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Item 7. Management’s Discussion and Analysis

2026-05-28 compared with 2025-05-28 · 88 added, 101 removed, 280 unchanged (40% of the section changed)

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Unless otherwise noted, all references to Fiscal 2026 represent the fiscal year ended March 31, 2026 and all references to Fiscal 2025 represent the fiscal year ended March 31, 2025.

Recent Developments

On March 4, 2026, we announced that the Board formed the Special Committee to evaluate the Proposals.

On May 1, 2026, we announced that the Special Committee engaged Morgan Stanley & Co.

LLC as its financial advisor and Wachtell, Lipton, Rosen & Katz as its legal counsel in connection with the Special Committee’s evaluation of the Proposals.

There can be no assurance that any definitive agreement will result from either of the Proposals or that any transaction will be consummated with Irenic, Richmond Hill, Wesbild or any other party.

Business Overview

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In return for promoting, placing, marketing and administering the creative output of a songwriter or engaging in those activities for other rightsholders, our Music Publishing business garners a share of the revenues generated from use of the musical compositions.

The operations of our Music Publishing business are conducted principally through RMM, our global music publishing company headquartered in New York City, with operations in multiple countries through various subsidiaries, affiliates and nonaffiliated licensees and sub-publishers.

We own or control rights to a vast collection of musical compositions, including numerous pop hits, American standards, and motion picture and theatrical compositions.

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The principal costs associated with our Music Publishing business are as follows:

● Writer Royalties and Other Publishing Costs ––the A&R costs associated with (i) paying royalties to songwriters, co-publishers and other copyright holders in connection with income generated from the uses of their works and (ii) signing and developing songwriters, all of which are classified as cost of revenue;

● Writer Royalties and Other Publishing Costs –– the artist and repertoire (“ A&R ”) costs associated with (i) paying royalties to songwriters, co-publishers and other copyright holders in connection with income generated from the uses of their works and (ii) signing and developing songwriters, all of which are classified as cost of revenue;

● Administration Expenses ––the costs associated with general overhead, and other administrative expenses, as well as selling and marketing.

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The second is the active marketing, promotion, distribution, sale and license of previously recorded and subsequently acquired catalog recordings (the “ Catalog ”).

The third is acquisition of full or partial interests in existing record labels, sound recording catalogs or income rights to a royalty stream associated

with an established recording artist or producer contract in connection with existing sound recordings.

The third is acquisition of full or partial interests in existing record labels, sound recording catalogs or income rights to a royalty stream associated with an established recording artist or producer contract in connection with existing sound recordings.

Acquisition of these income participation interests are typically in connection with recordings that are owned, controlled, and marketed by other record labels.

Our recorded music businesses are both primarily handled by our Chrysalis Records label based in London and our Tommy Boy label based in New York City.

In addition, we own and manage some select Catalog recorded music under our Philly Groove Records and Reservoir Recordings labels.

We have a small roster of Current Artists for whom we release new music.

We also own income participation interests in recordings by The Isley Brothers, The Commodores, Wisin and Yandel, Alabama and Travis Tritt, and an interest in the Loud Records catalog containing recordings by the Wu-Tang Clan.

Our core Catalog includes recordings under the Chrysalis Records label by artists such as Sinéad O’Connor, The Specials, Generation X and The Waterboys, and De La Soul, as well as recordings under the Tommy Boy record label by artists such as House of Pain, Naughty By Nature, and Queen Latifah.

Our Current Artist and Catalog recorded music distribution is handled by a network of distribution partners.

Chrysalis Records’ current frontline releases are distributed through Secretly Distribution, with prior frontline releases distributed via PIAS.

Chrysalis Records and Tommy Boy catalogues are distributed via our agreements with MERLIN, AMPED, Proper and other partners.

Through our distribution network, our music is sold in physical retail outlets as well as in physical form to online physical retailers, such as amazon.com, and distributed in digital form to an expanding universe of digital partners, including streaming services such as Amazon, Apple, Deezer, SoundCloud, Spotify, Tencent Music Entertainment Group and YouTube;

radio services such as iHeart Radio and SiriusXM;

and to download services.

