SIRIUS XM HOLDINGS INC. SiriusXM Reports First Quarter 2024 Operating and
Financial Results
- First Quarter 2024 Revenue of $2.16 Billion; Up 1% Year-Over-Year
- Ad Revenue Up 7% Year-Over-Year
- Net Income of $265 Million; Diluted EPS of $0.07
- Adjusted EBITDA of $650 Million; Up 4% Year-Over-Year
- Free Cash Flow of $132 Million; Down 8% Year-Over-Year
- Company Reiterates 2024 Financial Guidance
NEW YORK - April 30, 2024 - SiriusXM today announced first quarter 2024 operating and financial results, including revenue of $2.16 billion, an increase of 1% compared to the first quarter in 2023. The company recorded net income of $265 million in the first quarter of 2024 compared to $233 million in the prior year's quarter. Net income per diluted common share was $0.07 in the first quarter of 2024 compared to $0.06 in the first quarter of 2023. Additionally, the company reported that its ad revenue increased 7% compared to the same period in 2023, offsetting a 1% drop in subscription revenue in the same 2023 period.
Adjusted EBITDA was $650 million in the first quarter of 2024, up 4% compared to the first quarter of 2023 with a 30% EBITDA margin, the result of higher revenue and lower fixed costs.
"I'm pleased to share solid first quarter financial results, underscored by record ad revenue for a first quarter and strong consumer engagement with our newly-released content," stated CEO Jennifer Witz. "And while still in its infancy, we are starting to see promising early indicators from new users of our recently rebuilt SiriusXM app. We have significantly stepped-up the pace of experimentation and innovation, a critical lever in our mission to deliver improved subscriber performance while maintaining a disciplined approach to spending in our focus on profitability."
"Our reiterated guidance for revenue, adjusted EBITDA, and free cash flow reflect the predictability of our business model and the levers we have for cost efficiencies, even as we continue the investments in our satellites and next generation platform," stated Tom Barry, Chief Financial Officer. "We continue to expect our subscriber results to improve from 2023, and we should see similar seasonality in 2024, with better year-over-year subscriber performance beginning in the back half of the year. Following the completion of the Liberty transaction, we plan to maintain our target leverage ratio of mid-to-low three times adjusted EBITDA and expect to be back in this range in the second half of 2025."
SEGMENT HIGHLIGHTS
Sirius XM Holdings operates two complementary audio entertainment businesses - one of which is referred to as "SiriusXM" and the second of which is referred to as "Pandora and Off-Platform." Further information regarding these two segments will be contained in the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. The financial highlights below exclude the impact of share-based payment expense.
SiriusXM First Quarter 2024 Segment Highlights
SiriusXM Total Subscribers of 33 Million
SiriusXM self-pay subscribers decreased by 359,000 in the first quarter of 2024, resulting from a decline in trial starts in late 2023 and seasonally higher first quarter churn. Self-pay monthly churn of 1.7% for the first quarter of
2024 rose from 1.6% in the first quarter of 2023, with the bulk of the increase attributable to vehicle-related churn driven by higher new and used car sales this year. Paid promotional subscribers during the quarter decreased by 86,000, primarily due to a shift to unpaid trials at certain automakers. The SiriusXM vehicle trial funnel ended the first quarter of 2024 at 7.5 million, compared to 7.2 million at year-end 2023 and the first quarter of 2023.
SiriusXM Revenue of $1.7 Billion
SiriusXM's total revenue was $1.7 billion in the first quarter, a 1% decline compared to the prior year period. The decline was driven by a lower average base of self-pay subscribers, which drove a 1% decline in subscriber revenue for the quarter. Average revenue per user (ARPU) during the first quarter of 2024 increased $0.07 to $15.36 compared to the $15.29 recorded in the corresponding 2023 period.
SiriusXM Gross Profit of $993 Million and Gross Margin of 60%
Total cost of services at SiriusXM increased by 2% to $674 million for the first quarter of 2024 compared to the corresponding quarter in 2023. Gross profit at SiriusXM totaled $993 million, a decrease of 2% compared to the 2023 period, producing a relatively flat gross margin of 60%, one percentage point lower than the prior year period.
