RSVR - Earnings call 3 2024 | Reservoir Media, Inc.

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Operator

Good morning, everyone and thank you for participating in today's conference call to discuss Reservoir Media's Financial Results for the third quarter of fiscal year 2024 ended December 31, 2023, [Operator Instructions] I would now like to turn the call over to Ms. Jackie Marcus with the Alpha IR Group will review our agenda today and the company's forward-looking statements. Jackie?

Jacqueline Marcus

Thank you, operator. Good morning, everyone, and thank you for participating in today's earnings conference call. press XXXX results earlier ended a quarter its this issued fiscal of December Media release for with third morning. Reservoir XX, XXXX,

earnings access did release, website Relations at you not a our of If receive section of you from it our may investors.reservoir-media.com. the Investor copy press

and Financial me Officer. With Founder today's and Officer; are call Executive on Jim Khosrowshahi, Golnar Chief Heindlmeyer, Chief

our be website. is recorded this As call being Relations simultaneously section and Investor a of archived and will on the reminder, webcast

Before call a Jim, that views forward-looking and the events about I like today's I'd as future reflect and media that and contain risks and uncertainties. turn our such Golnar to over performance certain business, will to current note take reservoir statements financial of discussion involve

and good Our there them. projections we believe basis in a are and expressed is faith, reasonable for expectations, beliefs

our filings no in result and our other can our be uncertainties or However, information beliefs to for and Securities cause actual differ expectations, on the achieved. discussion. factors described more results assurance earnings and Please be from will today's specific materially our there beliefs to risk with Exchange and refer our that could projections and Commission that projections release the press expectations,

these except future this law. applicable as statements that or of update extent we no a or Any information as forward-looking earnings the result new events, make call statements release undertake required our to obligation are on of press in today, to we by and

certain they GAAP or useful believe that not investors investors in business our are if In this plan performance generally better understand present accepted help measures addition with or to we trends. accounting do accordance call we presented U.S. to they if to believe results to financial principles, will during conform we to the financial

Golnar? Golnar. these the in to now over to to earnings GAAP non-GAAP included turn like financial the call I our are of release. measures comparable measures nearest press would Reconciliations

Golnar Khosrowshahi

Jackie. thank you for us joining you, today. morning, Thank Good everyone, and

a Before recognize Grammy diving songwriters fiscal artists third take and moment to in want to past home performance into our Sunday. brought our the Awards this quarter, I who

impressive a best roster Killer and wins, and by a best categories, Our the Mike XX album, and SZA. Mitchell's folk Khris including by the of wrap caliber we across XX across nominations Reservoir. song an XX are sweep Their Joni contributed R&B represent collaboration, categories Riddick-Tynes Grammy nominations earned at for testament to wins Snooze talent to X

marker for the seen roster another accolades, activity these success on charts. our of is Beyond consumption and by

Reservoir for for top As a by quarters Billboards XXXX. reported market XXX quarterly, earned XX hot share far publishers reported the X calendar so

streams by today's validate audio our and strategy and confirm co-written the top These team's [ on-demand by a generating developing Snooze signing Khris XXX over and chart consistency year, of our the consumed X.X effectiveness Riddick-Tynes, in of billion staple One and talent over SZA was last hitmakers. the our ]songs, co-produced achievements top of Hot alone. roster

growth album report, in Moving XX% streams year-end its downloads we report measurement as mirroring industry growth growth issued growth Illuminate which total by XX% the tracking volume that consumption, third strong underpinned quarter, total in current XX% our This song and well financial music organic to volume in includes for growth U.S. an year-over-year as the album highlighted streams, continue consumption. airplay in year-over-year on-demand over and sales, globally industry. numbers, performance total XXXX. catalog healthy for operational to music music of wider the platform fiscal standard

over X/X consumption. of its in As anniversary, contributing Hip Hop lead celebrated streaming the genre U.S. consumption continued others XXth to all all to

further strong growth annual invest intent in in figures Latin audio the efforts genres U.S. of country genres and reported Additionally, the another These the to calendar streams than year on-demand XXXX. XX% these more are Luminate in of in both our

of Willy Stalnecker country Ragosta, Included and investments Armani Hip-Hop and Producer, the and the influential Latin Co-Founder, Brent Sound Mannie producer, the Luminate's Moreover, songwriter Mar, and White, ]; producer, country Kiki Perez; India [indiscernible] Fresh; Rob additions music Willianez Christian songwriter Machine streaming highest as report overtake Rapper producers for overall also in potential Miami with were [ these globally. and U.S. the Garcia. volume Rudy and the to suggests songwriters,