Our recorded music businesses is operated by our label teams based in London and New York City, which release music from our labels Chrysalis Records, Tommy Boy Music, New State and Reservoir Recordings.

We primarily manage Catalog recorded music, but we have a small roster of current artists for whom we release new music.

We also own income participation interests in recordings by The Isley Brothers, The Commodores, Wisin and Yandel, Alabama and others.

Our core Catalog includes recordings under the Chrysalis Records label by artists such as Sinéad O’Connor, The Specials, Generation X and The Waterboys, and De La Soul, recordings under the Tommy Boy label by artists such as Coolio, House of Pain, Naughty By Nature and Queen Latifah, plus select catalog artists on Fool’s Gold Records, which we also distribute.

Our Current Artist and Catalog recorded music distribution is handled by a mix of direct deals, such as with Amazon, Apple, TikTok and YouTube, plus a network of distribution partners, including MERLIN, AMPED and Proper.

Chrysalis Records’ current frontline releases are distributed through Secretly Distribution.

Through our distribution network, our music is being sold in physical retail outlets, as well as in physical form to online physical retailers, such as amazon.com, and distributed in digital form to an expanding universe of digital partners, including streaming services such as Amazon, Apple, Deezer, SoundCloud, Spotify, Tencent Music Entertainment Group and YouTube, radio services such as iHeart Radio and SiriusXM, and download services.

We also license music digitally to fitness platforms such as Apple Fitness+, Equinox, Hydrow and Peloton and to social media outlets, such as Facebook, Instagram, TikTok and Snap.

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and product costs to manufacture, package and distribute products to wholesale and retail distribution outlets, all of which are classified as cost of revenue;

● Administration Expenses ––the costs associated with general overhead and other administrative expenses as well as the costs associated with the promotion and marketing of recording artists and music, including costs to produce music videos for promotional purposes and artist tour support.

● Administration Expenses ––the costs associated with general overhead and other administrative expenses as well as costs associated with the promotion and marketing of recording artists and music, including costs to produce music videos for promotional purposes and artist tour support.

Use of Non-GAAP Financial Measures

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Interest expense

Gain (loss) on foreign exchange

Gain on foreign exchange

Loss on fair value of swaps

Other income (expense), net

Other (expense) income, net

Income before income taxes

Income tax expense

Net loss (income) attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Net income attributable to Reservoir Media, Inc.

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Total Revenue

Total revenues increased by $13,850 thousand, or 10%, during Fiscal 2025 compared to Fiscal 2024, driven by a 12% increase in Music Publishing revenue, a 4% increase in Recorded Music revenue, and a 12% increase in Other revenue related to the Company’s artist management business.

Total revenues increased by $16,958 thousand, or 11%, during Fiscal 2026 compared to Fiscal 2025, driven by a 9% increase in Music Publishing revenue and a 16% increase in Recorded Music revenue.

Music Publishing revenues represented 66% and 68% of total revenues during Fiscal 2026 and Fiscal 2025, respectively.

Recorded Music revenues represented 29% and 28% of total revenues during Fiscal 2026 and Fiscal 2025, respectively.

and international revenues represented 59% and 41% of total revenues, respectfully, during Fiscal 2025 and Fiscal 2024.

and international revenues represented 56% and 44% of total revenues, respectively, during Fiscal 2026.

and international revenues represented 59% and 41% of total revenues, respectively, during Fiscal 2025.

Total digital revenues increased by $9,845 thousand, or 11%, during Fiscal 2026 compared to Fiscal 2025.

Total digital revenues represented 58% and 54% of consolidated revenues during Fiscal 2025 and Fiscal 2024, respectively.

Total digital revenues represented 58% of consolidated revenues during Fiscal 2026 and Fiscal 2025.

Music Publishing revenues increased by $9,390 thousand, or 9%, during Fiscal 2026 compared to Fiscal 2025.

This increase in Music Publishing revenue was mainly driven by revenue from the existing catalog, which benefitted from price increases at multiple music streaming services that contributed to an increase in digital revenue, and acquisitions of catalogs.