Expanded Content Offering
SiriusXM continued to deepen and evolve its content lineup in the first quarter of 2024, highlighted by the successful launch of the SiriusXM exclusive series "This Life of Mine" with James Corden, rapidly becoming one of the top three on-demand talk shows. Featuring interviews with celebrities like Kim Kardashian and Dr. Dre, the show has boosted the company's media presence and attracted new listeners. In parallel, SiriusXM continued to expand its podcasting investments during the quarter, significantly enhancing its advertising reach, while also carving out unique content experiences to drive interest and engagement to SiriusXM's flagship service. The recent introduction of Crime Junkie Radio, led by Ashley Flowers, founder of audiochuck, is one such example. With initiatives like these, SiriusXM reinforced its unique content offerings, driving subscriber interest and strengthening its audio entertainment offering.
Product Highlights
In the first quarter of 2024, SiriusXM expanded the adoption of its 360L platform, most notably by signing a new agreement with Hyundai and Genesis that integrates 360L into vehicles this year, and by rolling out 360L-enabledMercedes-Benz and Subaru vehicles, the latter of which enabled new SiriusXM features in nearly half a million vehicles already on the road via an over-the-air update. Additionally, SiriusXM's 360L platform for the Android Automotive Operating System began rolling out in the popular Nissan Rogue and on the new Ford and Lincoln Digital experience, which debuted in the new Lincoln Nautilus.
Pandora and Off-Platform First Quarter 2024 Segment Highlights
Pandora and Off-PlatformSelf-Pay Subscribers of 5.9 Million
Self-pay subscribers of the Pandora Plus and Pandora Premium services decreased by 64,000 during the first quarter of 2024 to end the period at 5.9 million.
Pandora and Off-Platform Revenue of $495 Million
Pandora and Off-platform revenue of $495 million during the first quarter of 2024 increased 7%, or $33 million, compared to $462 million in the prior year period. Advertising revenue in the Pandora and Off-Platform segment of $362 million increased 8% in the first quarter of 2024 compared to the $334 million recorded in the prior year period, driven by podcasting and programmatic revenue.
Pandora and Off-Platform Gross Profit of $143 Million
Total cost of services of $352 million in the first quarter of 2024 remained flat compared to $351 million recorded in the 2023 period. Subscriber revenue of $133 million in the 2024 quarter increased 4% year-over-year while advertising revenue increased 8% to $362 million. This resulted in a gross profit in the Pandora and Off-Platform segment of $143 million for the first quarter of 2024, an increase of 29% compared to the prior year period, and produced a gross margin of 29%, 5 percentage points higher than the prior year period.
Product Highlights
This quarter SiriusXM released new ad technology with the introduction of Synthetic Voices from AdsWizz's AI Ad Tools. This new tool enables small and medium sized businesses to dynamically adjust their audio messaging using a variety of AI-generated voices, enhancing both the efficiency and the customization of audio ads.
ADDITIONAL FINANCIAL HIGHLIGHTS
During the first quarter of 2024, the company generated $132 million in free cash flow, an 8% decline when compared to the $144 million recorded in the prior year period. The decrease was attributable to an increase in content and other vendor payments, partially offset by lower satellite capital expenditures for the quarter. In addition, in the first quarter of 2024, the company invested approximately $187 million in carbon capture tax equity investments and plans to invest an additional approximately $50 million in the remainder of 2024. These equity investments are expected to reduce the company's cash taxes by approximately $130 million in 2024. The company anticipates the majority of the $250 million in net after-tax cash benefits to be realized in the latter part of the seven year investment period.
Subscriber acquisition costs remained flat at $90 million for the first quarter of 2024. Sales and marketing costs increased by 1% to $217 million for the first quarter of 2024 compared to $214 million in the 2023 period. Engineering, design and development costs increased 9% to $74 million in the quarter in support of SiriusXM's digital product enhancements, and general and administrative expenses decreased by 20% to $105 million in the 2024 quarter, driven by continued cost optimization and efficiency efforts as well as lower legal costs resulting from litigation insurance recoveries and reduced legal reserves.