While total U.S. shy the any volume increased with rate, of At in the we $X.X see billion. just XXXX. nearly streams of of by U.S.'s country volume the in biggest year-over-year is nation India an on-demand the streams, India $XXX currently increase saw streaming that could U.S. music trillion the while increase surpass

reported more, from Z share music XXXX the nearly to XX% and than has and Hindi listener of Luminate Gen doubled music to also experience to up market noted more What's groups both XXXX, over that listen perspectives. cultures X% new language and to millennial new

in we accordingly its We investing in market this ground of we can the committed to enter support are to and XXXX, excited on across remain consume music and build world. the regional relationships as exportation by data. this opportunities And the implications to

third On delivered financial of of quarter, XX% the was which side, line growth XX%, for we top organic. the fiscal

over raise quarter our financial us shortly to remainder [indiscernible] Jim of also beat the and expanded the for again fiscal quarter, We guidance the as EBITDA for will adjusted resulting growth the results in of [ once year. in ] margins XX% of

music manage across to ability the our to those with grow addition, In during our an Along to emphasis genres. they lines, capital in our continued further further the we portfolio. demonstrate and business on quarter, invest business portfolio deploy various our diversifying

deals recent including more. a deal album Band, Kesha, released solo as of artists member Some Vulfpeck, and Theo has and with known collaborated across of wide a Jepsen, X founding best producer a Katzman, American Carly genres, of multi-instruments songwriter Theo Funk with [indiscernible] and range new publishing Rae our include

come music Australia collaborative and on future all with co-signing We aspects of worldwide the creative his administrative publishing project This Grentperez, career U.S., Grentperez's to the catalog music and Australian his companies deal beyond. of new heights works. sub-publisher Australian also entire announced Singer-Songwriter X to take a our who in together our for and sees

will PopArabia, Lastly, East analog Middle house in we million million she was XX the includes deal With actively across ] songs, media, most Her XXX respect streamed expanded entire production queen Musica, of XXXX future and evaluating pipeline in Lebanese The to and as social combined [ opportunities, that her our are growth aspirations. potential in multiple with presence of the [ achieving Arab her in than female with Superstar of moniker our Arab our With deal on the with of Spotify of we total artist more Nancy label solidifying a publisher plays ] conjunction Ajram. support works. a followers pop. deals

out billion respected will to We and $X for like numbers note full our to strength position Jim? reputation of like assets value I'd being initiatives market. and which of on a year Our does to in greater in partner roster us artists pipeline over closing some address catalogs We acquire achieving the our the new turn total for forward third to enhancement which prospective financial in our quarter remain allows not include fiscal fourth quarter regarded strong off-market a sits Jim with strong. to I'd value remain guidance, call detail. at deals, our the With also Jim and joining highly shortly. discuss through look opportunities roughly the that, a that for proven steward best to our

Jim Heindlmeyer

double-digit in Thank you, growth headlined both EBITDA adjusted of pleased to of segments fifth strong by of meaningful business results, everyone. revenue Golnar, financial good our and and morning, We're quarter report quarter improvement. another consecutive our

Our consistent both quarter the growth accomplishments represent bottom commitment Reservoir's in to lines. top on and

the in fiscal Turning a quarter $XX.X versus which business XX% highlighted when the prior music. our increase acquisitions. both was by results. quarter million, growth a increase Revenue was segments, to third by including This XX% recorded was year-over-year in quarter driven for year

