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 2024 ended March 31, 2024. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [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 a press release with results for its fourth quarter and fiscal year 2024 ended March 31, 2024, 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. 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, 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 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 US 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.

Thank you, Jackie. Good morning, everyone, and thank you for joining us today. Our 2024 fiscal year results are representative of our high-quality roster and catalog, our management team and our value-enhancement infrastructure. Together, these factors contributed to record-setting total revenue and operating income for the full year. We continue to build on our proven track record and strong financial footing. We posted an 18% increase in revenue for the fiscal year, which includes acquisitions and 15% and 22% growth in our music publishing and recorded music segments, respectively. We added several award-winning artists and songwriters to our catalog, which I will discuss in a moment, and we were honored to share recognition with our creators, who contributed to an impressive ten Grammy awards across six genres, two Rock and Roll Hall of Fame inductions, and 42 number ones across all of Billboard's charts. Our roster broke records and achieved new milestones this year, including the celebration of the 35th anniversary of De La Soul's groundbreaking debut album, "3 Feet High And Rising." We also saw SZA's "Snooze," co-written and co-produced by our writer/producer, Khris Riddick-Tynes, sit at number one on Billboard's R&B/Hip-Hop Airplay chart for a record-breaking 37-weeks. Additionally, Rob Ragosta's cowrite "Need A Favor" by Jelly Roll became the first song ever to reach the top ten on both the Billboard Country Airplay chart and the Mainstream Rock Airplay chart going on to claim the top spot on multiple other charts. Our strategy to work with hit-making creators across genres provides for more revenue-generating opportunities and access to diverse listening audiences. We finished out the year with a strong fourth quarter with healthy organic revenue growth of 8% or 12%, including acquisitions. This year's Super Bowl was a standout moment in Q4 with the halftime entertainment show featuring…

Thank you, Golnar, and good morning everyone. We closed out our fiscal year 2024 in a position of strength with double-digit top-line growth across both segments of the business. We also made many acquisitions and signed numerous artists and songwriters over the course of the fiscal year, which we believe will be a healthy source of future revenue growth. Let's start with the fourth quarter. Revenue for the fourth fiscal quarter was $39.1 million, which was a 12% increase compared to the fourth quarter of fiscal 2023, driven by strong growth in both segments and highlighted by 14% growth in the music publishing segment, inclusive of the acquisition of various catalogs. With respect to our operating expenses for the quarter, our overall cost of revenue increased 16% 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 19% increase from the prior year. From an operating performance perspective, in the fourth quarter, OIBDA increased 5% year-over-year to $15.1 million. Adjusted EBITDA increased 6% to $16 million. The increase in adjusted EBITDA in the fourth quarter was largely driven by stronger revenue, particularly in performance and digital, within the publishing segment, but was also partially offset by higher administrative expenses from our artist management business. Interest expense was $5.2 million for the quarter, compared to $4.2 million in the same period last year. Net income for the fourth quarter of fiscal 2024 was $2.9 million versus $2.3 million in the fourth quarter of fiscal 2023. This resulted in diluted earnings per share for the quarter of $0.04, which is the same as the prior-year period. Moving to our full fiscal year 2024 results, revenue came in at $144.9 million, an 18% year-over-year increase and above the top end of…

Thank you, Jim. We are entering the 2025 fiscal year with a strong financial foundation and a robust portfolio of assets. Our financial guidance reflects our confidence in both driving organic growth with our value-enhancement efforts and capitalizing on the projected growth of the music industry. We will continue to partner with our roster of award-winning creators to bring their bodies of work to listeners around the world and look forward to playing an important role in the future of music. With that, we will now open the line for questions.

Thank you. [Operator Instructions] Now, first question coming from the line of Griffin Boss with B. Riley Securities. Your line is open.

Hi, good morning. Thanks for taking my questions. So to start off, you paid down $11.5 million of debt. Nice to see the net leverage come down a bit. Was there anything driving that decision other than just typical capital allocation decisions? So I guess said differently, did that have anything to do with what you're seeing on the catalog acquisition side? Maybe not as many attractive opportunities or higher multiples or getting outbid in certain transactions. Just any more color you could provide on that would be helpful.

Sure. Thanks for the question, Griffin. So really, it just had to do with our ongoing cash management, management of our balance sheet. It had nothing to do with deal flow or a shortage of opportunities there. It's really just decisions that we make all the time with respect to capital allocation.

Okay, got it. And then Golnar, did you just, on that front, did you say the pipeline is $1 billion now? Is that down from the $2 billion from last quarter? Did I hear that right?

Yes. That's correct.

