Reservoir Media Inc (RSVR, Financial), an award-winning independent music company, announced its financial results for the second fiscal quarter of 2024 on November 7, 2023. The company reported a 15% increase in total revenue, reaching $38.4 million, compared to $33.3 million in the same quarter of the previous fiscal year. This growth was primarily driven by a 22% increase in the Recorded Music segment, thanks to the acquisitions of various catalogs.
Financial Performance
Operating income for Q2 Fiscal 2024 was reported at $6.1 million, compared to $6.6 million in Q2 Fiscal 2023. The decrease was primarily due to higher administrative expenses, including a $2.7 million write-off of recoupable legal fees. However, this was partially offset by the 15% revenue growth compared to the year-ago period. Adjusted EBITDA for the quarter was up 24% to $15.9 million, as strong revenue growth from both segments was partially offset by higher administrative expenses.
Net income attributable to common stockholders in Q2 Fiscal 2024 was $0.7 million, or $0.01 per share, compared to a net income of $4.5 million, or $0.07 per share, in the year-ago quarter. The decrease in net income was driven by higher administrative expenses, primarily $2.7 million for the write-off of recoupable legal expenses and attorneys’ fees, as well as higher amortization and interest expense partially offset by higher revenue and improved gross margins.
Segment Review
Music Publishing revenue in Q2 Fiscal 2024 was $25.9 million, an increase of 8% compared to $24.1 million in Q2 Fiscal 2023. Growth was driven by strong results in Performance and Mechanical revenue, but partially offset by the decrease in Digital due to $2.1 million recognized in the prior year quarter related to the Copyright Royalty Board’s affirmed royalty rates for the 2018-2022 period.
Recorded Music revenue in Q2 Fiscal 2024 was $10.8 million, an increase of 22% compared to $8.9 million in Q2 Fiscal 2023. Growth in the Recorded Music segment was largely driven by the Chrysalis Music and Tommy Boy labels, particularly with strong Digital and Physical revenue growth, partially offset by lower Synchronization revenue.
Outlook for Fiscal 2024
Reservoir Media Inc (RSVR, Financial) has raised its financial outlook for fiscal year 2024. The company expects the financial results for the year ending March 31, 2024, to be as follows: Revenue between $133M - $137M, representing a 10% growth, and Adjusted EBITDA between $50M - $52M, also representing a 10% growth.
Jim Heindlmeyer, Chief Financial Officer of Reservoir, commented, “We are pleased to announce another quarter of strong performance, driven by meaningful top-line growth in both business segments. Our consistent progress against our strategic growth plan demonstrates the resilience of our business model and ongoing tailwinds from the growing music industry. As a result, we are raising both our revenue and Adjusted EBITDA guidance for fiscal 2024.”
Explore the complete 8-K earnings release (here) from Reservoir Media Inc for further details.
