Greetings, and welcome to the Reservoir Media Q2 Fiscal 2026 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Ms. Jackie Marcus. Please go ahead.

Thank you operator. Good morning everyone and thank you for participating in todays earnings conference call. Reservoir Media issued a press release with results for its second quarter of fiscal year 2026 ended September 30, 2025, 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, 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.

Thank you, Jackie. Good morning, everyone, and thank you for joining us today. Our performance in the second fiscal quarter reflects the effectiveness of our long-term growth strategy, leveraging a diverse high-quality catalog and scaling through a balanced mix of catalog development, strategic signings and global diversification. This disciplined approach continues to strengthen our market position and create new opportunities for value creation. We grew 12% on the top line with 7% from organic revenue and 5% from acquisitions. We continue to see great demand for our assets with notable and high-value sync placements, increased engagement in emerging markets and strong listenership of our catalog. Reservoir's established reputation as caretakers of legacies recently earned us the exciting opportunity to welcome the catalog of the iconic innovator and pop culture figure, Miles Davis. In September, we announced our acquisition of Davis' publishing catalog as well as rights to his recorded music and name and likeness. With the objective of growing digital listenership and cultivating new listeners. Together with the estate, we have hit the ground running to pursue and collaborate on celebrations commemorating the 100th anniversary of Davis' birth next year in 2026. A few of those activities include miles and Juliet, the upcoming feature film recounting Davis' Love affair with Juliette Gréco. Developed in partnership with River Road Entertainment and Mick Jagger's Jagged Films. A live symphonic show pairing gave us his iconic sound with original orchestrations and cherished footage bringing his legacy to life. An international tour of MEB formerly Miles Electric Band with 4 nights of special programming at San Francisco Jazz in March of next year. Reissues and re-releases of Davis' music including a box set of the complete live of the Plugged Nickel 1965 live album expected January 30 and others, plus co-branded collaborations across fashion,…

Thank you, Golnar, and good morning, everyone. Our second fiscal quarter results exceeded our expectations and exhibit not only the quality of our portfolio of assets, but also the ongoing execution of our proven strategy to integrate those assets into our platform and enhance their value. Revenue for the second fiscal quarter was $45.4 million, a 7% year-over-year improvement on an organic basis and a 12% increase when including acquisitions. This was led by the 21% growth in our recorded music segment and the 8% increase we had in Music Publishing. Turning to our operating expenses, the total cost of revenue increased 11% compared to the prior year quarter, while our administration expense and amortization and appreciation costs grew 15% and 18%, respectively, versus the prior year. Looking at operating performance for the second quarter, OIBDA was $18.2 million, an increase of 10% year-over-year and adjusted EBITDA was also up 10% to $19.4 million compared to our fiscal Q2 in the prior year. The increases in OIBDA and adjusted EBITDA were due to an increase in revenue and gross margin partially offset by an increase in administration expenses. Interest expense was $6.7 million for the quarter versus $5 million in the prior year driven primarily by a higher debt balance due to the use of funds and acquisitions of music catalogs and writer signings as well as an increase in effective interest rates. Net income for the second quarter was approximately $2.2 million compared to net income of $152,000 in the second quarter of fiscal 2025. The increase in net income was driven primarily by the decrease in loss on fair value of swaps and an increase in operating income, partially offset by increases in interest expense, loss on foreign exchange and income tax expense. This resulted in diluted earnings…

Thank you, Jim. Having just reached the halfway point of our fiscal year, we are well positioned to achieve our full year financial goals. The addition of musical icon Miles Davis to our portfolio of assets provides us with access to unique value enhancement opportunities. It also serves as another proof point for estates and living legends that the most important artists of a genre or generation placed their trust with Reservoir. We have an active and robust deal pipeline of over $1 billion and look forward to sharing news of our next partnerships with you. With that, we will now open the line for questions.

[Operator Instructions] And our first question comes from Griffin Boss with B. Riley Securities.

So, strong organic growth, that's great to see 7% year-over-year. Is there any context or further context you can give it to what's driving that? Or maybe how you see that comparing to the broader industry? Is this a result of initiatives that Reservoir itself has implemented after acquiring certain catalogs or rights? Or is this just -- is it primarily maybe a function of favorable timing on existing catalogs?

