Reservoir Media, Inc..

Good morning, everyone, and thank you for participating in today's conference call to discuss Reservoir Media's financial results for the fourth quarter and fiscal year 2023, ended March 31st, 2023. At this time, all participants are in a listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I'd now like to turn the call over to Ms. Jackie Marcus with the Alpha IR Group, who will review our agenda today and the company's forward-looking statements. Jackie?

Thank you, Shannon. Good morning, everyone, and thank you for participating in today's earnings conference call. Reservoir Media issued a press release with results for its fourth quarter and fiscal year 2023 ended March 31st, 2023, earlier this morning. If you did not receive a copy of our earnings press release, you may access it from our investor relations section of our website at investors.reservoir-media.com. With me on today's call are Golnar Kozroshahi, Founder and Chief Executive Officer, and Jim Heindelmeyer, Chief Financial Officer. As a reminder, this call is being simultaneously webcast and will be recorded and archived on the investor relations section of our website. Before I turn the call over to Gulnar and Jim, I'd like to note that today's discussion will contain forward-looking statements that reflect the current views of Reservoir Media about our business, financial performance, and future events, and as such, involve certain risks and uncertainties. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs, and projections will result or be achieved. Please refer to our earnings press release and our filings with the Securities and Exchange Commission for more information on the specific risks, uncertainties, and other factors that could cause our actual results to differ materially from our expectations, beliefs, and projections described in today's discussion. Any forward-looking statements that we make on this call or in our earnings press release are, as of today, and we undertake no obligation to update these statements as a result of new information or future events, except to the extent required by applicable law. In addition to financial results presented in accordance with generally accepted accounting principles, we plan to present during this call certain financial measures that do not conform to U.S. GAAP if we believe they are useful to investors or if we believe they will help investors to better understand our performance or business trend. Reconciliations of these non-GAAP financial measures to the nearest comparable GAAP measures are included in our earnings press release. I would now like to turn the call over to Gulnar. Gulnar?

