Kobalt Reports Fiscal Year 2020/2021 Financials With 15% Growth In Gross Collections Up To $548M With Profitability Of Over $48M EBITDA

Kobalt

Kobalt Expects Continued Year Over Year Growth Approaching $625M and $65M EBITDA Profit in FY 2021/2022

Amid Pandemic, Kobalt won ASCAP Latin Music Independent Publisher Of The Year Award, BMI Gospel Publisher of the Year, and BMI Hip-Hop/R&B Publisher of the Year

MARCH 7, 2022 - Kobalt today reported that its gross collections grew by 15% to $548M in the fiscal year ending June 30, 2021. The company also reported its first-ever year of profitability with $48.5M EBITDA. The company also expects to approach $625M in gross collections and near $65M in EBITDA profit for the next fiscal year ending June 30, 2022.

In the fiscal year ending June 30, 2021, Kobalt sold two businesses for impressive gains after years of growth and development. In May 2021, Kobalt sold its AWAL and Neighboring Rights businesses for $430M, which yielded a gain of over $335M. Before that, Kobalt’s regulated music fund business, Kobalt Capital sold Fund I to Hipgnosis in November 2020 for $323M. In the company’s current fiscal year, Kobalt Capital sold Fund II to KKR and Dundee Partners for $1.1B.

“This past couple of years have been transformative for Kobalt,” said Laurent Hubert, CEO of Kobalt. “Our financial success starts with our team who support some of the best songwriters in the world. Year after year, Kobalt’s hard work and focus continues to receive recognition within the industry. Across genres, Kobalt received awards such as ASCAP’s Latin Independent Publisher of the Year, BMI’s Gospel Publisher of the Year, and BMI’s Hip-Hop/R&B Publisher of the Year, all of which are very high honors.”

“Kobalt has been a trailblazer in music since 2001 by putting songwriters first, introducing transparency, music as a service and big technology,” said Willard Ahdritz, Founder and Chairman of Kobalt. “We are proud of what we have achieved in changing the industry so far. Even though the industry still needs improvement to ensure songwriters are paid fairly, it’s never been a better time to be a songwriter, and Kobalt will continue to fight on their behalf. Today, with our global position in publishing, we can drive even more improvements for songwriters. I am excited to double down on music publishing as we will be driving more positive industry transformation through our unique global digital society, AMRA.”

FY 20/21 Company Highlights

Kobalt Music Publishing (Including Synch) - Despite challenges due to the global pandemic, Kobalt’s publishing division grew revenue by 9.6% YoY to $478M. Kobalt continued to dominate the US charts with co-writes on hits from The Weeknd "Blinding Lights" and "Save Your Tears" (both co-written by Max Martin), Doja Cat "Kiss Me More", Karol G "Bichota", Justin Bieber "Lonely" (co-written by Finneas) and "Peaches" (co-written by Andrew Watt), Kali Uchis "Telepatia" and many more, capping off their fiscal year on Billboard’s Publishers Quarterly with a 14.71% market share. This, combined with a stellar roster of clients, includes Andrew Watt, Finneas O'Connell, Ozuna, Karol G, Lorde, Phoebe Bridgers, Stevie Nicks, The Foo Fighters, Roddy Ricch, Gunna, Kali Uchis, and many more. In addition, Kobalt Music Publishing continued to bring in awards in 2021, including ASCAP Latin Music Independent Publisher Of The Year Award, BMI Gospel Publisher of the Year, and BMI Hip-Hop/R&B Publisher of the Year. Kobalt’s successful fiscal year can be attributed to the hard work and diligence of the best creative, synch, operations, tech, and, overall, global infrastructure in the music industry. Kobalt also continues to work closely with some of the biggest legacy artists in the world, including Stevie Nicks, Lindsey Buckingham, Andrew Gold, John Denver and more, further proving Kobalt has become a destination for songwriters across genres and generations.

AMRA - A record year for AMRA - The leading global digital collection society. AMRA grew overall revenue by 40.2% to $110M. Additionally, AMRA processed a record-breaking 29 billion music royalties (up 40% YoY) to distribute almost $200 million of digital royalties directly to songwriters and rightsholders. AMRA - a key strategic part of Kobalt, recognized its growth predominantly from significant growth from its current client roster as well as new client acquisitions and new digital licensing services agreements. AMRA’s business model and specific dedication to using its state-of-the-art technology platform to ensure global writers and artists are paid accurately and fairly for digital usages around the world is solidified as the next generation of PRO’s. AMRA’s territorial scope, which is the broadest in the industry, also continues to generate revenue growth. AMRA’s business model is built to meet the needs of the rapid growth of digital global music consumption and is once again positioned to set new standards for global digital collections among societies. AMRA’s business model is also not affected by the pandemic the same way the rest of the industry, due to revenue being heavily skewed to digital collections. Today, AMRA’s global roll-out has reached all corners of the world outside of the US and includes direct digital collections for China, Brazil, and Japan, and keeps growing.

Kobalt Capital Limited (KCL) - KCL launched the first music royalty fund in 2011. It was a first of its kind as a pure music rights regulated fund. During the financial year and 9 years after the launch, the Fund sold its acquisition assets in a publicly announced transaction to Hipgnosis Songs for $323 million. The sale, together with the annual royalty income over the years, generated significant returns to its investors and contributed to KCL’s over 200% increase in gross revenue during the FY20/21. In addition, in October 2021, KCL sold the second fund, launched in 2017, for approximately $1.1 billion.

ABOUT KOBALT

Kobalt is a music and technology company built for artists, songwriters, publishers and labels as an alternative to the traditional music business model. Across 13 global offices, the company serves over 700,000 songs, 30,000 songwriters and 500 publishers, including Roddy Ricch, Max Martin, FINNEAS, Karol G, Andrew Watt, Stevie Nicks, Phoebe Bridgers, The Lumineers, Gunna, Justin Quiles, The Foo Fighters, Paul McCartney, and many more.  On average, Kobalt represents over 40% of the top 100 songs and albums in both the US and the UK.

Through Kobalt’s unique services and technology platform that tracks and collects royalties for the trillions of micro-payments in digital music today, the company continues to drive innovation in music and technology. Kobalt’s latest innovation, AMRA, a global digital society, has reached all corners of the world outside of the US and includes direct digital collection for China, Brazil, and Japan, and more.

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