Turning to operating for our the quarter. expenses

Our catalog managers revenue due prior increased the quarter, year-over-year, the expenses higher driven in Amortization increased for overall to that and and for continued costs, higher revenue segment. the artist primarily depreciation spend by with higher cost recorded period year revenue compensation XX% our increased for year acquisitions. increased associated XX% music by higher fees Company versus marketing costs the driven quarter. XX% administration of versus prior

third the $XX.X year-over-year increased XX% to million. OIBDA In quarter,

million period loss strong in and per the fiscal driven decrease was loss the EBITDA expense adjusted increases $XX.X by $X.XX. by same driven XXXX offset growth non-GAAP versus share last million in loss you those of resulted to offset The used operating Net for who quarter net in common This For the million were stands expenses. year quarter revenue music improved of XX% year. quarter. that million. million the net are prior compared EBITDA third our interest $X.X Interest higher amortization. to of KPI to expense to rate fair in amortization interest or the for newer of industry a depreciation third a $X.X revenue Adjusted for $X.X as the loss margins, compared expense, a administrative was gross higher expense. administration but OIBDA as and by model, partially value swaps was the by year was our increased before partially both is and higher $X.X in on in OIBDA and business income the The higher well

the during $XX.X million. outstanding diluted average weighted quarter Our count was share

want the digital for starting revenue fiscal our with to revenue offset increased by partially sequential year. for XX% Physical was an in rights was revenue percentage of the Let's Publishing. decline revenue Music Recorded and segment, synchronization double-digit year-over-year third quarter increase revenue, I of driven the year turn revenue revenue. of an $XX.X increased compared improvement but XX% the third by performance versus X% revenue delivered Music quarter. by of This XX% our same segment increases, Publishing neighboring prior increase digital Music revenue quarter quarter, in gain respectively, increased notably compared generated quarter, by synchronization our XX% types year-over-year XX%. a Recorded third XXX% representing period notable segment led All XXXX. revenue to highlight in last performance segments. Music XX%, and Sync $XX the million a was which to in with X% million, a In and improvement the both to most and in

rider the which within our XXXX, advertising While to and in delays saw we actor due for performance our we the see schedules, in caused demand calendar in did in market. improvement strikes production catalog lumpiness

to normal. have return market full as synchronization very current schedules production we positioned both although to is promising. the through The the well strikes, work segments growth capture our to ad of And feel we yet across opportunities impact

revolver. our our of on ample with $XXX.X under of million, of total hand objectives. to liquidity continue sheet. strategic This quarter total available fund $XXX.X debt capital us comprised We our turning with the gives of cash million to the quarter to million balance million $XXX.X Now growth million deferred debt at and interest as million We which our to some closed $XX.X available of $XXX XXXX. was nearly of the which interest net of calendar $XXX.X debt XX, March to financing our $X.X costs, exposure net bringing net half rates in million hedged that debt reduced to We've year. of of cares attractive rates, of higher ended

have recently, more increases year. rate our in the we our begun to expect While communicate to level XXXX hedging off, calendar interest strategy interest

for quarter for we our both EBITDA Finally, our on third outlook XXXX I'd for results. remainder like fiscal the -- [ the to strong guidance the ] incorporate of and our revenue raising are touch

year from growth guidance between $XXX expect now For XX% XX.X% $XX to to to prior of million represents our our million, $XXX $XX $XXX range. the revenue, million growth which We million. we're range range to the EBITDA of This midpoint adjusted $XXX raising our midpoint. a million the be year-over-year of and million for at at represents

accretive expectations our responsible remain growth out forward of a capital look We within updated our deployment guidance making the Looking ahead, organic approach. for we strategy fiscal prioritizing year focused to maintain closing while on acquisitions, XXXX.

to I'll that, Golnar closing now back for remarks. call pass With the

Golnar Khosrowshahi

Thank you, Jim.

continues and as we rigor we committed a ahead, music dynamic the operating grow. industry economic remain look to the we backdrop navigate with business to As as

achieve We our revenue our confident financial which targets, adjusted and ability raised are to narrowed on EBITDA. been and in both have

Our remains segments. very and business pipeline active globally both across

flows, cash within predictable to and the that, will deals now for execute With expected we open profile. return well line questions. consistent of support continuing the anticipate we our With

Operator

the of [Operator from MKM. with Instructions] coming line ROTH first Now Richard question Baldry

Richard Baldry

And there then publishing. toward either a Or Or there's bias Given you or that's really the deal growth? both? on the the opportunities? international, you're Is are the about greater about initiation? focus it seeing maybe of talk it of blend internationally recording talk there pace can their maybe whether on what organic you terms is growth attractive? a themselves Or can

