Acquisitive music company Reservoir Media has recorded a 19% jump in revenue in its latest quarterly report, attributing the strong results to higher subscription fees at streaming services, recovery of underpaid royalties, and its ongoing catalog acquisitions.
The New York-headquartered company reported $42.3 million in revenue for its fiscal Q3 2025, which corresponds to calendar Q4 2024 (ended December 31).
That’s an increase of 16% YoY on an organic basis or 19% YoY when including catalog acquisitions.
Operating income came in at $9.6 million, an increase of $3 million from the same quarter a year earlier. Net income was $5.3 million, amounting to earnings per share (EPS) of $0.08. That compares to a net loss of $2.9 million ($0.05 per share) a year earlier.
Reservoir’s adjusted EBITDA for the quarter amounted to $17.3 million, up 26% YoY, while OIBDA came in at $16.3 million, also up 26% YoY.
“Our third fiscal quarter marks another strong period of growth across both the top and bottom lines of our business,” Reservoir Founder and CEO Golnar Khosrowshahi said.
“With our team’s expertise and strong relationships across the industry, Reservoir consistently ushers in accretive opportunities that further shape our catalog and roster of talent into a diverse and valuable portfolio.”
The company has continued its run of catalog acquisitions, which over the past year included works owned by Lastrada Entertainment, a catalog of 5,600 compositions from the 1960s onward.
It includes hits such as Captain & Tenille’s Love Will Keep Us Together and the Whispers’ And The Beat Goes On. It also includes songs performed by the likes of Neil Sedaka, Dolly Parton, Eminem, Notorious B.I.G., and Leon Bridges.
“Reservoir consistently ushers in accretive opportunities that further shape our catalog and roster of talent into a diverse and valuable portfolio.”
Golnar Khosrowshahi, Reservoir Media
Reservoir also acquired the catalog of Lebohang Morake, perhaps best known as the composer of Circle of Life from Disney’s The Lion King.
The company also acquired the producer royalties of Grammy winner Jack Douglas, which includes hits by Aerosmith and Cheap Trick, and the catalog of songwriter/guitarist Billy Strange, known for his work with Elvis Presley.
“We continue to maximize the impact these deals have on our business with our prudent cost management and value-additive practices, and we look forward to sharing our continued M&A momentum through the end of our fiscal year and beyond,” Khosrowshahi said.
Music publishing continues to be Reservoir’s largest source of revenue, coming in at $26.9 million in calendar Q4 2024, up 16% YoY. Digital accounted for the lion’s share of that, at $16.7 million, up 20% YoY.
Reservoir attributed the growth to “price increases at multiple music streaming services,” as well as catalog acquisitions. It noted that mechanical revenue jumped 143% YoY to $0.9 million, thanks to strength in physical music sales.
On the recorded music side, Reservoir brought in $12.0 million in revenue, up 20% YoY, with digital revenues jumping 24% YoY to $8.1 million. Synch rights revenue jumped 23% YoY to $1.0 million while neighboring rights fell 7% YoY to $0.9 million.
Reservoir said the growth in recorded revenue was thanks to “a royalty recovery related to underreported usage for a music catalog,” as well as growth in streaming subscribers and streaming subscription prices. The company didn’t disclose which of its catalogs had seen underreported royalties.
For the second quarter in a row, Reservoir increased its guidance for the full fiscal year.
It now expects revenues of $155 million–$158 million for fiscal 2025, which ends on March 31, 2025. That would be up 8% YoY at the mid-point. The company sees adjusted EBITDA at $61.5 million–$64.5 million, which would be a 13% YoY jump at the mid-point.
“Our year-to-date performance gives us the confidence to raise our guidance ranges as we go into our final quarter of the fiscal year,” Chief Financial Officer Jim Heindlmeyer said.
“Our third fiscal quarter demonstrates the resiliency of our cash flows and the strength of our roster, with year-over-year growth exhibited across many of our key financial metrics compared to the prior year.”Music Business Worldwide
