Reservoir Media revenue grew 46% to $24.3 million with the help of acquisitions of publishing catalogs and master recordings in its first fiscal quarter ended June 30, 2020. Music publishing and recorded music increased 35% and 80%, respectively, year over year. Removing the impact of acquisitions, organic growth was 14%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved to $7.4 million, up 73% from the prior-year quarter.
Looking forward, Reservoir did not change its previous guidance for the fiscal year ending March 31, 2023 — 10% revenue growth to $116 to $121 million and 10% growth in adjusted EBITDA to $44 to $47 million.
The quarterly gains were enough for Reservoir’s share price to rise 4.5% to $6.67 Friday morning despite the unchanged guidance.
“We are off to a strong start for the fiscal year, exceeding our internal expectations for the first quarter and putting us on track to achieve our goals for the year,” said Golnar Khosrowshahi, founder and CEO. Khosrowshahi attributed the strong quarter to “strategic growth initiatives, as well as the benefits of increasing scale.”
Music publishing revenue rose from $12.2 million to $16.4 million. Digital royalties grew 28% to $8.5 million and was publishing’s largest revenue source. Performance royalties improved 33% to $3.5 million. Synchronization revenues climbed 70% to $3.3 million. Mechanical royalties grew 7% to $500,000. In the last year, Reservoir acquired the publishing catalogs of hip-hop producer Larry Smith, country singer Travis Tritt, songwriter-producer Dallas Austin and dance and pop songwriter-producer Fred Rister, among others.
Recorded music revenue climbed from $4.2 million to $7.6 million. Reservoir’s acquisition of record label Tommy Boy Music in June 2021 was the most notable acquisition that helped drive recorded music growth. Tommy Boy’s 6,000-song catalog includes music of House of Pain, Coolio, Queen Latifah and De La Soul. Digital royalties, which rose 62% to $4.6 million, accounted for 61% of Reservoir’s recorded music royalties. Neighboring rights — the public performance rights for sound recordings — was the greatest gainer with a 109% improvement to $700,000. Physical revenue improved just 34% to $1.3 million.