New York-headquartered Reservoir Media reported revenue growth in line with guidance for its fiscal first quarter, with the music rights company highlighting its move into immersive entertainment on its latest earnings call.
Reservoir reported $37.2 million in revenue for Q1 of its fiscal 2026, which corresponds to Q2 of calendar 2025. That’s an increase of 8% YoY, or 5% YoY on an organic basis excluding acquisitions, driven forward by a large increase in synch revenues in its music publishing division and continued growth in digital revenues in its recorded music division.
The company’s operating income grew 10% YoY to $5.4 million. Adjusted EBITDA also grew 10% to $13.9 million, while OIBDA jumped 12% to $12.8 million. The company attributed the increases to the growth of overall revenue and improving margins.
However, Reservoir’s net loss widened slightly to around $640,000, or approximately $0.01 per share, from around $450,000 in the same period a year earlier.
Reservoir’s music publishing division, which still accounts for the lion’s share of its revenue, brought in $24.9 million in the quarter, up 4% YoY, while OIBDA came in at $7.6 million, up 12%.
Driving the growth was a 48% YoY jump in synchronization revenues, to $4.2 million, partly offset by small declines in digital revenue (down 2% to $14.3 million) and performance rights (down 7% to $4.8 million).
In its recorded music division, Reservoir reported an 8% YoY jump in revenue to $10.4 million, while OIBDA grew 9% to $4.9 million.
That was driven by a 23% YoY increase in digital revenue to $8.0 million, partly offset by a 21% decrease in physical recorded revenue to $1.1 million and a 57% drop in synch rights to $0.3 million.
The company stuck to its guidance for fiscal 2026, which ends March 31, 2026. It sees revenue coming in at $164 million–$169 million, which would be a year-over-year increase of 5% at the mid-point, and adjusted EBITDA of $68 million–$72 million, up 6% at the mid-point.
“We continue to see healthy demand for our portfolio across music publishing and recorded music,” Founder and CEO Golnar Khosrowshahi said on the company’s earnings call Tuesday (August 5).
“We are actively advancing a robust pipeline of acquisition opportunities and continuing to diversify our portfolio in ways that enhance long-term value.”
Khosrowshahi stressed the company’s expansion into immersive entertainment last month with an investment into Lightroom, a London-based company that has created immersive experiences in collaboration with the likes of Billie Eilish, Coldplay, and Hans Zimmer.
The investment “diversifies Reservoir’s investment portfolio into the high-growth immersive entertainment vertical and unlocks additional value from our IP’s use as the foundation for future shows,’ Khosrowshahi said.
“Immersive experiences built around music are particularly attractive to the growing superfan market of highly-engaged music fans which has risen to 20% of paid streaming subscribers as of the end of 2024, according to Luminate.”
“We continue to see healthy demand for our portfolio across music publishing and recorded music.”
Golnar Khosrowshahi, Reservoir
The value of Reservoir’s investment into Lightroom wasn’t revealed, but CFO Jim Heindlmeyer told analysts on the investor call that the company had taken a “single digit equity stake” in Lightroom.
Globally, the immersive entertainment market was estimated at over $100 billion in 2024, and is expected to exceed $440 billion by 2030, according to Grand View Research.
Reservoir also revealed that in fiscal Q1 it had extended its publishing administration deal with music legend Joni Mitchell, which had originally been inked in 2021, and its global publishing deal with writer-producer Khris Riddick-Tynes, known for his work with artists such as Rick Ross, Kehlani, Ariana Grande and Wiz Khalifa, among others.Music Business Worldwide
