Good morning everyone and thank you for participating in today's Conference Call to discuss Reservoir Media's Financial Results for the Second Quarter of Fiscal 2022 ended September 30th, 2021. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would 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, operator. Good morning everyone and thank you for participating in today's earnings conference call. Reservoir Media issued an earnings press release with results for its second fiscal quarter of 2022 ended September 30th, 2021 earlier this morning. If you did not receive a copy of our earnings press release, you may access it from the Investor Relations section of our website at investors.reservoir-media.com. With me on today's call are Golnar Khosrowshahi, Founder and Chief Executive Officer and Jim Heindlmeyer, Chief Financial Officer of Reservoir Media. 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 Golnar and Jim, I'd like to note that today's discussion will contain forward-looking statements that reflects the current use of Reservoir Media about our business, financial performance, and future events and as such, involves 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 expectation, belief, and projection 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 track. Reconciliations of these non-GAAP financial measures to the nearest comparable GAAP measures are included in our earnings press release. In terms of the structure of our call today, Golnar will start with a review of our business operations and the progress we are making as we execute against our key strategic priorities. Jim will then walk through a financial review of the quarter, and then Golnar will come back to wrap-up our remarks with a few closing comments before we open the line for your question. And with that, I'd like to turn the call over to Golnar. Golnar?

Thank you, Jackie. Good morning everyone and thank you so much for taking the time to join us on the call today. The past few months at Reservoir have been filled with many important milestones for our organization. The most noteworthy was the late July completion of our process to become the first publicly-traded independent music company to list on any U.S. stock exchange. The additional access to capital and more visible profile we have as a public company allows us to expand and accelerate our growth strategy. I am tremendously grateful to our unparalleled roster and team for their endless contributions to building our next chapter, and look forward to all that we will achieve together. For today's agenda, I'd like to speak to shifts in the landscape and our place within it, plus walk you through a high level recap of our execution and performance over the last few months. Following that, our CFO, Jim Heindlmeyer will share some of the quarter's financial results in detail, and we will conclude by answering your questions. Since our July listing, you have likely read about the billions of dollars that are on the move in the music industry. This includes numerous iterations of financial investors backing both people and platforms that are dedicated to investing in music. This boom reflects a relatively recent reality and one based on a long-standing core belief of our business ethos. The music industry is undergoing a constant evolution, where it is perpetually identifying novel access points, securing new listeners, and generating unprecedented growth. Data from the IFPI released mid-October backs this claim, revealing that listening hours have increased to 18.4 hours per week and there was 51% growth in time spent listening to music on subscription audio streaming services. But beyond these statistics, what…

Thank you, Golnar and good morning everyone. I want to echo Golnar's comments as I'm incredibly pleased with our second quarter results, which came in line with our expectations. We executed on our strategic initiatives and deliver double-digit year-over-year growth in revenue, operating profit, and adjusted EBITDA. Now, let's look at our results in greater detail. As a reminder, all percentage change references that I make, unless explicitly stated otherwise, will offer comparisons between Q2 fiscal 2022 and Q2 fiscal 2021. As Golnar mentioned, our revenue in the second fiscal quarter exemplifies today's strong and growing demand for music and audio content. Revenue in the second fiscal quarter was $30.4 million, an increase a 45% from the second quarter of fiscal 2021. That included 15% organic revenue growth driven by our value enhancement efforts. Our teams continue to leverage alternative revenue streams and new streaming opportunities that drive organic expansion and greater value for the artists and creators who trust us with their life's work. Additionally, those great topline performance numbers can be attributed to continued catalog acquisitions, a 67% increase in digital revenues across both business segments, and the growing presence in the international markets. Now, let's drill down into our segments starting with music publishing. Music Publishing generated revenue of $22.1 million in the quarter, which was a 26% improvement from this time last year. This increase was driven by strong performance in both our digital and synchronization sources. Digital revenue refers to revenue from musical compositions from bodies and recordings distributed through streaming services, download services, and other digital music services, including new platforms such as Peloton or Roblox. Digital revenue in the Music Publishing segment totaled $11.6 million for the quarter, a 44% gain year-over-year. Synchronization revenue refers to the right to use an artist's musical…

