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 31, 2023. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. 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 the results for its fourth quarter and fiscal year 2023 ended March 31, 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 Khosrowshahi, Founder and Chief Executive Officer; and Jim Heindlmeyer, 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 Golnar 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 trends. 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 Golnar. Golnar?

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 finished within our guided adjusted EBITDA range for the fiscal year. We are encouraged by the topline 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,…

Thank you, Golnar, and good morning, everyone. As Golnar stated, we are pleased to report another strong year of financial and operational results. We delivered on our guidance metrics and significantly enhanced and diversified the business while positioning the company for long-term stability and growth. Now let's talk in greater detail about financial results for the fourth quarter fiscal year and our expectations for the next fiscal year. Revenue for the fourth fiscal quarter was $34.8 million, which was relatively in line with the fourth quarter of fiscal 2022. As a reminder, last quarter, we called out the fact that our international revenues were weighted more heavily towards the September and March quarters in the past, but that we have been able to smooth that collection somewhat in fiscal 2023. We also had significant revenue in Q4 of last year related to the Dubai Expo event that did not exist in the current fiscal year. Both of these factors impacted our year-to-year Q4 comparisons, but again, the results are in line with our expectations. In terms of the components, our topline results in the fourth quarter were driven by the decline in the Music Publishing segment, which was largely due to the lower Performance, Synch, and Other Revenue. Lower revenue in the Music Publishing segment was almost completely offset by higher revenue in the Recorded Music segment, which was driven by strength in digital and physical sales. Looking at our operating expenses for the quarter. Our overall cost of revenue decreased 5% versus the prior year quarter. Our depreciation and amortization costs increased year-over-year due to our continued catalog acquisitions. Company administration expenses saw a 1% decline from the prior year. From an operational performance perspective, in the fourth quarter, OIBDA increased 3% year-over-year to $14.4 million, while adjusted EBITDA…

Thank you, Jim. The diversity of our roster and solid financial profile will allow us to navigate any macroeconomic backdrop. Music continues to touch the lives of millions around the world and with an increase in digital streaming consumption of our artists' work, our company is well positioned for fiscal 2024. The consistent cash flow produced by our business provides financial stability amid what could be uncertain times in the broader economy in the coming quarters. Our pipeline remains robust and with the significant cash generated by our business, we will be rigorously analyzing deals and selectively deploying capital to achieve the highest return possible for our company and our stakeholders. With that, we will now open the line for questions.

Thank you. Our first question comes from the line of Richard Baldry with ROTH MKM. Your line is now open.

Thanks. Can you maybe talk about the M&A pipeline given the changing macro backdrop? I feel like asking question every quarter, but it always changes a little bit each quarter. There are changes in who you are seeing at the table, changes in expectations of the target that give you some confidence in the ROIs that you need to hurdle to get to your targets? Thanks.

Hi, Rich, it’s Golnar. As far as the M&A pipeline goes, I think, that as we look at it, feedback that I would give you is somewhat anecdotal. I think we’re seeing all the same parties at the table. One would expect there to be some sort of significant shift in pricing and we’re not really seeing a significant shift in pricing. I think that there is a category of finite high-quality assets that will continue to command a premium multiple as a result of their scarcity. The deal flow remains robust. People continue to be interested in monetizing their catalogs. But beyond that, I mean volume and pricing do not seem to have moved with any sort of significance.

Okay. And when you think about your guidance for the year ahead in terms of organic growth, is there a way to piece apart that increases in royalty rates as a backdrop and usage or the demand pull side throughout pricing and our overall adoption? It feels like if you take all those three pieces, your guidance might look a little bit conservative. Thanks.

Yes. One of the – hey, Rich, it’s Jim. One of the things that we always want to be careful about with guidance is, is not being too aggressive or double counting the effect of some of the tailwinds that we see. So oftentimes when we’re looking at guidance and we’re looking at industry growth, let’s say that that’s targeted at 7%, 8% whatever some of the different outlets might put that out. We are typically taking the view that many of those factors that you just touched in are baked into that number. Do we think that there is upside to that number? I certainly do, but we’re not going to be overly aggressive with how we look at that.

