as a key way to maintain the business’s strength in potential future economic upheavals.<\/p>\n \u201cWe’ve not only grown our catalog in fiscal 2023, but I’m really pleased about how we’ve added diversity across heroes and genres, which further insulates our business from broader market swings. Overall, we have not slowed down in our plans to build upon our robust roster of talented artists and creators,\u201d Khosrowshahi said on the call.<\/p>\n That catalog is something to behold: According to an investor factsheet the company published earlier this year<\/a>, Reservoir had spent $695 million<\/strong> on music catalog M&A as of the end of 2022.<\/p>\n Aside from the acquisition of De La Soul\u2019s catalog, which brought the hip-hop group\u2019s music to streaming platforms for the first time, Khosrowshahi stressed Reservoir\u2019s deal with hip-hop producers Marley Marl and Mannie Fresh<\/a>.<\/p>\n \u201cWe’ve not only grown our catalog in fiscal 2023, but I’m really pleased about how we’ve added diversity across heroes and genres, which further insulates our business from broader market swings.”<\/p>\n Golnar Khosrowshahi, Reservoir Media<\/span><\/p><\/blockquote>\n Reservoir also expanded its portfolio of songwriter and producer Dennis Lambert\u2019s work, giving the company rights to such hits as Jefferson Starship\u2019s We Built This City<\/em> and Nightshift<\/em> by the Commodores.<\/p>\n Plus, the company expanded its country music roster with a publishing deal with Christian Stalnecker, who co-wrote the hit Thank God<\/em> by Kane Brown and Katelyn Brown.<\/p>\n \u201cWe also continue to bolster our catalog with the additions of jazz legend Sonny Rollins; swing icon Louis Prima; and Rock and Roll Hall of Famers, Matt Sorum, Phil Manzanera and Dion,\u201d Khosrowshahi noted.<\/p>\n But it\u2019s not just genre diversity that matters to Reservoir; geographic diversity is a major part of the company\u2019s strategy.<\/p>\n Besides the ambitious target Reservoir has set for its MENA acquisitions, Khosrowshahi emphasized \u201ca notable expansion of our rights into Latin American music\u201d with the recent conclusion of a deal with Miami Sound Machine co-founder<\/a> and lead songwriter Kiki Garcia, who wrote the band\u2019s hit song Conga<\/em>.<\/p>\n
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\n1. Reservoir wants to be \u2018the largest holder of Arabic music copyrights\u2019<\/b><\/h6>\n
\n2. Diversity is a key driver of the company\u2019s success<\/b><\/h6>\n
\n3. AI isn\u2019t a threat to Reservoir\u2019s business model – it\u2019s an opportunity<\/b><\/h6>\n