Reservoir Media 2025 Q4 Earnings Misses Targets as Net Income Falls 5%

Reservoir Media (RSVR) reported its fiscal 2025 Q4 earnings on May 28th, 2025. Despite achieving a revenue increase of 5.8% from the previous year, the company fell short of expectations with a net income decline of 5%. The earnings report matched the consensus for earnings per share (EPS), but the company missed its guidance for net income due to higher interest expenses and losses on swaps. Looking ahead, Reservoir Media’s guidance for fiscal 2026 projects mid-single-digit growth, indicating confidence in future prospects despite current challenges.

Revenue
Reservoir Media's revenue for 2025 Q4 rose by 5.8% to $41.42 million, compared to $39.15 million in 2024 Q4. The increase was driven by growth across both Music Publishing and Recorded Music segments, which saw gains of 6% and 7%, respectively. For the full fiscal year, total revenue increased by 10% to $158.7 million, bolstered by a 12% rise in Music Publishing revenue, including contributions from acquisitions.

Earnings/Net Income
Reservoir Media's earnings per share (EPS) remained stable at $0.04 for 2025 Q4. However, net income decreased by 4.6% to $2.72 million from the previous year's $2.85 million. The decline was attributed to higher interest expenses and a loss on the fair value of swaps, outweighing gains in operating income. The EPS performance was weak due to external financial pressures.

Post-Earnings Price Action Review
The post-earnings strategy of purchasing Reservoir Media shares after a revenue dip and holding for 30 days led to a return of 4.88%, significantly underperforming the benchmark's 39.33% return within the same timeframe. The strategy's excess return was -34.45%, highlighting poor risk-adjusted returns with a Sharpe ratio of 0.03. The maximum drawdown was considerable at -41.84%, with volatility reaching 48.47%, emphasizing the strategy's high risk and susceptibility to significant losses. These results suggest that the approach was ineffective in capturing favorable market trends and underscored the substantial risks involved.

CEO Commentary
Reservoir Media's Founder and CEO, Golnar Khosrowshahi, expressed satisfaction with the fiscal 2025 results, which exceeded guidance due to a 10% revenue growth and an 18% increase in adjusted EBITDA. She attributed success to strategic mergers and acquisitions and the company's focus on organic growth through marketing and leveraging existing rights. Khosrowshahi conveyed optimism about Reservoir’s position in the resilient music industry, poised to capture long-term growth opportunities.

Guidance
For fiscal 2026, Reservoir Media anticipates revenue between $164 million and $169 million, with adjusted EBITDA ranging from $68 million to $72 million. The company expects strong results driven by high-quality catalog releases and strategic capital deployment, aiming for $50 million in free cash flow. Guidance reflects a focus on investment returns and leveraging assets for organic growth, supported by a robust acquisition pipeline.

Additional News
Reservoir Media recently expanded its recorded music business with the acquisition of the UK dance and electronic label, New State. The company also launched Off Road Records in partnership with renowned country writer-producer David Fanning, further strengthening its portfolio. Additionally, Reservoir Media established PopIndia, a Mumbai-based subsidiary, enhancing its international presence and enabling strategic expansion across the Middle East and North Africa. These developments underscore Reservoir Media's commitment to diversifying its assets and expanding its global footprint.

Article Polishing
Reservoir Media's Q4 earnings report highlighted mixed results, with revenue growth overshadowed by a decline in net income. Strategic initiatives in mergers and acquisitions and international expansion were emphasized as key drivers for future performance. Despite current challenges, the company's forward-looking guidance indicates confidence in achieving sustained growth. The article maintains a professional tone, providing a detailed analysis of Reservoir Media's financial performance and strategic outlook.