Thank you, Jackie. Good morning, everyone, and thank you for joining us today to review our fourth quarter and fiscal year 2023 results. I'm pleased with the progress our company made over the course of fiscal year 2023 as we continued to strategically deploy capital for future growth while enhancing value for a robust roster of talented artists and creators. Fiscal 2023 marked another year of momentum for Reservoir and the entire music industry with consistent secular tailwinds and organic industry growth against an uncertain macroeconomic environment. As a result of the healthy industry momentum and our consistent execution, we were able to surpass the high end of our revenue guidance range and finish within our guided adjusted EBITDA range for the fiscal year. We are encouraged by the top-line growth that our business continues to achieve, and we expect this trend to continue as we work to ensure that our artists' music is widely consumed and successfully monetized. To that end, we saw another quarter of healthy organic growth from our best-in-class value enhancement initiatives to finish the fiscal year with an organic revenue growth rate of 8%. A portion of our growth in the fourth quarter can be attributed to the landmark achievement of bringing Grammy-winning hip-hop trio De La Soul's iconic catalog to streaming platforms everywhere for the first time. This was a highly anticipated event, and we were thrilled to partner with the group and bring their music to the masses. Our recorded music segment continued to perform well, reporting another quarter of double-digit growth, while our music publishing segment was down 8% for the quarter due to the segment's exceptional performance in the fourth quarter of fiscal 2022. Before Jim goes into further detail regarding the financial drivers for the fourth quarter and the fiscal year, I'd like to spend a few minutes on the trends we're seeing across the music industry. Over the past 12 months, the industry remained decoupled from broader economic headwinds and achieved overall organic growth. According to recent IFPI data, revenues grew across both physical and digital formats in 2021 and 2022. The continued rise of digital consumption across streaming platforms demonstrates the vitality of music in our everyday lives. This trend is also evidenced by Spotify's recently released subscriber growth, which exceeded the leading streaming services expectations. As digital streaming paid subscriptions increase and retention rates grow, Reservoir is positioned favorably to benefit from the continued demand for digital consumption of music. One area we are looking at closely is the impact and opportunities around generative AI. There are a range of issues around copyright likeness and other regulatory considerations that arise from its progress and the legal implications of this kind of machine learning are already knocking on our door. From our perspective, we want to make sure all those issues are addressed, but we don't believe AI poses a direct challenge to our business of monetizing musical artistry. We are already living in a world where authenticity drives value. It is clear that people love music and the relationship between music and the consumer is deeply personal. That relationship can consist of an experience, a moment in time, the love for a favorite artist, a live performance, or a memory. It extends beyond notes and words. That said, auto-generated music facsimiles and composites will have a place in the market, and it will be exciting to see what forms that takes and how creators incorporate AI to inform and enhance their work. Machine learning has the potential to be used as a tool in the industry in novel ways, improving upon our processes and creating greater efficiencies, particularly in micro-licensing and metadata management. Our team is working to understand the potential opportunities for AI as well as ensuring our artists are properly compensated for their work by this new technology. Turning to our performance, despite strong industry trends, We took the necessary steps over the past year to effectively navigate a challenging macroeconomic environment with the levers provided by our efficient operating model and strong financial profile. Our business consistently produces predictable cash flow that we can opportunistically deploy to drive future growth. During the fiscal year, we allocated capital to several margin accretive deals across genres. As I previously mentioned, We brought De La Soul's iconic catalog to all streaming platforms for the first time ever. We also broadened our emerging market portfolio with the signing of Arab superstar Mohamed Ramadan, Egyptian label 100 Copies, Lebanese music company Voice of Beirut, Indian rappers MCL Tafan De Evil, and producer Stunna Beats. Expanding our portfolio in these important emerging markets, but especially within the Middle East, is highly important to our overall strategy and a key differentiator for us. With our network and ability to purchase content at attractive multiples, this region presents significant opportunity as we work to become the largest holder of Arabic music copyrights. We also continue to bolster our catalog with the additions of jazz legend Sonny Rollins, swing icon Louie Prima, and Rock and Roll Hall of Famers Matt Sorum, Phil Manzanera, and Dion. As it relates to hip-hop, we signed deals with multi-platinum producers Marley Marl and Manny Fresh. We've not only grown our catalog in fiscal 2023, but I'm really pleased about how we've added diversity across eras and genres, which further insulates our business from broader market swings. Overall, we have not slowed down in our plans to build upon our robust roster of talented artists and creators. I'd like to take a moment to discuss some of our more significant recent signings and acquisitions. We recently announced a deal with Miami Sound Machine co-founder and lead songwriter Kiki Garcia. This deal includes rights to Kiki's entire catalog, including the international hit song, Conga, performed by Gloria Estefan and the Miami Sound Machine, which he solely penned. This marks a notable expansion of our rights into Latin American music and we are proud to do so with such a key figure like Kiki and his evergreen titles in this genre. We expanded our portfolio with Grammy-nominated writer and producer Dennis Lambert. This deal includes his entire catalog featuring hits such as We Built This City by Starship and Night Shift by the Commodores. Dennis's works have impacted music charts for decades, and we are honored to be the stewards of his catalog. This deal bolsters our existing copyright interest in Night Shift, which we originally came to own through our acquisition of the catalog of the Commodore's Walter Orange. We are proud to now represent a greater share of this incredible song. We signed rapper Armani White to his first publishing deal. Armani had a meteoric rise to popularity last year with his global viral Billie Eilish. The song exploded on TikTok with over 40 billion views and more than 250 million Spotify streams. We believe this only scratches the surface of his enormous potential and look forward to supporting him as he continues to grow. We added to our active songwriter roster by signing Grammy-nominated writer-producer Christian Stahlnecker to a publishing deal, which includes his number one hit co-write, Thank God, by Kane Brown and Caitlin Brown. The track held the top spot at Country Airplay for two weeks and also charted on the Hot 100, Top 40 Radio, and American Top 40 Hot AC charts, demonstrating its success across genres. We appreciate Christian trusting us with his catalog, and we are excited about what the future holds. To further diversify our business, we recently announced a joint venture with American Idol producer 19 Entertainment. in which we will sign publishing deals with the talented contestants from American Idol. We are delighted to be working with the incredible people at 19 Entertainment and are excited about the synergies and opportunities that this partnership can bring. We have not slowed down in our plans to build upon our robust roster of talented artists and creators. The progress we made in fiscal 2023 will strengthen our portfolio and support growth prospects in fiscal 2024 and beyond. Looking ahead, our deal pipeline is solid and includes more than 250 potential targets across genres with a current value of over $1.9 billion. As we look forward, we remain well positioned to benefit from industry tailwinds and we are excited about the strength of our business going into fiscal 2024. We are issuing fiscal 2024 guidance today for revenue and adjusted EBITDA which represents growth of 6% for revenue and 9% for adjusted EBITDA at the midpoint compared to fiscal 2023. We remain confident in our ability to grow the company through strategic business development opportunities and will remain selective in our capital deployment for future top-line growth and margin expansion opportunities. With that, I'd like to turn the call over to Jim to discuss our fourth quarter and fiscal year results as well as our fiscal 2024 guidance in greater detail. Jim?