Reservoir Media Q3 Earnings Call Highlights

Reservoir Media (NASDAQ:RSVR) reported fiscal third-quarter 2026 results ended Dec. 31, 2025, highlighting continued catalog acquisitions, streaming-driven digital growth, and raised full-year guidance as the company heads into its fourth fiscal quarter.

Quarterly performance and growth drivers

Founder and CEO Golnar Khosrowshahi said the company “continue[d] to execute” its strategy with a focus on deepening relationships with top-tier talent, investing in emerging hitmakers, and expanding in emerging markets. She said organic growth increased 5% year-over-year, reflecting demand for Reservoir’s catalog.

During the quarter, Reservoir posted a 12% increase in music publishing revenue and an 8% increase in recorded music revenue versus the year-ago period. Management attributed growth in both segments to acquisitions, increased digital revenue, and continued growth in music streaming services.

Khosrowshahi also highlighted recent Grammy recognition, noting Reservoir’s roster contributed to 10 wins across multiple genres.

Catalog acquisitions and talent partnerships

Reservoir emphasized diversification across “iconic catalogs” and newer creators. In the quarter, the company announced the acquisition of publishing and recorded music rights for Bertie Higgins, adding songs including “Key Largo” to its portfolio. Khosrowshahi also reiterated the company’s September acquisition of the Miles Davis catalog and outlined plans tied to the official launch of Davis’s centennial year, including brand and advertising integrations, merchandise and licensing initiatives, planned releases with label partners, and live performances.

The company also announced new partnerships with Gladys Knight and T.I. Khosrowshahi said the agreement with Knight includes rights to income streams across publishing and master recording catalogs. The T.I. deal covers his publishing back catalog and future works, plus select recorded music interests, including master recordings, artist royalties, and neighboring rights.

Alongside legacy talent, Reservoir signed additional creators, including:

  • Say She She, under a global publishing deal covering past and future works
  • Allison Veltz Cruz, a country-pop songwriter with No. 1 hits and credits including Matt Stell, Tenille Arts, Jason Aldean, Luke Combs, and Lady A
  • Britten Newbill, with pop and R&B songwriting and producing credits including Cat Burns, Olivia Dean, Daya, and Meghan Trainor

Emerging markets push and joint ventures

Reservoir also described continued investment in emerging markets. The company extended its publishing agreement with Indian hip-hop artist Divine, now overseen through Reservoir’s recently launched subsidiary Pop India. Khosrowshahi said the partnership, originally signed in 2020 and including a joint venture with Divine’s umbrella company Gully Gang Entertainment, has supported talent development across India’s hip-hop ecosystem.

Additionally, Reservoir entered a joint venture with dancehall publisher Abood Music and Jamaican star Cordel Burrell. Management pointed to the enduring sampling value of “Coolie Dance Riddim” and said the joint venture will focus on acquiring catalogs and signing and developing Jamaican creators.

Khosrowshahi said the company’s emerging market strategy has been supported by “favorable acquisition multiples” and streaming growth rates that “continue to outpace both the U.S. and Europe.” In the Q&A session, management added that while some emerging markets can offer more favorable acquisition multiples, Latin market pricing was described as “pretty mature and on par with Western markets.”

Financial results: revenue, profitability, and leverage

CFO Jim Heindlmeyer reported fiscal third-quarter revenue of $45.6 million, representing 5% organic growth and 8% growth including acquisitions. Total costs increased 8% year-over-year, driven by higher administration expenses, cost of revenue, and amortization and depreciation, though Heindlmeyer said operating margins expanded given the revenue growth.

OIBDA rose 11% year-over-year to $18.1 million, while adjusted EBITDA increased 11% to $19.2 million. Interest expense was $6.6 million, up $800,000 from the prior year, reflecting increased borrowings to support M&A activity, partially offset by lower interest rates.

Net income was approximately $2.2 million compared with $5.3 million in the year-ago quarter. Heindlmeyer attributed the decline primarily to a loss on the fair value of swaps versus a gain in the prior-year period, as well as higher interest expense and changes in other income, partially offset by higher operating income and lower income tax expense. Earnings per share were $0.03 versus $0.08 a year earlier, with a weighted average diluted share count of 66 million.

By segment, music publishing revenue increased 12% to $30.1 million, which management said was driven mainly by higher performance revenue from hit songs and higher digital revenue tied to acquisitions and streaming growth. Recorded music revenue rose 8% to $12.9 million, helped by digital revenue growth, acquired catalogs, and increased neighboring rights revenue. That growth was partially offset by lower synchronization revenue due to the timing of licenses.

On the balance sheet, cash flow from operating activities increased $5.1 million year-over-year to $38.2 million, aided by higher OIBDA and working capital. Total liquidity was $114.8 million, consisting of $20.6 million of cash and $94.2 million available under the company’s revolver. Total debt ended at $452.3 million (net of $3.6 million of deferred financing costs), for net debt of $431.7 million, up from $366.7 million as of March 31, 2025.

Guidance raised; M&A pace expected to continue

Reservoir raised its fiscal 2026 guidance. Full-year revenue is now expected in a range of $170 million to $173 million, up from $167 million to $170 million previously, which the company said implies 8% growth at the midpoint versus fiscal 2025. Adjusted EBITDA guidance increased to $71.5 million to $73.5 million from $70 million to $72 million, representing more than 10% growth at the midpoint.

In the Q&A, management said it anticipates continued M&A activity in the fourth quarter “at the same clip,” while noting timing can shift. Khosrowshahi also said Reservoir has not seen a “material change” in weighted-average acquisition multiples versus its historical experience.

Addressing seasonality and comparisons, Heindlmeyer said the prior year included royalty recoveries tied to completed audits in both the third and fourth quarters, and management is not expecting anything similar in the current fourth quarter. He also said quarter-to-quarter variation in G&A can be influenced by the company’s “small other segment” related to management business commissions, while underlying G&A trends otherwise reflect normal inflationary pressures.

Looking further out, management cited both tailwinds and uncertainties for the broader industry, including uncertainty around the CRB process alongside subscription growth, emerging market expansion, and price increases across streaming platforms. Khosrowshahi said the company believes the net impact remains positive for continued music industry growth.

Reservoir closed the call by saying it expects to share full fiscal year results later in the spring.

About Reservoir Media (NASDAQ:RSVR)

Reservoir Media Inc is a global independent music rights management company that acquires, administers and monetizes music publishing and master recording assets. Its business model centers on building a diverse portfolio of copyrights and recordings across genres, then generating revenue through licensing, royalty collection and direct-to-fan initiatives. Reservoir’s catalog includes works by established and emerging songwriters and artists, spanning pop, rock, country, R&B and other contemporary styles.

The company operates two primary segments: music publishing and recorded music.

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