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RM

Reservoir Media, Inc. (RSVR)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 revenue grew 12% year-over-year to $45.4M, with 7% organic growth and 5% from acquisitions; Adjusted EBITDA rose 10% to $19.4M, and diluted EPS improved to $0.03 .
  • Recorded Music led with 21% YoY revenue growth, driven by digital and synchronization; Publishing rose 8% YoY, supported by strong performance and mechanical revenue .
  • Full-year FY26 guidance was raised and narrowed: revenue to $167M–$170M (midpoint +6% YoY), Adjusted EBITDA to $70M–$72M (midpoint +8% YoY) — a clear positive catalyst .
  • Strategic portfolio expansion (Miles Davis catalog, Nick/Molly Drake, MENA deals via PopArabia) and internal value-enhancement efforts underpin growth and visibility into H2 .

What Went Well and What Went Wrong

  • What Went Well

    • Strong top-line growth with 12% YoY revenue and 10% YoY Adjusted EBITDA; organic growth came in at 7%, consistent with management’s baseline expectation .
    • Recorded Music posted 21% YoY revenue growth on digital (+20%) and sync (+106%), with OIBDA up 22% and a stable 51% margin .
    • Strategic wins with iconic catalogs (Miles Davis) and partnerships across geographies (MENA via PopArabia), reinforcing value-creation opportunities: “We are honored to partner with his estate ahead of his centennial year in 2026…” .

  • What Went Wrong

    • Higher interest expense ($6.7M vs. $5.0M YoY) and loss on foreign exchange weighed on net income, partially offset by reduced losses on swaps .
    • Publishing sync revenue declined due to timing of licenses, despite strong overall segment growth .
    • Net debt increased to $393.9M from $366.7M at March 31, reflecting acquisition activity and revolver usage; total debt rose to $421.8M .

Financial Results

Metric (USD)Q2 FY25 (Sep 30, 2024)Q1 FY26 (Jun 30, 2025)Q2 FY26 (Sep 30, 2025)
Total Revenue ($M)$40.7 $37.2 $45.4
Operating Income ($M)$10.1 $5.4 $10.7
OIBDA ($M)$16.6 $12.8 $18.2
Adjusted EBITDA ($M)$17.6 $13.9 $19.4
Net Income ($M)$0.2 $(0.6) $2.2
Diluted EPS ($)$0.00 $(0.01) $0.03
Consensus RevenueUnavailable (S&P Global)Unavailable (S&P Global)Unavailable (S&P Global)
Consensus EPSUnavailable (S&P Global)Unavailable (S&P Global)Unavailable (S&P Global)

Segment Revenue Breakdown

Music Publishing Revenue by Type ($M)Q2 FY25Q2 FY26
Digital$15.6 $16.1
Performance$5.1 $7.5
Synchronization$5.8 $4.6
Mechanical$1.1 $1.6
Other$1.0 $1.1
Total$28.6 $30.9
OIBDA$11.0 $11.3
OIBDA Margin (%)38% 37%
Recorded Music Revenue by Type ($M)Q2 FY25Q2 FY26
Digital$7.2 $8.7
Physical$1.5 $1.3
Neighboring Rights$1.1 $1.1
Synchronization$0.9 $1.8
Total$10.7 $13.0
OIBDA$5.4 $6.6
OIBDA Margin (%)51% 51%

KPIs and Balance Sheet

KPIMar 31, 2025Sep 30, 2025
Cash & Equivalents ($M)$21.4 $27.9
Revolver Availability ($M)$58.2 $124.2
Total Available Liquidity ($M)$79.6 $152.1
Total Debt ($M, net of deferred costs)$388.1 $421.8
Net Debt ($M)$366.7 $393.9
Cash from Operations (6M) ($M)N/A$25.3
Diluted Shares (Qtrly Wtd Avg) (M)N/A66.27

Non-GAAP Adjustments (Q2 FY26)

Adjustment ($M)Q2 FY26
EBITDA (pre adjustments)$17.45
FX loss add-back$0.387
Loss on fair value of swaps add-back$0.316
Share-based compensation add-back$1.113
Other (equity method losses) add-back$0.091
Adjusted EBITDA$19.357