Golnar Khosrowshahi

mentioned. all I that it's of a you the Rich, combination factors think of

that we what and of are in growth like makes which markets consumption There us. by international those to pricing, so are revenues, in to that subscription promise returns. We the very cost will which that it grows, translate being ahead be develop position streaming the us. and for attractive able associated would captivating for be markets makes to is access a intrigued the and we as it numbers attractive grow execute how to makes grows that's thesis at as and to The on owners into content grow in of markets these future significantly the attractive platforms then

Richard Baldry

done ground? those right you something like sort be all or And the you more can add Do sort with you Is you better as of more do feet countries? of have in Do and those it to you need talk to can Or to go-to-market on in remotely? feel that have you model adequate in more the regions? that regions? get deals resources the reps

Golnar Khosrowshahi

developing allows already operation as extend to we us PopArabia, represent and Hence, which that the India, business. in [ in a region have markets. the MENA generally as have doing that and business have at on those move where relationships with ground ] reach people our idea forward. I'm proxy and by to ships do you the really in of developer well begun We talent to not subscribe fan those that big really feet

business feet because the et for those ground, the ground cetera. So much had it's artists feet and now. have we with It's this -- relationship-driven is catalog years several a very sellers, on have to important on and

So we execute are here. very well positioned to

Richard Baldry

from think you looking rolling qualitatively halfway recognizing organic a feel various you do the still recognition that's we settlements estimate Is for side pretty royalty the table, Do that into a How or -- at into as And increases you about how feel understanding. the of 'XX-'XX? sort that of a far can like even, good you're driver? tailwind that? or maybe rate do like you're

Jim Heindlmeyer

Yes.

Rich. I is this think Jim, --

really the think those current December and estimating about increases, were of 'XX. So December we in I of think 'XX, when quarter position comparing December 'XX rate we we're still still data against quarter final visibility accounted much what We being X year the we X accruing in where CRB have current the would rates. that CRB under we're be. thought of obviously and real a

to MLC days, the CRB and that through after the DSPs look forward to flow tailwinds of where in June a to And So rights little holders growth the there's X are still rate a bit of that. organic to of within into, that QX our will full increase months the next couple we be helping current quarter. resolution of going year, see that quarter say, I that remitting let's those that few continue next our potentially the of it think the in will money and will

that, to increase my of those if that that will work as expectation So there. once lumpiness, rate the through be we kind the of end that is see will, you we related drops,

Richard Baldry

typical that And has would taking onetime QX the last with it's there should for [ year. seasonal or very that about one any just been sort Are out of typically conservatism? in unusual think think more guidance me. that ] we side I QX impacts this implies explain

Jim Heindlmeyer

Yes.

I ongoing think one our of that I've accruals. calls, mentioned this some is previous we how of improving focuses on handle but our

the And flattening we of that, accuracy quarter seeing that's ongoing go lower see our quarter-over-quarter quarters. revenue nothing and psychs couple naturally through some significant the our quarter improving to will now accruals. of there a smoother business, we're You're And that, fluctuations. seeing have think of in March some and goal quarter-over-quarter in this to a obviously how that in is with and be accounted And can if performance lags back see of partly really June as what particular cadence us. I why we lead the that There's the a our in in And think go are much aware will guidance, is, I bit September you to third the the an adjusted of in see full higher you our the little valleys part needs third we that be revenue. And reflected year our in guidance. you that's of reason you quarter for increases when also called that out. December years,

Richard Baldry

congrats and a on good Thanks quarter.

Operator

question next from with Our coming of Fuhrman line the Alex Craig-Hallum.