Okay, got it. And then, just, is there any color you can give on your M&A outlook for fiscal year '25, or are there any -- do you have any allocation plans for catalog acquisition or royalty advances that you can provide?

We're very optimistic about the deal flow. The pipeline is quite robust. We have a few very interesting off-market opportunities that are available to us and we're excited about that. So I think it's very much business as usual there, tapping into our expertise and being able to execute on these off-market opportunities. And I'm generally quite optimistic about what that pipeline looks like. I think we continue to see assets trading in the mid-to-high teens, and we are, obviously executing well below that. And that's a good position to be in for us.

Great. Okay. Thanks, Golnar. And if I could just squeeze one more in. Coming off a strong year in both publishing and on the recorded side, when you look at the top line growth rate in your guide for fiscal year '25, how are you seeing that breakdown between the two segments? And is there a level of caution built into that guide, given the recent Spotify bundling news?

Yes, I mean, certainly we factor all of those things into our guidance. In addition to the issue with Spotify and how they're treating the bundle, we have things that we look at, like the fact that we released De La Soul's entire catalog during fiscal '24 and how that will impact us as we move into the next fiscal year. Obviously, that's not something that is recurring every year. So we're constantly evaluating those types of one-off items that might be headwinds or in some years maybe tailwinds with upcoming plans. And certainly, I think there's a certain amount of conservatism that we operate with, with respect to guidance until we get a little bit further into the year.

Okay, understood. Thanks for taking my questions. Appreciate it.

Thank you.

Thank you. [Operator Instructions] And our next question is coming from the line of Richard Baldry with ROTH Capital. Your line is open.

Thanks. Can you dig a little deeper into the change in the pipeline from $2 billion to $1 billion? Are you sort of scrubbing the expected ROIs harder and pushing them out or have a lot of deals just closed and gone in different directions? How do we think about that change over the last quarter?

I think there were a couple of larger deals that have moved and we are still seeing sort of ample deal flow for us and our appetite, but that's really the dynamic there, nothing more than that.

If you look to next year's full year guide, I know there's some puts and takes to product cycles and launches and things, but you did organic growth of 8% in the fourth quarter, 14% for the year. So taking down next year's outlook to 4%. Can you talk about maybe how much conservatism you think is built into that, or how much product cycles or one-off events drove upside to fiscal '24?

Yes. Well, there's certainly a lot of detail that goes into answering that question, but I would say -- I already mentioned the fact that in fiscal '24, we released De La Soul's entire back catalog physically and digitally, that was a great source of revenue for us in fiscal '24, and it will be an ongoing source of revenue, but not at that level. So that's one of the things we factor in. We've talked about the changes with Spotify and their bundling. Billboard's estimated that will impact the industry at about $150 million a year. And we have factored that into our guide there. So, there's certainly some one-off items that I guess I'd classify as headwinds for us as we go into fiscal '25. And we certainly typically operate with, like I said before, a certain level of conservatism until we get to really the September quarter, halfway through our fiscal year, and see where we are and update at that point.

Then, last one for me. If you look into -- a little deeper into the AI and machine-learning types of investments you're putting in, sort of curious, do you think that's more of a revenue generator because of the ability to look for, I don't call it leakage in people who should be paying but aren't, or do you think it's more of a cost saver in automating internal or back office functions? How do you think about the payoff for those investments?

I think it's a little bit of both. There's certainly efficiencies that are created freeing up human resource, as we said. The other side of that is that we become better at licensing. We become better at the content that we are licensing and mining the catalog. And that certainly is a direct link to revenue generation. So we look at it really both ways insofar as the tools that we are implementing with existing platforms that we're using as well as new ones that we are assessing.

Great. Maybe last for me. If interest rates are going to stay in this higher for longer which Fed keeps talking about, do you think that overall does sort of put a damper on the pace of M&A or are you seeing adequate ROI in the pipeline, if you're looking at to not really view that as a material intermediate-term headwind? Thanks.

Based on the pipeline and the targets that we are looking at and the diligence that we are doing at this time, we are still seeing opportunities that are giving us ample opportunity or ample return within that deal flow. So for the time being, we're not seeing any kind of change there.

Great. Thanks, and congrats on a good year.

Thank you so much.

Thank you. And I see there are no further questions in the queue at this time. I will now turn the call back over to Golnar Khosrowshahi for any closing remarks.

Thank you, operator. We appreciate your interest in Reservoir Media. I wish to thank our talented team for their dedication and to our roster of creators who entrust us with their life work. We look forward to sharing our fiscal first quarter results with you later this summer. Thank you.

That does conclude our conference call. Thank you all for your participation. And you may now disconnect.