Griffin, so I think that with respect to 7% organic growth, that's really about where we would expect to be with some of the tailwinds in the industry and expected growth in the industry. We're always working to maximize and grow the new assets that we acquire. We're often able to add value and really see some significant organic growth on those assets when we first bring them into the fold. We're certainly looking forward to doing that on Miles Davis. But we also have specific factors that might go the other way, as we have hit songs in the prior year that come down in the current year. All that goes into organic growth. But I would say 7% is kind of the baseline of where we would expect to be, and we always strive to do better than the industry. So that's kind of how we look at it.

And then I wanted to shift over, I just have a couple of quick ones regarding Miles Davis catalog, then I'll pass it off. But in terms of that acquisition, Golnar, you just mentioned that pipeline obviously still sits at over $1 billion, which is nice to see. Was Miles Davis a part of that pipeline that you saw? Or was this an off-market deal? Can you just discuss maybe the dynamics there?

Sure. It was -- Miles Davis was included in the pipeline. I wouldn't characterize it as off market as there was a process around that transaction with a conversation that began with the estate in November of 2023. And then from there, the relationship evolved and a formal process was kicked off.

Okay. Got it. And just in terms of -- when you're talking about collaborating with the estate there on these value enhancement opportunities, you mentioned the number expected for the centennial in 2026. Is there going to be maybe a step-up in administration -- administrative expenses or rather OpEx associated with that versus maybe what you would expect to see had you not acquired that catalog?

No. From an administration standpoint, it doesn't have an impact on our ingestion and the resources around our ingestion we would be reallocating marketing resource to focus on these initiatives, but that's all being handled through our internal teams at this moment.

Understood. It's great to see the ongoing process here, progress.

And our next question comes from Richard Baldry with ROTH Capital Partners.

You talked about sort of the scale or timing of some of the onetime things that appear to be ahead like the Monster Mash movie or Miles Davis' 100th birthday events. Are they similar to things like we've seen when you did De La Soul, would it be less pronounced or more? And when would those tend to be rolled into the P&L.

So, those are certainly onetime events, and I anticipate both of the examples that you cited would be coming through in calendar '20 -- beginning in calendar '26. Specific to Miles, that's exactly -- that's when the centennial begins, and we look at that as a 12- to 18-month window of activations that would be contributing. So -- and we view those as onetime events that would contribute to long-term value. So there would be some sustainable benefits that we would have afterwards.

And the G&A side came down a little bit sequentially. How do we think about that going forward? Is sort of the first half run rate, what we should be thinking about? Was there something onetime in the first quarter that came down adn so second quarter is more where we should be thinking for modeling?

Yes. I think that we -- the driver of changes in -- on the G&A side is largely driven by the management business. You see that in the other revenue that we report and the manager compensation sits in G&A, but it's really driven by that revenue. So as that goes up or down from quarter-to-quarter, it's going to have an impact our G&A. I would say that putting that piece aside, we're really at about the run rate that we expect to be in Q2 for the balance of the year. some minor pushes and pulls, but nothing significant on the other 2 segments.

Last for me. If we look at the organic growth, is there a way to piece to the park, you hear more and more about pricing on the sort of digital subscription side. How much of that do you think is baked in already? Or it's just sort of you think will be a steady-state organic expander versus your own efforts to drive things like Sync and broader usage of the catalog?

Yes. It's really a mix of all of that. When we think about industry growth, we certainly think about subscriber growth. We think about price increases that are anticipated and expected. And then we have the things that are more within our control, our own initiatives of increasing the value on assets that maybe we have recently acquired or taking advantage of specific opportunities for things that have been in our catalog for a long time. Monster Mash is a good example of that, where we look forward to increasing the revenue on asset as opportunities arise, and we'll have that coming into next year. So it's really a mix of all of those things.

This now concludes our question-and-answer session. I would like to turn the floor back over to Golnar Khosrowshahi for closing comments.

Thank you, operator. We remain on track to achieve our full year financial guidance through top line expansion and continued cost containment. We believe our portfolio is a best-in-class representation of the importance of diversity and music and its ability to bring fans from around the world together. We appreciate your support and interest in Reservoir, and we'll speak with you in the new year. Thank you.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.