Reservoir Media, headquartered in New York City, has released its financial results for the third calendar quarter – the company’s second fiscal quarter 2022 (three months ended September 30).
According to an SEC filing, Reservoir, which was listed on NASDAQ through a merger with a SPAC (Special Purpose Acquisition Company) in July, generated total revenues of US $ 30.4 million in the third quarter. civilian, an increase of 45% from $ 21 million in the third quarter. quarter of the previous year (Q2 fiscal 2021).
Reservoir cites “the growth of the traditional streaming platform” and “the strong performance of alternative revenue sources” for that increase, as well as its acquisition of Tommy Boy in June, which it bought for $ 100 million.
Reservoir’s music publishing revenue in the third calendar quarter was $ 22.1 million, a 26% year-over-year increase.
During that same three-month period, Reservoir generated $ 8.1 million from recorded music, an increase of 148.8% from the $ 3.2 million generated in the quarter of the year. previous (calendar Q3 2021).
Reservoir says its physical revenues have continued to be “influenced by strong global demand for vinyl products,” which, he adds, has “greatly benefited” its Chrysalis Records business.
Breaking down further Reservoir’s latest results, we can see that ‘digital’ was the primary driver of the company’s quarterly publishing revenue (see below).
At $ 11.58 million, digital revenue derived from the edition of Reservoir grew 44% year-on-year, or $ 3.28 million from the $ 8.03 million generated in the quarter of the year former.
Reservoir’s second biggest revenue driver was “Synchronization,” which, at $ 4.1 million, was up 48% year-over-year from the $ 2.8 million generated in the third quarter of the year. last year.
‘Digital’ was also the main driver of the company’s recorded music revenue, generating $ 4.7 million in the three months to end-September, up 170% from $ 1.7 million. generated in the quarter of the previous year.
Reservoir’s recorded music revenues were also strengthened. Physical Music, from which the company generated $ 2.5 million in the third calendar quarter, an increase of 207% over the previous year quarter when the company generated $ 826,000 from this segment.
Elsewhere in Reservoir’s file, the company reveals that it paid $ 9.7 million in songwriter royalties and other publishing fees for the three months ended September 30, 2021, an increase of $ 2 million. dollars, or 27%, of the $ 7.6 million paid in the three months ended September 30, 2020 (see below).
Reservoir’s songwriter royalties and other publishing costs as a percentage of music publishing revenue increased to 44% for the quarter ended September 30, 2021, from 43% in the previous year quarter.
On the recorded music front, the amount paid by Reservoir for artist royalties and other recorded music costs increased $ 1.7 million, or 304%, to $ 2.3 million in the second calendar quarter. , compared to $ 587,000 paid for the three months ended September 30. 2020.
Reservoir says that increase was due in part to its acquisition of Tommy Boy as well as costs associated with the increase in physical income during the three months ended September 30, 2021.
Reservoir’s total “cost of revenue,” the amount he paid in artist and songwriter royalties plus other publishing and recorded music costs was $ 12 million for the three months. ended September 30, 2021
This total of $ 12 million represents an increase of $ 3.8 million, or 47%, from the total cost of revenues of $ 8.2 million for the quarter ended September 30, 2020.
“As we look to the future, we are encouraged by the recognition that the music industry continues to gain. “
Golnar Khosrowshahi, Reservoir
“We continued to build strong momentum in our second fiscal quarter, as we delivered double-digit growth across all of our key performance indicators,” said Golnar Khosrowshahi, Founder and CEO of Reservoir.
“We also aimed to enable future growth by expanding our reach in the music industry through the signing of many new publishing, recording and other contracts with highly accomplished artists and songwriters, including Joni. Mitchell, Alabama and Rufio Hooks.
“During the period, we completed the IPO process and expanded our board of directors with the addition of two senior senior directors.
“As we look to the future, we are encouraged by the recognition that the music industry continues to gain, and believe that our extensive and growing catalog, coupled with our strong track record in strategic acquisition and generation of cash flow, will position Reservoir to drive long-term long-term growth and value for our shareholders.
“Our outlook includes strong growth in revenue and operational performance, as we seek to capitalize on our recurring revenue model and the secular tailwinds accelerating in the music industry.”
Jim Heindlmeyer, Reservoir
Jim Heindlmeyer, CFO of Reservoir, added: “We had a good start to the year, with organic revenue growth of 15% in the second quarter.
“Our management team also continued to focus on profitable acquisitions, as well as expanding our roster of talented songwriters and artists. In light of our first half results and the closing of our merger transaction in July of this year, we are disclosing our guidance for fiscal 2022 for certain key performance indicators.
“Our outlook includes strong growth in revenue and operational performance, as we seek to capitalize on our recurring revenue model and the secular tailwinds accelerating in the music industry.
“We plan to remain committed to continued investments in our infrastructure to take advantage of future growth opportunities as they arise. Finally, we intend to continue to leverage the cash flow generating power of our business, which should allow us to tap our portfolio acquisition funnel and reduce our leverage profile over the long term. .Music trade around the world