Additionally, synchronization revenue increased during Fiscal 2025, driven primarily by the timing of licenses.

These factors were partially offset by a decrease in performance revenue, partially due to the timing of hit songs.

This increase in Music Publishing revenue was mainly driven by a $4,163 thousand increase in digital revenue, primarily due to the acquisition of additional music catalogs and continued growth at music streaming services, a $2,869 thousand increase in performance revenue driven by the performance of hit songs, a $1,114 thousand increase in Other revenue primarily attributable to acquired stage rights and an $897 thousand increase in synchronization revenue driven by the timing of licenses.

On a geographic basis, U.S.

Music Publishing revenues represented 58% of total Music Publishing revenues during Fiscal 2025 and Fiscal 2024.

International Music Publishing revenues represented 42% of total Music Publishing revenues during Fiscal 2025 and Fiscal 2024.

Music Publishing revenues represented 54% and 58% of total Music Publishing revenues during Fiscal 2026 and Fiscal 2025, respectively.

International Music Publishing revenues represented 46% and 42% of total Music Publishing revenues during Fiscal 2026 and Fiscal 2025, respectively.

Recorded Music revenues increased by $7,264 thousand, or 16%, during Fiscal 2026 compared to Fiscal 2025.

This increase in Recorded Music revenue includes royalty recoveries during Fiscal 2025 related to underreported usage for music catalogs (the “ Royalty Recovery ”).

In addition to the Royalty Recovery, Recorded Music revenue also benefited from continued growth at music streaming services and price increases at multiple music streaming services, and the acquisition of new catalogs.

These increases were partially offset by a decrease in physical revenue after robust sales of new De La Soul releases in Fiscal 2024.

This increase in Recorded Music revenues was mainly due to a $5,682 thousand increase in digital revenue, primarily due to the acquisition of additional music catalogs and continued growth at music streaming services, partially offset by the non-recurrence of royalty recoveries recognized during Fiscal 2025 related to underreported usage for music catalogs (the “ Royalty Recovery ”).

Additionally, the increase in Recorded Music revenues reflects a $1,211 thousand increase in synchronization revenue driven by the timing of licenses.

On a geographic basis, U.S.

Recorded Music revenues represented 55% of total Recorded Music revenues during Fiscal 2025 and Fiscal 2024.

International Recorded Music revenues represented 45% of total Recorded Music revenues during Fiscal 2025 and Fiscal 2024.

Recorded Music revenues represented 54% and 55% of total Recorded Music revenues during Fiscal 2026 and Fiscal 2025, respectively.

International Recorded Music revenues represented 46% and 45% of total Recorded Music revenues during Fiscal 2026 and Fiscal 2025, respectively.

Cost of Revenue

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Total cost of revenue

Cost of revenue increased by $1,952 thousand, or 4%, during Fiscal 2025 compared Fiscal 2024, primarily as a result of an increase in revenues.

Cost of revenue as a percentage of revenues decreased to 36% during Fiscal 2025 from 38% during Fiscal 2024, reflecting decreases in cost of revenue as a percentage of revenue for the Music Publishing and Recorded Music segments, as well as an increase in Other revenue related to the Company’s artist management business, which does not have a corresponding cost of revenue.

Cost of revenue increased by $4,561 thousand, or 8%, during Fiscal 2026 compared Fiscal 2025, primarily as a result of the increase in revenues.

Cost of revenue as a percentage of revenues decreased to 35% during Fiscal 2026 from 36% during Fiscal 2025, reflecting decreases in cost of revenue as a percentage of revenue for the Music Publishing and Recorded Music segments.

Writer royalties and other publishing costs for the Music Publishing segment increased by $3,309 thousand, or 7%, during Fiscal 2026 compared to Fiscal 2025, primarily as a result of the increase in Music Publishing revenues.

Writer royalties and other publishing costs as a percentage of Music Publishing revenues decreased to 41% during Fiscal 2026 from 42% during Fiscal 2025, driven primarily by the change in the mix of revenues by type and songwriting clients with their specific contractual royalty rates being applied to the revenues.