In the first quarter of 2024, the company saved approximately $45 million through cost optimization efforts and consolidation across its businesses.
2024 FULL-YEAR FINANCIAL GUIDANCE
The company reiterated its full-year 2024 guidance for revenue, adjusted EBITDA, and free cash flow:
- Total revenue of approximately $8.75 billion,
- Adjusted EBITDA of approximately $2.70 billion, and
- Free cash flow of approximately $1.20 billion.
The company's guidance for adjusted EBITDA and free cash flow for 2024 does not include any effects of the proposed transaction with Liberty Media, anticipated to close during the third quarter of 2024. The company expects to revise its 2024 free cash flow guidance following the closing of the Liberty Media transaction. The company anticipates that free cash flow will be reduced by expenses associated with the proposed transaction with Liberty Media and incremental interest expense associated with debt being assumed and incurred in connection with the proposed transaction.
FIRST QUARTER 2024 RESULTS
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
For the Three Months Ended March 31, | |||||
(in millions, except per share data) | 2024 | 2023 | |||
Revenue: | (Unaudited) | (Unaudited) | |||
Subscriber revenue | $ | 1,680 | $ | 1,691 | |
Advertising revenue | 402 | 375 | |||
Equipment revenue | 50 | 46 | |||
Other revenue | 30 | 32 | |||
Total revenue | 2,162 | 2,144 | |||
Operating expenses: | |||||
Cost of services: | |||||
Revenue share and royalties | 703 | 700 | |||
Programming and content | 157 | 150 | |||
Customer service and billing | 116 | 122 | |||
Transmission | 59 | 49 | |||
Cost of equipment | 2 | 3 | |||
Subscriber acquisition costs | 90 | 90 | |||
Sales and marketing | 229 | 224 | |||
Engineering, design and development | 86 | 79 | |||
General and administrative | 115 | 147 | |||
Depreciation and amortization | 140 | 136 | |||
Impairment, restructuring and acquisition costs | 28 | 32 | |||
Total operating expenses | 1,725 | 1,732 | |||
Income from operations | 437 | 412 | |||
Other (expense) income: | |||||
Interest expense | (104) | (107) | |||
Other income | 12 | 3 | |||
Total other expense | (92) | (104) | |||
Income before income taxes | 345 | 308 | |||
Income tax expense | (80) | (75) | |||
Net income | $ | 265 | $ | 233 | |
Foreign currency translation adjustment, net of tax | |||||
(7) | - | ||||
Total comprehensive income | $ | 258 | $ | 233 | |
Net income per common share: | |||||
Basic | $ | 0.07 | $ | 0.06 | |
Diluted | |||||
$ | 0.07 | $ | 0.06 | ||
Weighted average common shares outstanding: | |||||
Basic | 3,845 | 3,889 | |||
Diluted | |||||
3,865 | 3,939 | ||||
Dividends declared per common share | |||||
$ | 0.0266 | $ | 0.0242 | ||
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data) | March 31, 2024 | December 31, 2023 | |||
ASSETS | (unaudited) | ||||
Current assets: | |||||
Cash and cash equivalents | $ | 71 | $ | 216 | |
Receivables, net | 614 | 709 | |||
Related party current assets | 33 | 36 | |||
Prepaid expenses and other current assets | 360 | 310 | |||
Total current assets | 1,078 | 1,271 | |||
Property and equipment, net | 1,820 | 1,754 | |||
Intangible assets, net | 2,882 | 2,905 | |||
Goodwill | 3,249 | 3,249 | |||
Equity method investments | 1,465 | 526 | |||
Deferred tax assets | 155 | 155 | |||
Operating lease right-of-use assets | 290 | 279 | |||
Other long-term assets | 235 | 235 | |||
Total assets | $ | 11,174 | $ | 10,374 | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||
Current liabilities: | |||||
Accounts payable and accrued expenses | $ | 1,170 | $ | 1,306 | |
