Kobalt Reports First Year of Profitability, With 15% Growth in Collections

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

In the fiscal year ending June 30, 2021, Kobalt sold two businesses: In May 2021, it sold its AWAL label services company and neighboring rights businesses for $430 million, which yielded a gain of over $335 million (and was recently approved by U.K. regulators). Before that, Kobalt’s regulated music fund business, Kobalt Capital sold Fund I to Hipgnosis in November 2020 for $323 million. In the company’s current fiscal year, Kobalt Capital sold Fund II to KKR and Dundee Partners for $1.1 billion.

“This past couple of years have been transformative for Kobalt,” said CEO Laurent Hubert. “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 founder and chairman Willard Ahdritz. “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.”

Kobalt Music Publishing grew revenue by 9.6% year over year to $478 million, despite the pandemic. Highlights include the company’s credits on the Weeknd’s smashes “Blinding Lights” and “Save Your Tears” (both co-written by Max Martin), Doja Cat’s “Kiss Me More”, Karol G’s “Bichota”, Justin Bieber’s “Lonely” (co-written by Finneas) and “Peaches” (co-written by Andrew Watt), Kali Uchis’ “Telepatia” and others, capping off the fiscal year on Billboard’s Publishers Quarterly with a 14.71% market share.

AMRA, its digital collection society, grew overall revenue by 40.2% to $110 million. Additionally, AMRA processed 29 billion music royalties (up 40% YoY) to distribute almost $200 million of digital royalties directly to songwriters and rightsholders.

Finally, Kobalt Capital Limited sold its acquisition assets in a publicly announced transaction to Hipgnosis Songs for $323 million. In addition, in October 2021, KCL sold the second fund, launched in 2017, for approximately $1.1 billion.

 

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