New York-based Reservoir Media generated revenues of $29.9 million in calendar Q4 2022 (its fiscal Q3 2023), up 16% compared to the $25.8 million generated by the company in calendar Q4 2021 (Reservoir’s fiscal Q3 2022).
This growth, according to new investor filings published on Wednesday (February 8) for the three months to end of December, was primarily driven by a 14% YoY increase to the company’s Music Publishing revenues, inclusive of the acquisitions of various catalogs.
It was also driven by the company’s ‘Other’ revenue segment, which increased 260% YoY to $2.2 million, driven by strong performance in Reservoir’s artist management business (the company manages artists through its ventures with Blue Raincoat Music and Big Life Management).
On an organic basis (i.e. discounting acquisitions), Reservoir says that its overall revenues grew by 7% YoY in calendar Q4.
Commenting on these results, Reservoir Founder and Chief Executive Officer Golnar Khosrowshahi noted that, “Reservoir is strongly positioned to capitalize on the positive consumption and monetization trends in the global music industry, even amid a challenging macro-economic environment”.
Added Khosrowshahi: “As we close out our fiscal year, our focus remains on identifying and executing on value-enhancement opportunities for our current roster while expanding our portfolio to drive top-line expansion.”
Reservoir Chief Financial Officer Jim Heindlmeyer, added that, “given the momentum” in the business, Reseroir has made the decision to raise the midpoint of its guidance for both revenue and adjusted EBITDA for the full fiscal year.
“Our business is resilient, and we are confident in our ability to execute against these improved expectations,” he added.
Reservoir’s filing reveals that its Music Publishing revenue in its fiscal Q3 2023 (Q4 2022) was $20.2 million, an increase of 14% compared to $17.7 million in Q4 2021 (the company’s previous fiscal year’s third quarter).
Growth was driven by strong results in the company’s Digital, Performance, and Synchronization subsegments, which increased 29%, 28%, and 51%, respectively.
The growth in the wider publishing segment was partially offset by a decline in Mechanical and Other revenue.
The company’s total recorded music revenues in calendar Q4, 2022 were $7.6 million, an increase of 1% YoY compared to $7.5 million in calendar Q4 2021.
Reservoir reports that this 1% improvement was largely driven by strong Digital and Neighboring Rights revenue, which increased 17% and 43%, respectively.
Growth in the Recorded Music segment was partially offset by declines in Physical and Synchronization revenue.
‘Digital’ contributed $5.3 million to Reservoir’s recorded music revenues in calendar Q4 2022, up 17% YoY.
Physical revenue was down 12% YoY, from $1.3 million in calendar Q4 2021, to $1.1 million in calendar Q4 2022.
In terms of profitability, Reservoir reports that its operating income (see below) in calendar Q4 was $4.6 million, up 71% YoY compared to its operating income of $2.7 million in calendar Q4 2021 (fiscal Q3 2022).
Some recent highlights noted by Reservoir in its filing include plans to bring De La Soul’s entire back catalog to digital streaming services for the first time ever on March 3, 2023.
The company also recently acquired the publishing catalog of Rock and Roll and Grammy Hall of Fame inductee Dion Francis DiMucci, professionally known as Dion.
“As we close out our fiscal year, our focus remains on identifying and executing on value-enhancement opportunities for our current roster while expanding our portfolio to drive top-line expansion.”
Golnar Khosrowshahi, Reservoir
Golnar Khosrowshahi, Founder and Chief Executive Officer of Reservoir, said: “Our third quarter results demonstrate the consistent growth profile of our business model as we delivered another quarter of double-digit top-line growth driven by robust demand in our Music Publishing segment.
“The additions of catalogs, including Dion and Leroy Clampitt, as well as our recent announcement of bringing De La Soul’s full iconic catalog to digital streaming services, will allow us to continue our momentum as a leader in the music industry and bring our deep roster of talent to more audiences around the world.
Khosrowshahi added: “Reservoir is strongly positioned to capitalize on the positive consumption and monetization trends in the global music industry, even amid a challenging macro-economic environment.
“We are excited about the future of music in the U.S. and our efforts in emerging markets with PopArabia to bring new music across borders. As we close out our fiscal year, our focus remains on identifying and executing on value-enhancement opportunities for our current roster while expanding our portfolio to drive top-line expansion.”
Jim Heindlmeyer, Chief Financial Officer of Reservoir, added: “We achieved strong top-line performance and continued to execute at a high level against our strategic growth plan.
“The inherent operating leverage created by our business model continues to materialize as OIBDA and Adjusted EBITDA margins improved during the quarter.
“Given the momentum in our business, we are raising the midpoint of guidance for both revenue and adjusted EBITDA for the full fiscal year. Our business is resilient, and we are confident in our ability to execute against these improved expectations.”Music Business Worldwide
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