Reservoir Media (NASDAQ: RSVR) generated $27.1 million during Q4 2021, and CEO Golnar Khosrowshahi relayed that the New York City-based company has “$3 billion worth of deals in the pipeline.”
These and other noteworthy operational specifics came to light in the newly released Q4 2021 – and Q3 FY 2022 – earnings report from Reservoir, which arrived on NASDAQ in late July of 2021. As mentioned, the 15-year-old entity generated $27.1 million during the three-month stretch, up 25.9 percent year over year when factoring for existing and acquisition-related income alike.
Within the total, publishing revenue came in at $18.4 million (up 3.7 percent YoY or 22.3 percent after “adjusting for a one-time settlement received in the prior year period”), and recorded-music income, at $8.1 million, jumped nearly 150 percent from Q4 2020’s $3.3 million. (Reservoir acquired Tommy Boy Music in June of 2021 and has since purchased the song rights of Tom Werman, Dallas Austin, and Travis Tritt, to name some.)
Bearing in mind these catalog investments, Reservoir says that its recorded-music showing surged in digital, with revenue of $4.9 million in Q4 2021 (up from $1.5 million in Q4 2020).
Physical recorded-music income improved from $1.2 million to $1.3 million across the quarters, with a $200,000 increase for neighboring rights ($700,000 total in Q4 2021) and a $1.1 million jump for sync ($1.2 million total).
Reservoir’s operating income slipped 18.7 percent YoY, to an even $4 million, and higher-ups attributed the falloff to “a rise of $1.3 million for share-based compensation and approximately $1.0 million in costs associated with being a public company.”
The previously highlighted hike in recorded-music revenue contributed to an 11.3 percent YoY boost for OIBDA (totaling $9 million), against flat net income ($2.4 million). For the entirety of the 2022 fiscal year – or the 12 months ending on March 31st – Reservoir has upped its forecasted revenue to between $103 million and $105 million.
Perhaps the most interesting component of the performance analysis from Reservoir – which represents some 140,000 copyrights and 36,000 masters – concerns the initially mentioned sum of the company’s unannounced deals. The business also intends to drop $200 million on mergers and acquisitions during its first year on the stock market, according to Reservoir founder and CEO Golnar Khosrowshahi.
“Our strong third fiscal quarter financial performance demonstrates how we are capitalizing on the growth in the music industry and generating significant value by executing on our strategy of building a robust, curated, and diversified portfolio of award-winning songwriters’ and artists’ bodies of work,” Khosrowshahi said in part.
“As part of this, we expect to deploy over $200 million in strategic M&A during our first year as a public company. … We are honored that these incredibly talented artists and creators entrusted us to be stewards of their life’s work. We have $3 billion worth of deals in the pipeline, and the cash generating nature of this business will continue to fuel these high growth, high operating leverage opportunities as we move forward.”
Reservoir stock was trading for $6.01 per share at the time of this piece’s publishing – down just over 25 percent in 2022 and nearly 45 percent from the same point in February of 2021. Earlier this month, the company unveiled a worldwide publishing deal with writer-producer Warren “Oak” Felder.