Reservoir Media NASDAQ: RSVR reported double-digit revenue and adjusted EBITDA growth for fiscal 2026, as management pointed to catalog acquisitions, digital revenue gains and international expansion as key drivers of the music rights company’s performance.
Founder and Chief Executive Officer Golnar Khosrowshahi said Reservoir generated 11% revenue growth for the year, including 6% organic growth, while adjusted EBITDA rose 12%. She said fiscal 2026 was a “milestone year” in which the company deployed approximately $120 million across acquisitions and advances for both publishing and recorded rights.
“These results reflect the continued success of our disciplined acquisition strategy, the strengths of our catalog, and the performance of our growing team around the world,” Khosrowshahi said.
Fourth-quarter revenue rises 15%
Chief Financial Officer Jim Heindlmeyer said fourth-quarter revenue was $47.5 million, up 15% from the same period a year earlier. Growth was led by a 27% increase in recorded music revenue and an 11% increase in music publishing revenue, including the impact of catalog acquisitions.
Fourth-quarter OIBDA increased 16% year over year to $19.9 million, while adjusted EBITDA rose 16% to $21.2 million. Heindlmeyer said the adjusted EBITDA increase was driven largely by top-line growth, particularly in the digital category across both segments, partly offset by higher administrative expenses.
Net income for the quarter was $4.1 million, compared with $2.7 million in the prior-year quarter. Diluted earnings per share were $0.07, up from $0.04 a year earlier.
For the full fiscal year, Reservoir reported revenue of $175.7 million, above the top end of its previously stated guidance range. Music publishing revenue grew 9% for the year, while recorded music revenue rose 16%.
Adjusted EBITDA for fiscal 2026 increased 12% to $73.6 million, and OIBDA rose 12% to $69 million. Net income was $7.8 million, compared with $7.7 million in fiscal 2025. Diluted earnings per share were $0.13, compared with $0.12 in the prior year.
Digital and sync revenue support segment growth
In the fourth quarter, Reservoir’s music publishing segment generated $30.9 million in revenue. Digital publishing revenue rose 24% to $16.9 million, while synchronization revenue increased 6% to $5.8 million. Performance revenue declined 16% to $5.5 million, which Heindlmeyer attributed to category dynamics, while mechanical revenue increased 16% to $1.3 million.
The recorded music segment generated $15.2 million in fourth-quarter revenue, up 27% year over year. Digital revenue in recorded music increased 17%, driven primarily by subscriber growth and price increases at digital service providers, while physical revenue rose 35%. Synchronization revenue increased 161%, which Heindlmeyer said reflected the timing of licenses, and neighboring rights revenue rose 18% to $1.4 million.
Khosrowshahi said Reservoir’s sync business benefited from partnerships with brands including Anthropic, Volkswagen, Netflix, Lexus and Amazon, as well as placements in films and television projects such as “Hoppers,” “Happy Gilmore 2,” “The Fantastic Four: First Steps” and “Stranger Things.” She said sync revenue grew 5% in music publishing and 39% in recorded music for the year.
Catalog deals and international expansion highlighted
Khosrowshahi said Reservoir expanded and diversified its catalog across genres, eras and geographies during the year. In September, the company acquired the catalog of Miles Davis and has launched a global centennial campaign tied to the music and culture figure’s legacy.
The company also signed or extended relationships with contemporary and established creators, including Say She She, Allison Veltz Cruz, Sam Tinnesz, Benjamin Francis Leftwich, Britten Newbill, Joni Mitchell, Khris Riddick-Tynes, the estate of Nick Drake and composer Hans Zimmer.
Reservoir also continued to expand its recorded music business through a deal with independent label Fool’s Gold Records that included catalog master rights for several artists and an exclusive partnership to market and distribute recordings through Reservoir’s label platform.
Internationally, Khosrowshahi pointed to the launch of Reservoir’s Mumbai-based subsidiary Pop India, along with publishing deals involving Sri Lankan artist Yohani and Indian hip-hop artist Divine. Pop India also acquired publishing and master rights to the Music Craft Entertainment catalog.
In the Middle East and North Africa region, Reservoir and PopArabia completed the acquisition of label and digital distribution company Viral Wave in April. Khosrowshahi said the deal expands PopArabia’s team to more than 30 employees across Egypt, Morocco and the United Arab Emirates and adds distribution capabilities to its publishing and label services.
During the question-and-answer portion of the call, Khosrowshahi said Viral Wave is an established business with existing clients, relationships and product. Heindlmeyer added that the distribution business carries lower margins than some of Reservoir’s other businesses but is expected to expand the company’s regional opportunities.
Balance sheet and fiscal 2027 outlook
Reservoir ended the fiscal year with $117.1 million in total liquidity, including $25.9 million in cash and $91.2 million available under its revolving credit facility. Cash flows from operating activities increased by $4.9 million year over year to $50.1 million.
The company reported total debt of $455.7 million, net of $3.1 million of deferred financing costs, and net debt of $429.8 million. That compared with net debt of $366.7 million at the end of the prior fiscal year. Heindlmeyer said higher interest expense for the year reflected increased debt tied to music catalog acquisitions and writer signings.
For fiscal 2027, Reservoir guided for revenue of $186 million to $191 million and adjusted EBITDA of $75 million to $79 million. Heindlmeyer said the company expects organic growth to remain “pretty steady” in the mid-single-digit range, while noting that guidance reflects assumptions around the expected decay of newer copyrights and does not necessarily project repeated frontline successes from prior years.
Asked about EBITDA margin expectations for fiscal 2027, Heindlmeyer said the guidance implies some pressure from Viral Wave’s lower-margin distribution business and continued investment in the frontline side of the recorded music business.
Company says no update on acquisition proposals
Khosrowshahi also addressed previously disclosed non-binding and unsolicited acquisition proposals received by Reservoir. She said the company’s board formed a special committee of independent and disinterested directors in March 2026 to evaluate the proposals. The committee engaged Morgan Stanley & Co. LLC as financial advisor and Wachtell, Lipton, Rosen & Katz as legal counsel.
“Beyond that, we have no additional updates to share today and will provide further information as appropriate,” Khosrowshahi said.
In closing, Khosrowshahi said Reservoir’s long-term approach is focused on protecting creators, growing the value of their work and running the business with discipline.
About Reservoir Media NASDAQ: RSVR
Reservoir Media Inc is a global independent music rights management company that acquires, administers and monetizes music publishing and master recording assets. Its business model centers on building a diverse portfolio of copyrights and recordings across genres, then generating revenue through licensing, royalty collection and direct-to-fan initiatives. Reservoir’s catalog includes works by established and emerging songwriters and artists, spanning pop, rock, country, R&B and other contemporary styles.
The company operates two primary segments: music publishing and recorded music.
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