Accrued interest | 72 | 166 | |||
Current portion of deferred revenue | 1,162 | 1,195 | |||
Current maturities of debt | 505 | 505 | |||
Operating lease current liabilities | 46 | 46 | |||
Related party current liabilities | 133 | 8 | |||
Total current liabilities | 3,088 | 3,226 | |||
Long-term deferred revenue | 84 | 88 | |||
Long-term debt | 8,722 | 8,690 | |||
Deferred tax liabilities | 488 | 509 | |||
Operating lease liabilities | 304 | 292 | |||
Other long-term liabilities | 858 | 134 | |||
Total liabilities | 13,544 | 12,939 | |||
Stockholders' equity (deficit): | |||||
Common stock, par value $0.001 per share; 9,000 shares authorized; 3,847 and 3,843 | 4 | 4 | |||
shares issued and outstanding at March 31, 2024 and December 31, 2023, | |||||
respectively | |||||
Accumulated other comprehensive (loss) income, net of tax | (4) | 3 | |||
Accumulated deficit | (2,370) | (2,572) | |||
Total stockholders' equity (deficit) | (2,370) | (2,565) | |||
Total liabilities and stockholders' equity (deficit) | $ | 11,174 | $ | 10,374 | |
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For The Three Months Ended March 31, | |||||
(in millions) | 2024 | 2023 | |||
Cash flows from operating activities: | |||||
Net income | $ | 265 | $ | 233 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 140 | 136 | |||
Non-cash impairment and restructuring costs | 1 | 8 | |||
Non-cash interest expense, net of amortization of premium | 4 | 3 | |||
Provision for doubtful accounts | 13 | 14 | |||
Loss on unconsolidated entity investments, net | 15 | - | |||
Gain on other investments | (3) | (2) | |||
Share-based payment expense | 45 | 45 | |||
Deferred income tax benefit | (14) | (52) | |||
Amortization of right-of-use assets | 11 | 10 | |||
Changes in operating assets and liabilities: | |||||
Receivables | 82 | 53 | |||
Related party, net | 44 | 88 | |||
Prepaid expenses and other current assets | (50) | (38) | |||
Other long-term assets | 7 | 6 | |||
Accounts payable and accrued expenses | (137) | (57) | |||
Accrued interest | (93) | (93) | |||
Deferred revenue | (36) | (17) | |||
Operating lease liabilities | (11) | (10) | |||
Other long-term liabilities | 25 | 23 | |||
Net cash provided by operating activities | 308 | 350 | |||
Cash flows from investing activities: | |||||
Additions to property and equipment | (174) | (205) | |||
Purchase of other investments | (2) | (1) | |||
Investments in related parties and other equity investees | (187) | (29) | |||
Net cash used in investing activities | (363) | (235) | |||
Cash flows from financing activities: | |||||
Taxes paid from net share settlements for stock-based compensation | (14) | (14) | |||
Revolving credit facility borrowings | 230 | 548 | |||
Revolving credit facility repayments | (200) | (418) | |||
Principal payments of long-term borrowings | (3) | (77) | |||
Other financing activities | (1) | (2) | |||
Common stock repurchased and retired | - | (62) | |||
Dividends paid | (102) | (94) | |||
Net cash used in financing activities | (90) | (119) | |||
Net decrease in cash, cash equivalents and restricted cash | (145) | (4) | |||
Cash, cash equivalents and restricted cash at beginning of period (1) | 224 | 65 | |||
Cash, cash equivalents and restricted cash at end of period (1) | $ | 79 | $ | 61 | |
- The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet. The restricted cash balances are primarily due to letters of credit which have been issued to the landlords of leased office space. The terms of the letters of credit primarily extend beyond one year.