Alex Fuhrman

has gone the my a some investors to the Reservoir and makes mind or some that, since year reported bit you out quarter. full then of and business QX strong it's your talk very little quarter this company, your be that a significantly raising to Can QX to that you often here? crossed strong Jim, what you different you've into confidence have may guidance and been caution earnings view revenue pulled public what gives really pretty a really here extent, on the halves and upcoming about quarter

Jim Heindlmeyer

we only one Well, -- until quarter the the we're end are of year.

the So as end of closer that's think get we continue. in that, the where more something to will that obviously, will year, And have we we confidence year. I we end the

visibility the and year, year. of we higher close where we will end have we end to As get confidence the always better the will in

the that we we that's a think pulled strong as something from at type And where whether forward being in not digital really with revenue performance, that synchronization to saw in very respect I look strong very QX, had QX. we related just to advertising. or it's revenue

raise in the QX, do outperformance and QX. guidance in we So confident able will we to reflect in remain to we our how were

Alex Fuhrman

about the social Golnar, maybe see or do helpful. you a to particular, And recently to then industry really on better paid over is opportunities of media has that on TikTok, used social there and of channel lot change your And music use been monetize the been any there's in headlines time? how music That's Okay. media? for for

Golnar Khosrowshahi

goes some -- been We with use can music always And obviously, in that compensated legal media use place. blank we the stand we well platforms will additional have think licensing through and our an distributed are us. continue have these both is that the that with thrive I continue far for. licensed that place showing times, fairly history the issue of a that is platform as where times has Alex, platforms and Universal's NMPA that these is music revenue bit with for -- -- we legally the a licensed get the stand and where lot content that can battle we're action ensured that actually the compensated social the music partnered rightsholders. as and in fight actually the of the and is such results a and to many and the user-generated It's fill put is area as that we where latest before content this in we of with songwriters to is in TikTok of to action NMPA sense can kinds and content be a quite other in happen latest to using with that, an going the legally as historically being

Operator

from Riley with Securities. coming And B. Day line question of the Dan our next

Daniel Paul Day

through The lot for a color rate of Spotify, XXXX. the me. I they others, CRB of a DSP hikes bigger appreciate Just a the throughout put on couple tailwinds. couple

rate and some referring as Just reflected think December price there's in you get out fully subscribers? more the still hikes you I'm to? to think do these quarter, Or were pushed more talent these the hikes whether

Jim Heindlmeyer

here. Dan, it's Jim

question. -- think of there's kind the I your to to with X So parts respect

improvements happy what's we no On regular looking years and obviously past of happened XX forward maybe are increase, year the are price very cadence increases, more there. looking having certainly price increases those we're with to more to over forward the we gone regular with with price XX, increases, price a

the quarter With we tailwinds being the X that to as estimating think year, we earlier, X in rates currently were CRB the we as comparing really seeing rates, CRB that are rates. prior some I and the I still under mentioned where under accounted the are

are a the months this forward DSP's CRB when there's think tailwind true-ups, X bit And tailwinds work that quarter, MLC of money those in so in we be coming that looking the there while the reflected final through. get which will to with to little as fully push the we we

Daniel Paul Day

Great. Okay.

for me, question Another kind one. level of higher

currently either AI there? current anything enhance you're generative else roster behind you're your And using potential future about tools using of and really how impact of wondering songwriters, generative thinking would mentioning AI investing or just songwriting anything the or to the maybe you it's these productivity worth think be about Just industry great. any on

Golnar Khosrowshahi

Sure.

songwriters misinterpretation existence bit are noise lot around in tools. things of there of a are that far and tools way threatening is already -- goes, of the to there's as we and these not are seeing lot that of the we tools, using there the result side a enhance are that that think in develop we these are efficiencies positive of of outcomes and a so as production themselves. who a that think studio, a are I in have songwriter seeing that in of these I And little

that tools in product our team, we the We is department that deal important through our being rights IP, based all an seeing are compensation of these the as tools IP about songwriters et that cetera, efficiencies well to are that that ensure there. ourselves are us. for and then very And IP greater existing AI not some -- and and is develop will and champion in on well recognition we new the developments kinds marketing legal to internally using as in through using obviously used developments, how our business, obviously that for informed of is very we area are so is existing far of as that

Operator

Khosrowshahi time. further I at any back to now the closing this Golnar Thank over will call questions you, for not I'm any turn in the queue remarks. showing

Golnar Khosrowshahi

joined us. and who Thank you, to operator, everyone

of We forward are across and proud honor artists most and year you. look genres updating full our producers work eras, you songwriters, important fiscal of to performance. with and Thank to we some music's on and

Operator

participation. and that for for conference Ladies today. conclude you our gentlemen, Thank does your

You now disconnect. may

Reservoir Media (RSVR) 7 Feb 242024 Q3 Earnings call transcript