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)FY 2026$164–$169 $167–$170 Raised & narrowed
Adjusted EBITDA ($M)FY 2026$68–$72 $70–$72 Raised & narrowed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 FY26)Current Period (Q2 FY26)Trend
Catalog acquisitions & value enhancementExpanded recorded label assets (Fool’s Gold), investment in Lightroom; pipeline >$1B Miles Davis publishing & recorded rights; Nick/Molly Drake extensions; pipeline >$1B Strengthening; high-profile assets drive visibility
Digital pricing tailwindsExpect benefit from Spotify price increases; Q1 digital publishing down due to timing Digital growth in recorded (+20%); organic growth baseline ~7% Positive pricing/streaming backdrop
Synchronization dynamicsPublishing sync strong in Q1; recorded sync timing headwind Recorded sync up (+106%) in Q2; publishing sync down on timing Timing variability; pipeline supports future
G&A/administration run-rateInflation pressures manageable; management revenue drives G&A; ~run-rate from Q2 onwards Q&A reiterates Q2 run-rate for balance of year Stable run-rate guidance
One-time event pipelineStrategic partnerships (Lightroom) and IP monetization opportunities Monster Mash film option; Miles Davis centennial activations over 12–18 months starting 2026 Building toward CY2026 contributions
Balance sheet/liquidityRevolver expanded to $550M; liquidity $173M at Q1 Liquidity $152.1M at Q2; net debt $393.9M Elevated leverage supports M&A; growing OCF

Management Commentary

  • “We grew 12% on the top line, with 7% from organic revenue and 5% from acquisitions… we welcomed the catalog of the iconic innovator and pop culture figure, Miles Davis.”
  • “OIBDA was $18.2 million… Adjusted EBITDA was also up 10% to $19.4 million… Interest expense was $6.7 million… driven primarily by a higher debt balance… and an increase in effective interest rates.”
  • “We are increasing and narrowing our revenue guidance range… to $167 million–$170 million… and Adjusted EBITDA guidance range… to $70 million–$72 million.”
  • “We have an active and robust deal pipeline of over $1 billion and look forward to sharing news of our next partnerships.”

Q&A Highlights

  • Organic growth drivers: Management views ~7% organic growth as baseline aligned with industry tailwinds, with value-add efforts on newly acquired assets; offsets can occur as hit songs cycle .
  • Miles Davis acquisition dynamics: Included in pipeline; not off-market; formal process after initial engagement with the estate in Nov 2023 .
  • OpEx implications for centennial initiatives: No structural step-up in administration; marketing resources reallocated internally .
  • One-time events timing: Monster Mash film and Miles Davis centennial expected to begin contributing in calendar 2026 over a 12–18 month activation window, with sustainable long-term benefits .
  • G&A run-rate: Management business drives quarterly variability; aside from that, Q2 represents expected run-rate for remainder of year .

Estimates Context

  • Wall Street consensus data via S&P Global for Q2 FY26 EPS and revenue were unavailable at the time of this analysis; as a result, we cannot mark beats/misses relative to consensus. Management stated results “exceeded our expectations” operationally and raised full-year guidance, indicating internal outperformance .
  • If estimates become available, we would reassess revenue/EPS relative to consensus to update beat/miss status (particularly given strong Recorded Music growth and raised FY26 guidance) .

Key Takeaways for Investors

  • Guidance raise is a tangible positive catalyst: FY26 revenue and Adjusted EBITDA ranges were lifted and narrowed, signaling confidence into H2 and potential upside to Street models .
  • Recorded Music strength is broad-based: Digital growth (+20%) and sync timing (+106%) drove 21% segment growth; margin held at 51%, underscoring scalable profitability .
  • Publishing momentum with improved performance/mechanical: Performance revenue (+47%) and mechanical (+51%) offset sync timing; margin modestly lower (37%) on cost/admin mix .
  • Portfolio quality and pipeline visibility: Miles Davis centennial initiatives, Monster Mash film option, and MENA expansion via PopArabia support medium-term revenue drivers starting CY2026 .
  • Balance sheet supports ongoing M&A: Liquidity $152.1M and expanded revolver capacity provide dry powder; leverage elevated but aligned with asset acquisition strategy and growing operating cash flow .
  • Near-term trading setup: Absence of consensus markers limits immediate beat/miss framing, but guidance raise and segment momentum should bias sentiment positively; watch for updates on centennial and sync placements.
  • Medium-term thesis: Diversified catalog, proven value-enhancement playbook, and emerging markets footprint position RSVR to compound cash flows and scale margins, with FY26–FY27 potential inflection from planned activations .