Artist royalties and other recorded music costs for the Recorded Music segment decreased by $1,342 thousand, or 10%, during Fiscal 2025 compared to Fiscal 2024, primarily as a result of the decrease in physical sales.

Artist royalties and other recorded music costs as a percentage of Recorded Music revenues decreased to 28% during Fiscal 2025 from 32% during Fiscal 2024, driven primarily by the change in the mix of sales by type to a lower percentage of physical sales, which carry higher costs than other types of revenues, and the Royalty Recovery, which did not have a corresponding cost of revenue.

Artist royalties and other recorded music costs for the Recorded Music segment increased by $1,252 thousand, or 10%, during Fiscal 2026 compared to Fiscal 2025, primarily as a result of the increase in Recorded Music revenues.

Artist royalties and other recorded music costs as a percentage of Recorded Music revenues decreased to 26% during Fiscal 2026 from 28% during Fiscal 2025, driven primarily by the change in the mix of revenues by type and songwriting clients with their specific contractual royalty rates being applied to the revenues.

Amortization and Depreciation

Our amortization and depreciation expenses are comprised of the following amounts (in thousands):

Music Publishing amortization and depreciation

Recorded Music amortization and depreciation

Other amortization and depreciation

Total amortization and depreciation

Amortization and depreciation expense increased by $4,484 thousand, or 17%, during Fiscal 2026 compared to Fiscal 2025, primarily driven by the acquisition of additional music catalogs.

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Total administration expenses

Total administration expenses were relatively flat during Fiscal 2025 compared to Fiscal 2024, reflecting the nonrecurrence of $2,700 thousand related to the write-off of recoupable legal expenses and attorneys’ fees incurred in connection with the Royalty Dispute described in Note 16, “ Contingencies and Commitments ” to the accompanying consolidated financial statements (the “ Recoupable legal fee write-off ”), partially offset by an increase in costs to support the Company’s growth, as well as an increase in Other administration expenses.

Expressed as a percentage of revenues, administration expenses decreased to 25% during Fiscal 2025 from 27% during Fiscal 2024, primarily as a result of the nonrecurrence of the Recoupable legal fee write-off and improved operating leverage as revenues increased.

Music Publishing administration expenses decreased by $535 thousand, or 2%, during Fiscal 2025 compared to Fiscal 2024.

Expressed as a percentage of revenues, Music Publishing administration expenses decreased to 23% during Fiscal 2025 from 26% during Fiscal 2024, primarily as a result of the nonrecurrence of the Recoupable legal fee write-off.

Recorded Music administration expenses decreased by $383 thousand, or 4%, during Fiscal 2025 compared to Fiscal 2024.

Expressed as a percentage of revenue, Recorded Music administration expenses decreased to 21% during Fiscal 2025 from 23% during Fiscal 2024, primarily due to taking advantage of operating leverage on the Recorded Music platform.

Total administration expenses increased by $4,744 thousand, or 12%, during Fiscal 2026 compared to Fiscal 2025, driven by increases in administration expenses in the Music Publishing and Recorded Music segments, as well as an increase in Other administration expenses.

This increase also reflects $328 thousand of professional fees and other costs associated with (i) the acquisition of ViralWave Content Consultancy DWC-LLC (“Viral Wave”), which closed in April 2026 (the “Viral Wave Acquisition”), and (ii) the Special Committee (the “Transaction costs”).

Expressed as a percentage of revenues, administration expenses were 25% during Fiscal 2026 and Fiscal 2025.

Music Publishing administration expenses increased by $2,538 thousand, or 10%, during Fiscal 2026 compared to Fiscal 2025.

Expressed as a percentage of revenues, Music Publishing administration expenses were 23% during each of Fiscal 2026 and Fiscal 2025.

Recorded Music administration expenses increased by $1,897 thousand, or 21%, during Fiscal 2026 compared to Fiscal 2025.

Expressed as a percentage of revenue, Recorded Music administration expenses increased to 22% during Fiscal 2026 from 21% during Fiscal 2025, primarily due to investments made in the Recorded Music business to address frontline opportunities, as well as increased compensation and other costs due to inflation.