Thank you, Jim. Before we take your questions, I'd like to close with a few strategic thoughts and touch on a few aspects of the business that underscore our competitive advantage, our edge and our positioning for leadership within the evolving landscape of the industry. We recognize the growth that has and will likely continue to come from the emerging markets and this was the original impetus behind our January 2020 acquisition of PopArabia, which is based in Abu Dhabi. Building upon that acquisition and an entirely new development this quarter was the launch of ESMAA, a rights management entity and subsidiary of PopArabia dedicated to facilitating licensing in the UAE, and more broadly in the Middle East. ESMAA is a first of its kind entity in the region, addressing the need in the market for legitimate music licensing processes. I look forward to watching PopArabia and ESMAA set local standards in music licensing. Furthermore, we continue to build on our emerging market strategy by adding new artists and music to the roster in these regions. This included a direct investment in China's leading music rights and marketing services company, Outdustry. As part of this investment, we also formed a joint venture to sign and develop Chinese artists and songwriters, plus acquire local music catalogs. In a few years, we will bear witness to Outdustry and PopArabia, bringing homegrown stars to the global stage and playing a part in encouraging the movement of culture from east to west. Another exciting recent investment is in the award-winning podcast and audio entertainment development team at Audio Up. We sincerely believe that beyond music, we are more broadly in the business of listenership and are focused on strategies that enable us to have exposure to content -- all types of content that is…

[Operator Instructions] Our first question comes from a line of Richard Baldry of ROTH Capital. Your line is open.

Thanks. So, start on sort of the only thing that gets dragged then that's obvious why but the performance categories, people in COVID shutdowns not performing as well as is down a bit. What is the long-term sort of normalized level that that could be contributing if we got back to sort of a full concert seasons and regular, sort of, movements outside of our lockdowns?

Hey, Rich, how are you? This is Jim. Well, I think with the performance revenue, in particular, what we're really seeing here is still the, the lagging effect, primarily of the international markets. Those markets report on a three to six-month lag. So, really, when we're comparing Q2 of this year to Q2 of last year, where we're seeing last year's numbers that include really pre-pandemic levels, and this year's numbers, while some of us think that we are on the way out, and there's certainly a lot of good progress, the international numbers are still reflective of being in the midst of the pandemic. So, we think that as we move forward over the next two to three quarters, the international side will really start to come back. And we will -- we'll get back to a level where performance is where we expect it to be, which is really around 20% of our overall revenue.

Okay. And when we think about international, maybe it's obviously a few buckets, but what is the -- are there ways to think about revenue per large scale population or something that that tells us the potential of areas that are more new to this like the Middle East or maybe parts of Asia versus Europe, that's probably closer to the U.S. metrics, and sort of, how big a driver can that be for a few years to come?

I'd say that there's a lot of there's a lot of factors that go into that and it's not just population size, a lot of it has to do with the copyright laws in different regions. And this really touches on one of the things that Golnar on are mentioned with ESMAA, we think that there's a lot of potential in the Middle East. But historically, you have not seen much in the way of performance revenue coming out of a market like that, because there hasn't been an entity to license music. Those markets have oftentimes used music without properly licensing and monetizing it. And now we're able to do that through ESMAA. I think that the subscription growth in a lot of those emerging markets will also contribute to the growth of performance revenue.

Then the organic growth obviously been almost 2x or over 2x the industry, can you talk about how sustainable you see that for some period of time are extensible? And sort of what are the incremental costs you need to support that organic growth? Not when you're adding wholesale new libraries, but simply growing organically through your synchronizations, et cetera?

Its Golnar, Rich, how are you?

Good.

As far as organic growth goes, we don't have any indicator that it's not sustainable. Our organic growth is obviously driven by a lot of the initiatives that we undertake here and those are ones that we continue to staff and continue to power and continue to execute on through our sync team, et cetera. So, we have a pretty good track record of that organic growth being consistent and we don't have an indication that that could change.

Okay. Then if we think about the factors that drive the capacity on the revolver. So, when -- I assume they understand that you're buying highly visible recurring high margin revenue streams. So, as you buy those sort of integrate them into the business, is that revolver have a some flex to grow over time. Will that be one of the key tools to keep up the M&A effort?

