- Revenue: $39.1 million for Q4, a 12% increase YoY; $144.9 million for fiscal year 2024, an 18% increase YoY.
- Music Publishing Revenue: $26.4 million for Q4, a 14% increase YoY; 15% growth for fiscal year 2024.
- Recorded Music Revenue: $11.2 million for Q4, a 3% increase YoY; 22% growth for fiscal year 2024.
- Organic Revenue Growth: 8% for Q4; 12% including acquisitions.
- Operating Income: Record-setting for the full year.
- OIBDA: $15.1 million for Q4, a 5% increase YoY; $49.6 million for fiscal year 2024, a 15% increase YoY.
- Adjusted EBITDA: $16 million for Q4, a 6% increase YoY; $55.6 million for fiscal year 2024, a 20% increase YoY.
- Net Income: $2.9 million for Q4, up from $2.3 million YoY; $800,000 for fiscal year 2024, down from $2.8 million YoY.
- EPS: $0.04 for Q4, unchanged YoY; $0.01 for fiscal year 2024, down from $0.04 YoY.
- Interest Expense: $5.2 million for Q4, up from $4.2 million YoY; $21.1 million for fiscal year 2024, up from $14.8 million YoY.
- Cost of Revenue: 16% increase YoY for Q4; 16% increase YoY for fiscal year 2024.
- Administration Expenses: 19% increase YoY for Q4; 28% increase YoY for fiscal year 2024.
- Performance Revenue: 73% increase YoY for Q4; 37% increase YoY for fiscal year 2024.
- Digital Revenue: 11% increase YoY for Q4.
- Synchronization Revenue: 147% increase YoY for Q4.
- Physical Revenue: 34% decrease YoY for Q4.
- Liquidity: $132.3 million at year-end, including $18.1 million cash on hand and $114.2 million available under revolver.
- Total Debt: $330.8 million at year-end, net of $5 million deferred financing costs.
- Fiscal 2025 Guidance: Revenue expected to be $148 million to $152 million; Adjusted EBITDA expected to be $58 million to $61 million.
Release Date: May 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Reservoir Media Inc (RSVR, Financial) posted an 18% increase in revenue for the fiscal year, with 15% and 22% growth in music publishing and recorded music segments, respectively.
- The company added several award-winning artists and songwriters to its catalog, contributing to 10 Grammy Awards across six genres and 42 number ones on Billboard's charts.
- Reservoir Media Inc (RSVR) successfully utilized AI to increase revenue by tracking and identifying more uses of its copyrights across digital platforms.
- The company finished the year with a strong fourth quarter, showing healthy organic revenue growth of 8% or 12% including acquisitions.
- Reservoir Media Inc (RSVR) has a robust pipeline with over $1 billion in consideration and is in a solid financial position to continue executing transactions with high ROI.
Negative Points
- Net income for fiscal 2024 decreased to $800,000 from $2.8 million last year, primarily due to losses on the fair value of interest rate swaps and increased interest expense.
- The company's administration expenses for fiscal 2024 increased by 28% from the prior year, partly due to a write-off of recoupable legal expenses and inflationary cost increases.
- Interest expense for the full fiscal year increased by 43% compared to the previous year, largely due to a higher debt balance and increased SOFR.
- Synchronization revenue in the publishing segment decreased by 14% in the fourth quarter, primarily due to writer and actor strikes causing production delays in the television and film industries.
- The company's guidance for fiscal year 2025 reflects a more conservative outlook, with expected revenue growth of only 4%, partly due to the impact of Spotify's recent accounting changes.
Q & A Highlights
Q: You paid down $11.5 million of debt. Was there anything driving that decision other than typical capital allocation decisions?
A: Jim Heindlmeyer, CFO: It was part of our ongoing cash management and balance sheet management. It had nothing to do with deal flow or a shortage of opportunities.
Q: Did the pipeline decrease from $2 billion to $1 billion?
A: Golnar Khosrowshahi, CEO: Yes, that's correct.
Q: Can you provide any color on your M&A outlook for fiscal year '25?
A: Golnar Khosrowshahi, CEO: We are optimistic about the deal flow. The pipeline is robust with interesting off-market opportunities. We continue to see assets trading in the mid to high teens, and we are executing well below that.
Q: How do you see the top-line growth rate breaking down between the two segments for fiscal year '25?
A: Jim Heindlmeyer, CFO: We factor in various elements, including the Spotify bundling issue and the release of De La Soul's catalog in fiscal '24. We operate with a certain level of conservatism in our guidance.
Q: Can you dig deeper into the change in the pipeline from $2 billion to $1 billion?
A: Golnar Khosrowshahi, CEO: A couple of larger deals have moved, but we still see ample deal flow for our appetite.
Q: Why is the fiscal year '25 outlook lower compared to the organic growth in fiscal '24?
A: Jim Heindlmeyer, CFO: Factors include the non-recurring release of De La Soul's catalog and the impact of Spotify's bundling changes. We also operate with a level of conservatism until we get further into the year.
Q: How do you view the payoff for AI and machine-learning investments?
A: Golnar Khosrowshahi, CEO: It's a mix of both revenue generation and cost savings. AI helps us become better at licensing and mining the catalog, directly linking to revenue generation.
Q: Do higher interest rates impact the pace of M&A?
A: Golnar Khosrowshahi, CEO: Based on our current pipeline and targets, we still see opportunities that provide ample returns, so we don't see a material change in the intermediate term.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