Other administration expenses increased by $308 thousand, or 5%, during Fiscal 2026 compared to Fiscal 2025, primarily due to selling expenses associated with our artist management business, consisting mostly of manager compensation.

Operating Income

Operating income increased by $10,485 thousand, or 43%, during Fiscal 2025 compared to Fiscal 2024, primarily driven by revenue growth, an improvement in cost of revenue as a percentage of revenues and the nonrecurrence of the Recoupable legal fee write-off.

Operating income margin (operating income expressed as a percentage of revenues) increased to 22% during Fiscal 2025 compared to 17% during Fiscal 2024, primarily as a result of an improvement in cost of revenue as a percentage of revenues, the nonrecurrence of the Recoupable legal fee write-off and improved operating leverage as revenues increased.

Music Publishing operating income increased by $8,736 thousand, or 88%, during Fiscal 2025 compared to Fiscal 2024, primarily driven by revenue growth, an improvement in cost of revenue as a percentage of revenues and the nonrecurrence of the Recoupable legal fee write-off.

Music Publishing operating income margin increased to 17% during Fiscal 2025 compared to 10% during Fiscal 2024, primarily as a result of an improvement in cost of revenue as a percentage of revenues, the nonrecurrence of the Recoupable legal fee write-off and improved operating leverage as revenues increased.

Recorded Music operating income increased by $2,021 thousand, or 15%, during Fiscal 2025 compared to Fiscal 2024, primarily driven by revenue growth, an improvement in cost of revenue as a percentage of revenues and a decrease in Administration expenses.

Recorded Music operating income margin increased to 34% during Fiscal 2025 compared to 31% during Fiscal 2024, primarily as a result of an improvement in cost of revenue as a percentage of revenues and improved operating leverage as revenues increased.

Operating income increased by $3,170 thousand, or 9%, during Fiscal 2026 compared to Fiscal 2025, primarily driven by an increase in revenues, partially offset by an increase in amortization and depreciation and administration expenses.

Operating income margin (operating income expressed as a percentage of revenues) was 22% during each of Fiscal 2026 and Fiscal 2025.

Interest Expense

Interest expense increased by $4,569 thousand, or 21% during Fiscal 2026 compared to Fiscal 2025.

The increase in interest expense was driven primarily by an increase in borrowings due to use of funds in acquisitions of music catalogs and writer signings and an increase in effective interest rates.

The Company’s interest expense increased on the portions of its borrowings that are hedged beginning in October 2024, as its previous swap contracts matured on September 30, 2024, and new swap contracts became effective on the same date.

These factors were partially offset by the nonrecurrence of $620 thousand incurred in connection with settlement of the Royalty Dispute described in Note 16, “ Contingencies and Commitments ” to the accompanying consolidated financial statements.

Gain (Loss) on Foreign Exchange

Gain on foreign exchange was $578 thousand during Fiscal 2025 compared to a loss on foreign exchange of $102 thousand during Fiscal 2024.

The increase in interest expense was driven primarily by increased debt balances due to use of funds in acquisitions of music catalogs and writer signings, as well as an increase in effective interest rates.

The increase in the Company’s effective interest rates primarily reflects an increase on the portions of its borrowings that are hedged, as its swap contracts in effect during Fiscal 2026 have a higher fixed interest rate than the Company’s previous swap contracts, which were in effect during a portion of Fiscal 2025 until they matured on September 30, 2024.

Gain on Foreign Exchange

Gain on foreign exchange was $231 thousand during Fiscal 2026 compared to $578 thousand during Fiscal 2025.

This change was due to fluctuations in the two foreign currencies we are directly exposed to, namely the British pound sterling and the euro.

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This change was due to the marking to market of our interest rate swap hedges.

This change was driven primarily by the September 2024 decrease in the Secured Overnight Financing rate (“ SOFR ”), as well as the time value of the swaps that expired on September 30, 2024, partially offset by marking to market our current interest rate swap hedges.

Other Income (Expense), Net

Other income, net during Fiscal 2025 consisted of a $104 thousand gain recorded on the disposal of an equity investment during the period (the “ Investment Gain ”) and the Company’s share of proceeds related to underreported usage for acquired music catalogs that pertained to periods prior to the Company’s acquisition of the music catalogs, which totaled $823 thousand (the “ Recovery Income ”).