Yes, I mean, we are fortunate to be in a position where we have a very long and strong relationship with our lenders. They've always been supportive of us. And it's a group of lenders who really do understand the predictive and recurring nature of our revenues, and they're very supportive of us. So, we don't foresee any issues with capacity around our revolver or looking at options with our revolver as we move forward.

And sorry for running down, but can you maybe because you still are very new in the public markets, walk us through the overall seasonality on the revenue side. Now, as you -- you've given a topline number, but there is a distinct seasonality. So, just remind us of that, so that everyone sort of calibrates it together.

Yes. I like to make the distinction between cyclicality versus seasonality of our revenue. And the reality is that the September and March periods have been historically our larger quarters because we have a number of revenue sources, primarily on the international side who pay us semi-annually, 90 days after the end of the June and December periods. We're in the process of working with some of those international sub-publishers to try and move them to more of a quarterly accounting. We're likely to have some success there, but we won't be moving everyone to that to that schedule. So, you can think about our second half of the year and the guidance that we provided in the context of certainly the fourth quarter being more significant than the third quarter because of that cyclicality and the semi-annual accounting that come in in the in the March timeframe.

Thanks. And last one from me. The -- more broad picture, but you've been public for about a quarter now. You touched lightly on it, but maybe a little more color on how do you think that transforms your ability to source deals, have pipelines come to you, your visibility in the market, et cetera, just so we kind of get a gauge for the early impact and how that could build going forward? Thanks.

Sure. I mean, it's certainly a milestone to be the first independent publicly-traded vehicle in the United States and we recognize that and that we have seen other people are recognizing, so there's certainly greater visibility that comes hand-in-hand with that. And we are seeing interest insofar as how we can structure deals and the potential we have there because we do now have a currency and that was one of our interest insofar as going public, but we are seeing that that has traction within the seller market as well. So, those two things come together and it has given us greater visibility within the marketplace. And we hope to continue to build on that, as you said it's only been a quarter. So, hopefully that will continue to track and have momentum behind it.

Thanks. And congrats on the quarter.

Thank you very much Rich.

Thanks Rich.

[Operator Instructions] Our next question comes from the line of Alex Furman of Craig-Hallum Capital Group. Your line is open.

Great. Thanks very much for taking my question. Congratulations on a really strong quarter. I wanted to ask about the M&A that you're seeing, looks like you guys have actually executed on a lot of M&A over the past year, but the Tommy Boy acquisition stands out, having been a particularly large deal. Can you talk about how that integration is going? And as you look at your pipeline, are there any other very large deals that you're seriously considering?

Sure. Thanks Alex. How are you? As far as the Tommy Boy integration goes, that's obviously been going on for a few months now. And it is very much on track, I would say it's probably ahead of schedule, and so far as staffing and services and just ingesting those copyrights et cetera. There is an ingestion team in charge of that and we are very pleased with those results. As I said, we are evaluating over $1.5 billion of transactions right now, but there -- as far as being in sort of confirmatory due diligence or an exclusivity, we are not in exclusivity on -- a deal of a similar size presently. But there are a few large-size deals in that deal pipeline that I mentioned.

Okay, that's really helpful. Thanks Golnar. And then I think you and Jim touched a little bit in the call about emerging market. Can you talk a little bit about how much of a part of your business today are emerging markets? And then in the context of that M&A pipeline and the level of deals that you're looking at, how much could emerging markets factor into that over the next few years?

So, presently, the emerging markets are contributing about 1% to our revenue and obviously, that is not a significant number. But we do see substantive pipeline in our deal flow coming from the emerging markets and we are executing on those and we do see some great potential there, obviously, growing from that 1% that it currently is over the course of the next few years.

Okay, that's really helpful. Thank you very much.

Thank you. At this time, I like to turn the call back over to Golnar Khosrowshahi for closing remarks.

Thank you so much. Thanks to everyone for joining us today and we look forward to continuing to keep you updated and thanks again.

This concludes today's conference call. Thank you for participating You may now disconnect.