Reservoir Media, Inc. Financial Results for Q4 2023

As of May 31, 2024

Introduction

Reservoir Media, Inc. (ticker: RSVRW), listed on the NASDAQ under the Communication Services sector and Entertainment industry, has released its financial results for the fourth quarter (Q4) of the fiscal year ending December 31, 2023. The report details the company's financial standing, performance metrics, and comparative analysis with its peers. The following is a detailed analysis of the financial results.

Financial Overview

Income Statement

The total revenue for Q4 2023 was $39.15M, with a cost of revenue amounting to $20.71M. This resulted in a gross profit of $18.43M, giving a gross profit margin of 47.08%. The company's selling, general, and administrative expenses totaled $9.67M. Other significant expenses included depreciation and amortization at $6.37M. The operating income was recorded at $8.76M, with an EBITDA of $15.14M, representing an EBITDA margin of 38.67%.

After adjusting for other income and expenses, the net income before tax stood at $4.06M. After accounting for the income tax expense of $1.21M, the net income was $2.80M, translating to an earnings per share (EPS) of $0.04. The weighted average shares outstanding were 64.83M, while the diluted shares were 65.60M.

Balance Sheet

Reservoir Media reported total current assets of $70.91M, including cash and cash equivalents at $18.13M, and net receivables amounting to $33.23M. The company's total non-current assets were $712.63M, primarily driven by intangible assets valued at $640.22M. This results in total assets of $783.53M.

The company's current liabilities stood at $60.37M, with account payables at $9.02M and short-term debt at $439,152. Long-term debt was reported at $330.79M. Overall, the total liabilities amounted to $429.05M. The total stockholders' equity was $352.99M.

Cash Flow Statement

Details regarding the company's cash flow activities were not disclosed. However, it is important to note the company's operating cash flow per share over the trailing twelve months (TTM) was reported at $0.35, with a free cash flow per share of $-0.38.

Financial Performance Ratios

Comparatively, Reservoir Media exhibited a gross profit margin of 47.08%, an operating profit margin of 22.38%, and a net profit margin of 7.15%. The company's return on equity (ROE) was 0.79%, indicating modest profitability relative to equity. The debt to equity ratio was reported at 93.63%, highlighting the company’s leverage.

In comparison to peers, Reservoir Media performed favorably in the price-to-earnings ratio (P/E) TTM, with a notable figure of 831.37x. On the liquidity front, the current ratio stood at 1.17, and the quick ratio was 0.85. The cash ratio was reported at 0.30.

Peer Comparison

Reservoir Media’s performance metrics were evaluated against industry peers. Notably, the gross profit margin stood at 47.08%, whereas the average for this ratio among peers was 42.04%. In terms of net profit margin, Reservoir Media's figure was 7.15%, compared to an industry average of 3.85%. In liquidity measurements, Reservoir Media's current and quick ratios were comparatively lower than leading peers but above some underperformers.

Conclusion

Reservoir Media, Inc. has shown resilience and profitability in the fourth quarter of 2023, despite operating in a highly competitive industry. The company has maintained a healthy balance sheet and showed positive revenue growth. Future outlook remains cautiously optimistic given the current market conditions and strategic position within the industry.

Full Financial Report