These factors were partially offset by a $500 thousand impairment of an investment (the “ 2025 Investment Write-down ”) and the Company’s share of loss recorded by an equity method investment (the “ EMI Loss ”).

Other expense, net during Fiscal 2024

consisted primarily of a $991 thousand impairment to write-down an equity investment to its estimated fair value (the “ 2024 Investment Write-down ”).

See Note 2, “ Summary of Significant Accounting Policies – Investments in Equity Affiliates ” to the accompanying consolidated financial statements for discussion about the Investment Gain, 2025 Investment Write-down and 2024 Investment Write-down.

Additionally, the loss during Fiscal 2025 reflects the September 2024 decrease in the Secured Overnight Financing rate (“ SOFR ”), as well as the time value of the swaps that expired on September 30, 2024.

Other (Expense) Income, Net

Other (expense) income, net during Fiscal 2026 was comprised primarily of the Company’s recognition of its share of losses incurred by equity method investments.

Other (expense) income, net during Fiscal 2025 consisted of a $104 thousand gain recorded on the disposal of an equity investment during the period (the “ Investment Gain ”) and the Company’s share of proceeds related to underreported usage for acquired music catalogs that pertained to periods prior to the Company’s acquisition of the music catalogs, which totaled $823 thousand (the “ Recovery Income ”).

These factors were partially offset by a $500 thousand impairment of an investment (the “ Investment Write-down ”) and the Company’s share of loss recorded by an equity method investment.

Income Tax Expense

Income tax expense increased to $3,328 thousand during Fiscal 2026 compared to $2,141 thousand during Fiscal 2025.

The increase in the income tax expense during Fiscal 2025 was primarily due to the increase of income before income taxes, partially offset by a lower effective income tax rate.

The increase in income tax expense during Fiscal 2026 was primarily due to an increase of income before income taxes.

The Company’s effective income tax rate during Fiscal 2026 was 29.8% compared to 21.7% during Fiscal 2025.

The decrease in the effective income tax rate during Fiscal 2025 reflects the non-recurrence of incremental tax expense due to a non-deductible impairment charge to write-down an equity investment in the U.K.

to its estimated fair value, which increased the Company’s effective income tax rate by 21.1% during Fiscal 2024.

Additionally, the Fiscal 2025 effective income tax rate reflects return to provision reconciliation related to certain international tax liabilities, as well as an increase in earnings, which reduced the relative impact of statutory limitations on certain deductions.

These factors were partially offset by the non-recurrence of an incremental tax benefit arising from a change in estimate of the applicable tax rate used to measure the Company’s state and local deferred tax liabilities in the U.S., which decreased the Company’s effective income tax rate by 34.6% during Fiscal 2024.

Net income increased by $6,894 thousand, to $7,731 thousand during Fiscal 2025 compared to $837 thousand during Fiscal 2024, driven primarily by a $10,485 thousand increase in operating income and a $1,419 increase in other income (expense), net during 2025.

These factors were partially offset by a $3,089 thousand increase in Loss on fair value of swaps and a $1,806 thousand increase in income tax expense during Fiscal 2025.

The increase in the effective income tax rate during Fiscal 2026 reflects the non-recurrence of a Fiscal 2025 return to provision reconciliation related to certain international tax liabilities, partially offset by an increase in earnings, which reduced the relative impact of statutory limitations on certain deductions.

Net income increased by $96 thousand to $7,827 thousand during Fiscal 2026 compared to $7,731 thousand during Fiscal 2025, driven primarily by a decrease in loss on fair value of swaps and an increase in operating income, partially offset by increases in interest expense and income tax expense.

Non-GAAP Reconciliations

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We use OIBDA as our primary measure of financial performance.