(in millions) | March 31, 2024 | December 31, 2023 | March 31, 2023 | December 31, 2022 | |||||||
Cash and cash equivalents | $ | 71 | $ | 216 | $ | 53 | $ | 57 | |||
Restricted cash included in Other long-term assets | 8 | 8 | 8 | 8 | |||||||
Total cash, cash equivalents and restricted cash at end of period | $ | 79 | $ | 224 | $ | 61 | $ | 65 | |||
Unaudited Results
Set forth below are our results of operations for the three months ended March 31, 2024 compared with the three months ended March 31, 2023. Legal settlements and reserves and share-based payment expense have been excluded from cost of services line items and presented as their own line items in the table below, as this is consistent with how the segments are evaluated on a regular basis.
For the Three Months Ended March 31, | 2024 vs 2023 Change | |||||||||
(in millions) | 2024 | 2023 | Amount | % | ||||||
Revenue | ||||||||||
Sirius XM: | ||||||||||
Subscriber revenue | $ | 1,547 | $ | 1,563 | $ | (16) | (1)% | |||
Advertising revenue | 40 | 41 | (1) | (2)% | ||||||
Equipment revenue | 50 | 46 | 4 | 9 % | ||||||
Other revenue | 30 | 32 | (2) | (6)% | ||||||
Total Sirius XM revenue | 1,667 | 1,682 | (15) | (1)% | ||||||
Pandora and Off-platform: | ||||||||||
Subscriber revenue | 133 | 128 | 5 | 4 % | ||||||
Advertising revenue | 362 | 334 | 28 | 8 % | ||||||
Total Pandora and Off-platform revenue | 495 | 462 | 33 | 7 % | ||||||
Total consolidated revenue | 2,162 | 2,144 | 18 | 1 % | ||||||
Cost of services | ||||||||||
Sirius XM: | ||||||||||
Revenue share and royalties | 395 | 390 | 5 | 1 % | ||||||
Programming and content | 132 | 129 | 3 | 2 % | ||||||
Customer service and billing | 96 | 102 | (6) | (6)% | ||||||
Transmission | 49 | 40 | 9 | 23 % | ||||||
Cost of equipment | 2 | 3 | (1) | (33)% | ||||||
Total Sirius XM cost of services | 674 | 664 | 10 | 2 % | ||||||
Pandora and Off-platform: | ||||||||||
Revenue share and royalties | 308 | 310 | (2) | (1)% | ||||||
Programming and content | 16 | 14 | 2 | 14 % | ||||||
Customer service and billing | 19 | 19 | - | - % | ||||||
Transmission | 9 | 8 | 1 | 13 % | ||||||
Total Pandora and Off-platform cost of services | 352 | 351 | 1 | - % | ||||||
Total consolidated cost of services | 1,026 | 1,015 | 11 | 1 % | ||||||
Subscriber acquisition costs | 90 | 90 | - | - % | ||||||
Sales and marketing | 217 | 214 | 3 | 1 % | ||||||
Engineering, design and development | 74 | 68 | 6 | 9 % | ||||||
General and administrative | 105 | 132 | (27) | (20)% | ||||||
Depreciation and amortization | 140 | 136 | 4 | 3 % | ||||||
Impairment, restructuring and acquisition costs | 28 | 32 | (4) | (13)% | ||||||
Share-based payment expense (1) | 45 | 45 | - | - % | ||||||
Total operating expenses | 1,725 | 1,732 | (7) | - % | ||||||
Income from operations | 437 | 412 | 25 | 6 % | ||||||
Other (expense) income: | ||||||||||
Interest expense | (104) | (107) | (3) | (3)% | ||||||
Other income | 12 | 3 | 9 | 300 % | ||||||
Total other expense | (92) | (104) | (12) | (12)% | ||||||
Income before income taxes | 345 | 308 | 37 | 12 % | ||||||
Income tax expense | (80) | (75) | 5 | 7 % | ||||||
Net income | $ | 265 | $ | 233 | $ | 32 | 14 % | |||
Adjusted EBITDA | $ | 650 | $ | 625 | $ | 25 | 4 % | |||
Gross Profit - Sirius XM | $ | 993 | $ | 1,018 | $ | (25) | (2)% | |||
Gross Margin % - Sirius XM | 60 % | 61 % | (1)% | (2)% | ||||||
Gross Profit - Pandora and Off-platform | $ | 143 | $ | 111 | $ | 32 | 29 % | |||
Gross Margin % - Pandora and Off-platform | 29 % | 24 % | 5 % | 21 % |
nm - not meaningful
(1) | Allocation of share-based payment expense: | |||||
For the Three Months Ended March 31, | ||||||
(in millions) | 2024 | 2023 | ||||
Programming and content - Sirius XM | $ | 8 | $ | 6 | ||
Customer service and billing - Sirius XM | 1 | 1 | ||||
Transmission - Sirius XM | 1 | 1 | ||||
Programming and content - Pandora and Off-platform | 1 | 1 | ||||
Sales and marketing | 12 | 10 | ||||
Engineering, design and development | 12 | 11 | ||||
General and administrative | 10 | 15 | ||||
Total share-based payment expense | $ | 45 | $ | 45 |
Key Financial and Operating Metrics
A full glossary defining our key financial and operating metrics can be found in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.