Okay. And last for me, you’re talking a lot about international expansion and maybe higher available ROIs there. You talked about how you feel about the depth and breadth of the team you have to address those types of markets you think you’ll be adding in additional resources as you increase your focus in those markets? That’s it for me. Thanks.

So we have an existing team there that is well-staffed and as we have done in all parts of our business, as the demand is there and the workflow is there and the infrastructure that we need warrants, we will add to that. But that has been one of the reasons we have been able to execute on transactions and deploy capital is that we have boots on the ground, people who are extremely knowledgeable about the region and are able to source deals and manage them through that sourcing process and close on those transactions. And we firmly believe that that is the way to expand into these emerging markets.

Maybe last for me. When you think about those markets, is the attraction based more on sort of the pricing of the assets you can get today? Or do you think it’s based more on maybe an underpenetration of digital and under assertion of rights things that can improve over time that would make those ROIs on those assets even better? Thanks.

I think it’s a bit of both. We are constantly looking at how we deploy capital most efficiently. And if we can do so at more attractive pricing for quality assets then that’s certainly a preference. But I do think we are looking at a market that has some pretty great underlying growth potential as a result of streaming penetration, subscriber growth and a number of other factors. And our interest is both in the attractive pricing we can get now and the future growth in value possibilities.

Great. Thanks.

Thank you. Our next question comes from the line of Alex Fuhrman with Craig-Hallum Capital Group. Your line is now open.

Hey, guys. Thanks for taking my question and congratulations on a really strong year. Wanted to also ask about the guidance. You guys have done a really good job over the past three or four years of growing organically above and beyond the industry growth rate, it seems like what you’re guiding to for this year is a little bit closer to that industry growth rate. Is that in any way a function of just simply the catalog getting larger and it’s harder to find those really unique under monetized opportunities and so inevitably, growth will kind of converge with the industry growth rate? Or is there anything that you maybe seeing out there in the broader industry that suggests that the growth rate over the last couple of years might slow down a point or two?

Hey, Alex, it’s Jim. Certainly, I think when we think of guidance, we want to be realistic in what we guide to, but we always strive to do better than where we set that bar. I think with respect to some of the opportunities over the past couple of years, when we have an acquisition like a Tommy Boy, where maybe we saw an opportunity for significant value enhancement, that’s certainly going to allow us to – as we execute on that to show results that have really good organic growth. And we’re always looking for those types of opportunities. But as we are maybe being a little bit more conservative in our M&A within our guidance where we talk about just building in organic M&A opportunities, I think that you’re naturally going to see that anticipated growth rate come down a little bit. But again, it’s our goal to always do better than where we set the bar.

Okay. That’s really helpful, Jim. Thank you. And then you mentioned the big Tommy Boy acquisition, as we think about the 250 targets that I think Golnar, you mentioned that you have in the pipeline. Are there any that are really significant of that size? I imagine the bulk of those 250 would be smaller kind of tuck-ins, but are there any kind of noteworthy really significant targets that you’re looking at that could be similar in size to Tommy Boy?

There are a couple sprinkled in there, but for the most part, we are looking at more of those deals that have historically been in our sweet spot that’s around the sort of $40 million to $60 million range, but there are a couple of more sizable transactions in there.

Okay. That’s really helpful. Thank you, both.

Thank you. And I’m currently showing no further questions at this time. I’d like to hand the call back over to Golnar Khosrowshahi for closing remarks.

Thank you, operator. Our performance in the fourth quarter and fiscal year is indicative of both the strength of our team at Reservoir and the quality of assets we’ve assembled. I thank you for joining us this morning and we look forward to updating you on our progress on our next call.

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