The following tables reconcile operating income to OIBDA (in thousands):

The following tables reconcile consolidated operating income to OIBDA and presents OIBDA by segment (in thousands):

Cost of revenue

Administration expenses

Amortization and depreciation

Operating income

Amortization and depreciation expenses

Music Publishing

Operating income

Amortization and depreciation expenses

Cost of revenue

Administration expenses

Recorded Music

Operating income

Amortization and depreciation expenses

OIBDA increased by $11,798 thousand, or 24%, during Fiscal 2025 compared to Fiscal 2024, driven by an $8,460 thousand increase in Music Publishing OIBDA and a $3,609 thousand increase in Recorded Music OIBDA.

Expressed as a percentage of revenue, OIBDA

Margin increased to 39% during Fiscal 2025 from 34% during Fiscal 2024, primarily as a result of a decrease in cost of revenue as a percentage of revenues, the nonrecurrence of the Recoupable legal fee write-off and improved operating leverage as revenues increased.

Music Publishing OIBDA increased by $8,460 thousand, or 29%, during Fiscal 2025 compared to Fiscal 2024.

Expressed as a percentage of revenue, Music Publishing OIBDA Margin increased to 35% during Fiscal 2025 compared to 30% during Fiscal 2024, reflecting a decrease in cost of revenue as a percentage of revenues, the nonrecurrence of the Recoupable legal fee write-off and improved operating leverage as revenues increased.

Recorded Music OIBDA increased by $3,609 thousand, or 19% during Fiscal 2025 compared to Fiscal 2024.

Expressed as a percentage of revenue, Recorded Music OIBDA Margin increased to 51% during Fiscal 2025 from 45% during Fiscal 2024, reflecting a decrease in cost of revenue as a percentage of revenues and improved operating leverage as revenues increased.

Cost of revenue

Administration expenses

OIBDA increased by $7,654 thousand, or 12%, during Fiscal 2026 compared to Fiscal 2025, driven by a $3,543 thousand increase in Music Publishing OIBDA and a $4,115 thousand increase in Recorded Music OIBDA.

Expressed as a percentage of revenue, OIBDA Margin was 39% during each of Fiscal 2026 and Fiscal 2025.

Music Publishing OIBDA increased by $3,543 thousand, or 9%, during Fiscal 2026 compared to Fiscal 2025, driven primarily by an increase in revenues, partially offset by an increase in administration expenses.

Expressed as a percentage of revenue, Music Publishing OIBDA Margin was 35% during each of Fiscal 2026 and Fiscal 2025.

Recorded Music OIBDA increased by $4,115 thousand, or 18% during Fiscal 2026 compared to Fiscal 2025, driven primarily by an increase in revenues, partially offset by an increase in administration expenses.

Expressed as a percentage of revenue, Recorded Music OIBDA Margin increased to 52% during Fiscal 2026 from 51% during Fiscal 2025, reflecting an improvement in artist royalties and other recorded music costs as a percentage of Recorded Music revenues.

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

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Amortization and depreciation

(Gain) loss on foreign exchange (a)

Gain on foreign exchange (a)

Loss on fair value of swaps (b)

Non-cash share-based compensation (c)

Recoupable legal fee write-off (d)

Other (income) expense, net (e)

Transaction costs (d)

Other expense (income), net (e)

Adjusted EBITDA

NM – Not meaningful

(a) Reflects the loss (gain) on foreign exchange fluctuations.

(b) Reflects the non-cash loss or (gain) on the mark-to-market of interest rate swaps.

(a) Reflects the gain on foreign exchange fluctuations.

(b) Reflects the non-cash loss on the mark-to-market of interest rate swaps.

2021 Omnibus Incentive Plan.

(d) Reflects the write-off of recoupable legal expenses and attorneys’ fees incurred in connection with the Royalty Dispute described in Note 16, “ Contingencies and Commitments” to the accompanying consolidated financial statements.

(e) Reflects the Investment Gain, Recovery Income, 2025 Investment Write-down and EMI Loss during Fiscal 2025 and reflects the 2024 Investment Write-down during Fiscal 2024.

Consolidated Adjusted EBITDA increased by $10,102 thousand, or 18%, during Fiscal 2025 compared to Fiscal 2024, primarily as a result of revenue growth, a decrease in cost of revenue as a percentage of revenues and improved operating leverage as revenues increased.