Subscribers and subscription related revenues and expenses associated with our connected vehicle services and Sirius XM Canada are not included in Sirius XM's subscriber count or subscriber-based operating metrics. Subscribers to Cloud Cover are not included in Pandora's subscriber count.
Set forth below are our subscriber balances as of March 31, 2024 compared to March 31, 2023:
As of March 31, | 2024 vs 2023 Change | |||||||
(subscribers in thousands) | 2024 | 2023 | Amount | % | ||||
Sirius XM | ||||||||
Self-pay subscribers | 31,583 | 32,040 | (457) | (1)% | ||||
Paid promotional subscribers | 1,847 | 1,984 | (137) | (7)% | ||||
Ending subscribers | 33,430 | 34,024 | (594) | (2)% | ||||
Sirius XM Canada subscribers | 2,600 | 2,587 | 13 | 1 % | ||||
Pandora and Off-platform | ||||||||
Monthly active users - all services | 45,023 | 46,663 | (1,640) | (4)% | ||||
Self-pay subscribers | 5,944 | 6,222 | (278) | (4)% |
The following table contains our Non-GAAP financial and operating performance measures which are based on our adjusted results of operations for the three months ended March 31, 2024 and 2023:
(subscribers in thousands)
Sirius XM
Self-pay subscribers
Paid promotional subscribers Net additions
Weighted average number of subscribers Average self-pay monthly churn ARPU (1)
SAC, per installation
Pandora and Off-platform
Self-pay subscribers Net additions
Weighted average number of subscribers Ad supported listener hours (in billions)
Advertising revenue per thousand listener hours (RPM)
Total Company
Adjusted EBITDA
Free cash flow
nm - not meaningful
For the Three Months Ended March 31, | 2024 vs 2023 Change | ||||||||
2024 | 2023 | Amount | % | ||||||
(359) | (347) | (12) | (3)% | ||||||
(86) | 66 | (152) | (230)% | ||||||
(445) | (281) | (164) | (58)% | ||||||
33,549 | 34,114 | (565) | (2)% | ||||||
1.7 % | 1.6 % | 0.1 % | 6 % | ||||||
$ | 15.36 | $ | 15.29 | $ | 0.07 | - % | |||
$ | 12.50 | $ | 14.39 | $ | (1.89) | (13)% | |||
(64) | 7 | (71) | (1,014)% | ||||||
(64) | 7 | (71) | (1,014)% | ||||||
5,959 | 6,203 | (244) | (4)% | ||||||
2.49 | 2.59 | (0.10) | (4)% | ||||||
$ | 90.88 | $ | 85.09 | $ | 5.79 | 7 % | |||
$ | 650 | $ | 625 | $ | 25 | 4 % | |||
$ | 132 | $ | 144 | $ | (12) | (8)% |
- ARPU for Sirius XM excludes subscriber revenue from our connected vehicle services of $41 and $39 for the three months ended March 31, 2024 and 2023, respectively
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Sirius XM Holdings Inc. published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 10:58:48 UTC.
