Reservoir Media — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Total revenue reached $49.9 million in Q2 FY27, a 10% increase year-over-year (YoY) from $45.4 million in Q2 FY26; organic revenue growth was 4%.
• Music Publishing revenue rose 8% YoY to $33.2 million, driven by digital and synchronization revenue.
• Recorded Music revenue increased 18% YoY to $15.4 million, driven by digital and neighboring rights revenue.
• Operating income was $12.3 million, up 15% YoY from $10.7 million.
• OIBDA (Operating Income Before Depreciation & Amortization) was $20.7 million, up 14% YoY from $18.2 million.
• Adjusted EBITDA was $22.1 million, up 14% YoY from $19.4 million.
• Net income was $4.6 million ($0.07 per share), compared to $2.2 million ($0.03 per share) in the prior-year quarter.
• Cash provided by operating activities for the six months ended September 30, 2026, was $21.6 million, a decrease of $3.7 million compared to the same period last year.
• As of September 30, 2026, cash and cash equivalents were $24.8 million, with $89.2 million available under the revolving credit facility, totaling $113.9 million in liquidity.
• Total debt stood at $458.6 million (net of $2.2 million deferred financing costs), with Net Debt at $433.8 million.

Guidance and Future Outlook:

• Reservoir raised and narrowed its fiscal 2027 outlook, expecting revenue between $188 million and $192 million (8% growth at mid-point).
• Adjusted EBITDA guidance for fiscal 2027 was raised to a range of $77 million to $80 million (7% growth at mid-point).
• Management expressed confidence in building on momentum for the remainder of fiscal 2027 based on consistent growth and disciplined cost management.

Business Segments and Product Lines:

• Music Publishing:
  • Digital revenue increased 10% to $17.6 million; synchronization revenue increased 13% to $5.2 million.
  • OIBDA margin remained steady at 37%.
  • Acquired the recorded music catalog of José Feliciano (including "Feliz Navidad").
  • Acquired the publishing catalog of jazz icon Billy Strayhorn.
  • Signed a publishing deal and joint venture with songwriter-producer Jake Sinclair.
  • Added Diamond-selling songwriter-producer Fred Ball and signed deals with Orla Gartland, The Snuts, Justin Dukes, Ava Liv Mabry, Riley Biederer, and The Reklaws.
• Recorded Music:
  • Digital revenue increased 33% to $11.5 million; neighboring rights revenue increased 40% to $1.5 million.
  • Synchronization revenue decreased 54% to $0.9 million due to license timing.
  • OIBDA margin expanded from 51% to 54%, driven by a decrease in cost of revenue as a percentage of revenue.

Market and Competitive Landscape:

• Reservoir holds a Top 10 U.S. Market Share according to Billboard's Publishers Quarterly.
• The company was named Publisher of the Year by Music Business Worldwide's The A&R Awards twice and won Independent Publisher of the Year at the 2020 and 2022 Music Week Awards.
• Growth in Recorded Music is attributed to continued growth at music streaming services and new affiliations.

Risks and Challenges:

• Forward-looking statements note risks including adverse economic conditions, risks associated with strategic acquisitions, and the company's indebtedness.
• Specific risks include cybersecurity incidents, risks related to the use of artificial intelligence, and the outcome of the Special Committee's evaluation of unsolicited acquisition proposals.
• Operating cash flow decreased due to timing of royalty payments and accounts payable, partially offset by royalty advance recoupments.
• Net income was impacted by increases in income tax expense and interest expense.

Management Commentary and Tone:

• CEO Golnar Khosrowshahi stated the second quarter marked the end of a strong first half, reflecting successful execution of the long-term strategy across both segments.
• CFO Jim Heindlmeyer highlighted the ability to generate consistent growth from a high-quality, diversified catalog while maintaining disciplined investment and cost management.
• Management emphasized a strategy of investing in established songwriters and catalogs with enduring significance alongside future hitmakers.

Other Key Points:

• The company acquired the recorded music catalog of José Feliciano and the publishing catalog of Billy Strayhorn during the quarter.
• Transaction costs of $200,000 for the quarter and $401,000 for the six months were incurred related to the structuring of strategic growth initiatives, the acquisition of Viral Wave (closed April 2026), and the Special Committee's evaluation of acquisition proposals.
• The company hosts a conference call for analysts and investors to discuss results, with a webcast replay available for 30 days.
• Reservoir operates offices in New York, Los Angeles, Nashville, Toronto, London, Abu Dhabi, Mumbai, and Cairo.