(d) Reflects transaction costs incurred in connection with the Viral Wave Acquisition and by the Special Committee.

(e) Reflects the Company’s share of losses recorded by equity method investments during Fiscal 2026.

Reflects the Investment Gain and Recovery Income, partially offset by the Investment Write-down and the Company’s share of loss recorded by an equity method investment during Fiscal 2025.

Consolidated Adjusted EBITDA increased by $7,868 thousand, or 12%, during Fiscal 2026 compared to Fiscal 2025, primarily as a result of an increase in revenues, partially offset by an increase in administration expenses.

Liquidity and Capital Resources

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Cash provided by operating activities was $50,140 thousand during Fiscal 2026 compared to $45,279 thousand during Fiscal 2025.

The primary driver of the $9,086 thousand increase in cash provided by operating activities during Fiscal 2025 as compared to Fiscal 2024 was an increase in earnings.

This factor was partially offset by a reduction in cash provided by working capital, driven primarily by the timing of collections of accounts receivable and payments of accounts payable.

The primary drivers of the $4,861 thousand increase in cash provided by operating activities during Fiscal 2026 as compared to Fiscal 2025 were increases in earnings and cash provided by working capital.

The increase in cash provided by working capital was due primarily to the timing of payments of accounts payable and the timing of collections of accounts receivable and royalty advances and recoupments, partially offset by the timing of royalty payments to artists.

Investing Activities

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Cash provided by financing activities was $64,203 thousand during Fiscal 2026 compared to $54,518 thousand during Fiscal 2025.

The increase in cash provided by financing activities in Fiscal 2025 reflects a $32,000 thousand increase in borrowings used for investing activities and a $6,000 thousand decrease in repayments towards the secured line of credit.

The increase in cash provided by financing activities in Fiscal 2026 reflects an increase in borrowings from the secured line of credit, partially offset by an increase in repayments of the secured line of credit.

Our primary sources of liquidity are the cash flows generated from our subsidiaries’ operations, available cash and cash equivalents and funds available for drawing under our Senior Credit Facility (as described below).

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The interest rate on borrowings under the Senior Credit Facility is equal to, at our option, either the sum of a base rate plus a margin of 1.00% or the sum of a Secured Overnight Financing Rate (“ SOFR ”) rate plus a margin of 2.00%, in each case subject to a 0.25% increase based on a consolidated net senior debt to library value ratio.

RMM is also required to pay an unused fee in respect of unused

commitments under the Senior Credit Facility, if any, at a rate of 0.25% per annum.

RMM is also required to pay an unused fee in respect of unused commitments under the Senior Credit Facility, if any, at a rate of 0.25% per annum.

The Senior Credit Facility also includes an “accordion feature” that permits RMM to seek additional commitments in an amount not to exceed $150,000 thousand.

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December 2027

August 29, 2025

December 2027

On September 30, 2024, three previous interest rate swaps expired with original notional amounts of $8,875 thousand, $88,098 thousand and $53,030 thousand, respectively.

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Music Publishing revenues are earned from the receipt of royalties relating to the licensing of rights in musical compositions and the sale of published sheet music and songbooks.

The receipt of royalties principally relates to amounts earned from the public performance of musical compositions, the mechanical reproduction of musical compositions on recorded media including digital formats and the use of musical compositions in synchronization with visual images.

The receipt of royalties principally relates to amounts earned from the public

performance of musical compositions, the mechanical reproduction of musical compositions on recorded media including digital formats and the use of musical compositions in synchronization with visual images.

Music publishing royalties, except for synchronization royalties, generally are recognized when the sale or usage occurs.

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Under ASC 928, Reservoir capitalizes as assets certain advances, which it believes are recoverable from future royalties to be earned by the recording artist or songwriter, when paid.

Recoverability is assessed upon initial commitment of the advance based upon Reservoir’s forecast of

anticipated revenue from the sale of future and existing sound recordings or musical compositions.

Recoverability is assessed upon initial commitment of the advance based upon Reservoir’s forecast of anticipated revenue from the sale of future and existing sound recordings or musical compositions.

Reservoir regularly updates the recoverability assessment as additional data is available.

18 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis