- Revenue in Second Quarter 2022 of $2.25 Billion; an Increase of 4%
Year-Over-Year
- Second Quarter 2022 Net Income of $292 Million; Diluted EPS of $0.07
- Adjusted EBITDA of $679
Million
- Year-to-Date Capital Returns to Stockholders of
$1.6 Billion
- SiriusXM Reiterates Full-Year Financial Guidance; Expects
Positive Full-Year Self Pay Net Subscriber Additions
NEW
YORK, July 28, 2022 /PRNewswire/ -- SiriusXM
today announced second quarter 2022 operating and financial
results, including revenue of $2.25
billion, an increase of 4% year over year. The company
recorded net income of $292
million in the second quarter 2022 compared to $433 million in the prior year period. The prior
year period benefited from $140
million of satellite insurance recoveries. Net income per
diluted common share was $0.07 in the
second quarter 2022 compared to $0.10
in the prior year period, or $0.08
excluding the satellite insurance recoveries recorded in the second
quarter of 2021.
Adjusted EBITDA was $679 million
in the second quarter of 2022, down 3% from the second quarter of
2021.
"We are pleased with our results in the second quarter, and
while we continue to navigate an uncertain economic environment, we
delivered strong financial performance and continued to make
strategic investments in our business that will set us up for an
exciting new era at SiriusXM," said Jennifer Witz, Chief Executive Officer of
SiriusXM. "We remain committed to creating compelling experiences
for our listeners by investing in innovative technologies to
deliver best-in-class, curated, comprehensive audio entertainment.
We remain equally committed to delivering consumers the best and
widest choice in premium audio content. From launching pop-up
channels celebrating Black Music Appreciation Month to acquiring
Conan O'Brien's Team Coco to produce
new content for our listeners, and most recently, expanding our
relationship with the NFL to deliver the most extensive sports
lineup in audio entertainment, we will continue to enhance our
platform to ensure broad appeal."
"SiriusXM's churn was steady at approximately 1.5% in the
quarter, underscoring the strength of our business, our products,
and loyalty of our customers. In the second quarter, we delivered
focused expansion in key streaming offerings and maintained a
strong balance sheet," said Sean
Sullivan, Executive Vice President, and Chief Financial
Officer. "This quarter we returned over $300
million in capital to stockholders, comprising $217 million in common stock repurchases and
$86 million in dividends, and ended
the quarter with net debt to adjusted EBITDA of 3.6 times."
SEGMENT HIGHLIGHTS
Sirius XM Holdings operates two complementary audio
entertainment businesses — one of which we refer to as "SiriusXM"
and the second of which we refer 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 June 30, 2022. The financial and operating highlights
below exclude the impact of share-based payment expense.
SiriusXM Financial Metrics and Key
Highlights
Self-Pay Subscribers Remain at
32.0 Million
During the second quarter of 2022,
SiriusXM self-pay subscribers increased by 23,000 and paid
promotional subscribers increased by 54,000. Total subscribers were
34.0 million on June 30, 2022. The SiriusXM trial funnel stood
at approximately 7.3 million at the end of the quarter, up from 6.9
million at the end of the first quarter of 2022. Self-pay monthly
churn remained at approximately 1.5%.
SiriusXM Revenue Increased 5% to $1.7
Billion
Second quarter 2022 revenue grew 5% to
$1.7 billion compared to the second
quarter of 2021. This growth was driven by a $1.05 increase in average revenue per user
(ARPU), up 7% year over year, resulting in a total ARPU of
$15.62. Second quarter 2022 revenue
also benefited from a 2% increase in SiriusXM self-pay subscribers,
partially offset by the effects of a lower base of paid promotional
subscribers.
Gross Profit Increased 6% to $1.1
Billion and Gross Margin Remained Stable
Total cost
of services at SiriusXM increased by 3% to $668 million for the quarter compared to the
corresponding quarter in 2021. Gross profit at SiriusXM totaled
$1.1 billion, an increase of 6%
compared to the 2021 period, producing a gross margin of 61%,
consistent with the prior year period.
Expanded Content Offering
During the quarter, SiriusXM
continued its efforts creating special programming recognizing
Black artists with the launch of two exclusive channels during
Black Music Appreciation Month in June, Whitney Houston and The Notorious B.I.G., and
welcomed back The 2PAC Channel and The Prince Channel. The quarter
also saw a continued focus on opportunities that leverage
SiriusXM's full audio ecosystem, including the acquisition of Team
Coco, which included the critically-acclaimed hit podcast
Conan O'Brien Needs a Friend, and
the Conan O'Brien-led podcast
network and digital media business. As part of the deal, Conan will
collaborate with SiriusXM to create and executive produce a new
fulltime, original Team Coco comedy channel for SiriusXM
subscribers expected to launch this fall. SiriusXM also reached a
new agreement with the NFL, making the platform the exclusive
third-party audio provider of every NFL game, along with expanded
rights to bring subscribers team-focused content from NFL
clubs.
Product Enhancements
In the second quarter, SiriusXM
made improvements to the commerce experience on its existing SXM
Apps on connected devices, including Amazon Fire, Android TV, LG,
and Roku, and launched the SXM App on Comcast X1, Flex, and XClass
TV platforms.
BMW vehicles equipped with SiriusXM 360L received a key feature
update. BMW vehicles with 360L now include Pandora Stations, an
in-car feature from SiriusXM that employs Pandora's listener
personalization technology and gives BMW owners the ability to
customize their own ad-free music channels in the car with more of
what they want to hear.
Pandora and Off-Platform Financial
Metrics and Key Highlights
Advertising Revenue Increased 5% to $403 Million
Second quarter 2022 ad
revenue in the Pandora and Off-Platform segment increased by 5%
year over year to $403 million.
Off-platform advertising, including the company's podcast business,
climbed 50% year over year to nearly $119
million in the second quarter of 2022. Ad revenue maintained
monetization of approximately $100
per thousand hours at Pandora, remaining roughly flat compared to
the second quarter of 2021.
Total Advertising-Supported Listener Hours of 2.84
Billion
Monthly Active Users (MAUs) at Pandora were 50.5
million in the second quarter of 2022, down from 55.1 million in
the prior year period. Total ad-supported listener hours were 2.84
billion in the second quarter of 2022, down from 3.03 billion in
the 2021 period. Average monthly hours per ad-supported user
climbed 3% to 21.1 in the second quarter of 2022 compared to 20.4
in the second quarter of 2021.
Self-Pay Subscribers Decreased Modestly
Self-pay
subscribers to the Pandora Plus and Pandora Premium services
decreased modestly in the second quarter of 2022 to end the period
at 6.3 million.
Gross Profit Falls
Subscriber revenue decreased by 2%,
advertising revenue increased by 5% and total cost of services
increased by 14% during the second quarter of 2022 driven by
investments in new podcast content. This resulted in gross profit
in the Pandora and Off-platform segment of $167 million, a decrease of 13% compared to the
corresponding 2021 period, and produced a gross margin for the
quarter of 31%, down 6 percentage points from the prior year
period.
Content Engagement
Pandora saw increases in time spent
listening by active users, driven by a continued focus on improving
personalization and expanding its rich content offering. The
quarter saw launches of several new Pandora stations, including
Country Grit, one of Pandora's most-listened genres (country
music); Pan-Asian United, a new channel showcasing a range of
genres from Asian-American and Pacific Islander artists; and Prom
Night, the platform's largest suite of stations to date, all in
celebration of the 2022 prom season. Additionally, in honor of
Black Music Appreciation Month in June, Pandora's Black Music
Forever Radio launched five new modes representing five decades of
the evolution of dance influenced by black culture.
Podcast Growth and Expanded Ad Representation
SXM
Media, the company's combined advertising sales organization,
continues to be a dominant force in podcast ad sales, ranking as
the #1 podcast advertising network in weekly U.S. listener reach,
according to Edison Research. SXM Media currently represents four
of the top 15 podcasts in the country, including "Crime Junkies,"
"Office Ladies," "Dateline NBC," and "Pod Save America."
As part of the previously mentioned acquisition of Team Coco,
SiriusXM expanded its exclusive global ad representation beyond
Team Coco's acclaimed podcasts to also include digital video,
social media, and live events associated with Team Coco's
properties. During the quarter, the company also signed new
agreements with multi-platform internet star Lyle Forever, which
includes his hit podcast Therapy Gecko and Critical Role, the
D&D role-playing collective with millions of fans. These
agreements secured the global advertising sales rights for SXM
Media and continued to expand the company's off-platform business,
and solidified SXM Media as a leader in the sales of audio
advertising for podcasts.
ADDITIONAL FINANCIAL
HIGHLIGHTS
Subscriber acquisition costs increased by 2% to $91 million in the second quarter of 2022
compared to the prior year period, driven by higher equipment
installations by automakers. Sales and marketing costs increased by
20% to $272 million in 2022 compared
to the prior year, boosted by increased performance marketing
efforts and the continuation of a multi-media national ad campaign
promoting SiriusXM, which launched late 2021. Engineering, design
and development costs rose 7% to $63
million, and general and administrative expenses decreased
by 1% to $113 million in 2022.
Free cash flow was $435 million,
down approximately 21% from the prior year period, as cash taxes
rose by $97 million year over year
and the second quarter of 2021 benefited from $17 million in satellite insurance receipts.
2022 GUIDANCE
The Company continues to anticipate positive full-year 2022
self-pay net subscriber additions and reiterates 2022 guidance for
revenue, adjusted EBITDA, and free cash flow as follows:
- Total revenue of approximately $9.0
billion,
- Adjusted EBITDA of approximately $2.8
billion, and
- Free cash flow of approximately $1.55
billion.
SECOND QUARTER 2022
RESULTS
|
|
SIRIUS XM HOLDINGS INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
(UNAUDITED)
|
|
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
(in millions, except
per share data)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue:
|
|
|
|
|
|
|
|
Subscriber
revenue
|
$
1,719
|
|
$
1,641
|
|
$
3,432
|
|
$
3,252
|
Advertising
revenue
|
452
|
|
429
|
|
835
|
|
783
|
Equipment
revenue
|
45
|
|
51
|
|
98
|
|
108
|
Other
revenue
|
37
|
|
38
|
|
75
|
|
74
|
Total
revenue
|
2,253
|
|
2,159
|
|
4,440
|
|
4,217
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
services:
|
|
|
|
|
|
|
|
Revenue share and
royalties
|
711
|
|
662
|
|
1,381
|
|
1,303
|
Programming and
content
|
153
|
|
136
|
|
292
|
|
265
|
Customer service and
billing
|
125
|
|
128
|
|
251
|
|
244
|
Transmission
|
54
|
|
52
|
|
106
|
|
101
|
Cost of
equipment
|
3
|
|
4
|
|
6
|
|
9
|
Subscriber acquisition
costs
|
91
|
|
89
|
|
181
|
|
175
|
Sales and
marketing
|
285
|
|
240
|
|
557
|
|
456
|
Engineering, design and
development
|
72
|
|
65
|
|
139
|
|
130
|
General and
administrative
|
127
|
|
130
|
|
250
|
|
251
|
Depreciation and
amortization
|
135
|
|
131
|
|
270
|
|
263
|
Impairment,
restructuring and acquisition costs
|
1
|
|
(136)
|
|
1
|
|
108
|
Total operating
expenses
|
1,757
|
|
1,501
|
|
3,434
|
|
3,305
|
Income from
operations
|
496
|
|
658
|
|
1,006
|
|
912
|
Other (expense)
income:
|
|
|
|
|
|
|
|
Interest
expense
|
(104)
|
|
(103)
|
|
(206)
|
|
(203)
|
Other (expense)
income
|
(4)
|
|
5
|
|
(2)
|
|
8
|
Total other (expense)
income
|
(108)
|
|
(98)
|
|
(208)
|
|
(195)
|
Income before income
taxes
|
388
|
|
560
|
|
798
|
|
717
|
Income tax
expense
|
(96)
|
|
(127)
|
|
(197)
|
|
(65)
|
Net income
|
$
292
|
|
$
433
|
|
$
601
|
|
$
652
|
Foreign currency
translation adjustment, net of tax
|
(10)
|
|
7
|
|
(2)
|
|
12
|
Total comprehensive
income
|
$
282
|
|
$
440
|
|
$
599
|
|
$
664
|
Net income per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.07
|
|
$
0.11
|
|
$
0.15
|
|
$
0.16
|
Diluted
|
$
0.07
|
|
$
0.10
|
|
$
0.15
|
|
$
0.16
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
3,928
|
|
4,079
|
|
3,938
|
|
4,108
|
Diluted
|
4,005
|
|
4,163
|
|
4,016
|
|
4,193
|
Dividends declared per
common share
|
$
0.0219615
|
|
$
0.014641
|
|
$
0.293923
|
|
$
0.029282
|
SIRIUS XM HOLDINGS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
|
|
(in millions, except
per share data)
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
126
|
|
$
191
|
Receivables,
net
|
660
|
|
722
|
Related party current
assets
|
19
|
|
21
|
Prepaid expenses and
other current assets
|
328
|
|
246
|
Total current
assets
|
1,133
|
|
1,180
|
Property and equipment,
net
|
1,467
|
|
1,450
|
Intangible assets,
net
|
3,128
|
|
3,186
|
Goodwill
|
3,249
|
|
3,151
|
Related party long-term
assets
|
527
|
|
526
|
Deferred tax
assets
|
200
|
|
200
|
Operating lease
right-of-use assets
|
336
|
|
358
|
Other long-term
assets
|
230
|
|
223
|
Total
assets
|
$
10,270
|
|
$
10,274
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
1,219
|
|
$
1,299
|
Accrued
interest
|
164
|
|
173
|
Current portion of
deferred revenue
|
1,432
|
|
1,454
|
Operating lease
current liabilities
|
49
|
|
49
|
Related party current
liabilities
|
20
|
|
5
|
Total current
liabilities
|
2,884
|
|
2,980
|
Long-term deferred
revenue
|
87
|
|
97
|
Long-term
debt
|
9,866
|
|
8,832
|
Deferred tax
liabilities
|
539
|
|
478
|
Operating lease
liabilities
|
333
|
|
362
|
Other long-term
liabilities
|
140
|
|
150
|
Total
liabilities
|
13,849
|
|
12,899
|
Stockholders' equity
(deficit):
|
|
|
|
Common stock, par
value $0.001 per share; 9,000 shares authorized; 3,909 and 3,968
shares issued; 3,908 and 3,967 shares outstanding at June 30,
2022 and December 31, 2021, respectively
|
4
|
|
4
|
Accumulated other
comprehensive income, net of tax
|
13
|
|
15
|
Additional paid-in
capital
|
—
|
|
—
|
Treasury stock, at
cost; 1 shares of common stock at June 30, 2022 and
December 31, 2021
|
(10)
|
|
(8)
|
Accumulated
deficit
|
(3,586)
|
|
(2,636)
|
Total stockholders'
equity (deficit)
|
(3,579)
|
|
(2,625)
|
Total liabilities and
stockholders' equity (deficit)
|
$
10,270
|
|
$
10,274
|
SIRIUS XM HOLDINGS INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF CASH FLOWS
(UNAUDITED)
|
|
|
For The Six Months
Ended June 30,
|
(in
millions)
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
601
|
|
$
652
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
270
|
|
263
|
Non cash impairment
and restructuring costs
|
—
|
|
245
|
Non-cash interest
expense, net of amortization of premium
|
9
|
|
10
|
Provision for doubtful
accounts
|
29
|
|
24
|
(Gain) loss on
unconsolidated entity investments, net
|
(3)
|
|
3
|
Dividend received from
unconsolidated entity investment
|
—
|
|
1
|
Loss (gain) on other
investments
|
9
|
|
(4)
|
Share-based payment
expense
|
92
|
|
98
|
Deferred income tax
expense
|
60
|
|
37
|
Amortization of
right-of-use assets
|
21
|
|
28
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
35
|
|
(11)
|
Related party,
net
|
1
|
|
11
|
Prepaid expenses and
other current assets
|
(83)
|
|
(136)
|
Other long-term
assets
|
6
|
|
(4)
|
Accounts payable and
accrued expenses
|
(81)
|
|
(99)
|
Accrued
interest
|
(9)
|
|
(1)
|
Deferred
revenue
|
(32)
|
|
(145)
|
Operating lease
liabilities
|
(30)
|
|
(26)
|
Other long-term
liabilities
|
(7)
|
|
(18)
|
Net cash provided by
operating activities
|
888
|
|
928
|
Cash flows from
investing activities:
|
|
|
|
Additions to property
and equipment
|
(196)
|
|
(164)
|
Sale (purchases) of
other investments
|
1
|
|
(3)
|
Acquisition of
business, net of cash acquired
|
(137)
|
|
(14)
|
Investments in related
parties and other equity investees
|
(1)
|
|
(11)
|
Repayment from related
party
|
—
|
|
2
|
Net cash used in
investing activities
|
(333)
|
|
(190)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from exercise
of stock options
|
—
|
|
6
|
Taxes paid from net
share settlements for stock-based compensation
|
(39)
|
|
(43)
|
Revolving credit
facility, net
|
510
|
|
(649)
|
Proceeds from
long-term borrowings, net of costs
|
499
|
|
1,976
|
Principal payments of
long-term borrowings
|
(2)
|
|
(2)
|
Payment of contingent
consideration for business acquisition
|
(3)
|
|
—
|
Distribution to parent
related to Tax Sharing Agreement
|
(11)
|
|
—
|
Common stock
repurchased and retired
|
(415)
|
|
(856)
|
Dividends
paid
|
(1,159)
|
|
(121)
|
Net cash (used in)
provided by financing activities
|
(620)
|
|
311
|
Net (decrease) increase
in cash, cash equivalents and restricted cash
|
(65)
|
|
1,049
|
Cash, cash equivalents
and restricted cash at beginning of period
(1)
|
199
|
|
83
|
Cash, cash equivalents
and restricted cash at end of period (1)
|
$
134
|
|
$
1,132
|
(1)
|
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)
|
June 30,
2022
|
|
December 31,
2021
|
|
June 30,
2021
|
|
December 31,
2020
|
Cash and cash
equivalents
|
$
126
|
|
$
191
|
|
$
1,124
|
|
$
71
|
Restricted cash
included in Other long-term assets
|
8
|
|
8
|
|
8
|
|
12
|
Total cash, cash
equivalents and restricted cash at end of period
|
$
134
|
|
$
199
|
|
$
1,132
|
|
$
83
|
Unaudited Results
Set forth below are our results of operations for the three and
six months ended June 30, 2022 compared with the three and six
months ended June 30, 2021. 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 June 30,
|
|
For the Six Months
Ended June 30,
|
|
2022 vs 2021
Change
|
|
|
|
Three
Months
|
|
Six
Months
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sirius XM:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber
revenue
|
$ 1,588
|
|
$ 1,508
|
|
$ 3,170
|
|
$ 2,989
|
|
$
80
|
|
5 %
|
|
$ 181
|
|
6 %
|
Advertising
revenue
|
49
|
|
46
|
|
97
|
|
87
|
|
3
|
|
7 %
|
|
10
|
|
11 %
|
Equipment
revenue
|
45
|
|
51
|
|
98
|
|
108
|
|
(6)
|
|
(12) %
|
|
(10)
|
|
(9) %
|
Other
revenue
|
37
|
|
38
|
|
75
|
|
74
|
|
(1)
|
|
(3) %
|
|
1
|
|
1 %
|
Total Sirius XM
revenue
|
1,719
|
|
1,643
|
|
3,440
|
|
3,258
|
|
76
|
|
5 %
|
|
182
|
|
6 %
|
Pandora and
Off-platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber
revenue
|
131
|
|
133
|
|
262
|
|
263
|
|
(2)
|
|
(2) %
|
|
(1)
|
|
— %
|
Advertising
revenue
|
403
|
|
383
|
|
738
|
|
696
|
|
20
|
|
5 %
|
|
42
|
|
6 %
|
Total Pandora and
Off-platform revenue
|
534
|
|
516
|
|
1,000
|
|
959
|
|
18
|
|
3 %
|
|
41
|
|
4 %
|
Total consolidated
revenue
|
2,253
|
|
2,159
|
|
4,440
|
|
4,217
|
|
94
|
|
4 %
|
|
223
|
|
5 %
|
Cost of
services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sirius XM:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue share and
royalties
|
397
|
|
387
|
|
779
|
|
766
|
|
10
|
|
3 %
|
|
13
|
|
2 %
|
Programming and
content
|
131
|
|
117
|
|
253
|
|
228
|
|
14
|
|
12 %
|
|
25
|
|
11 %
|
Customer service and
billing
|
102
|
|
104
|
|
204
|
|
199
|
|
(2)
|
|
(2) %
|
|
5
|
|
3 %
|
Transmission
|
35
|
|
35
|
|
75
|
|
68
|
|
—
|
|
— %
|
|
7
|
|
10 %
|
Cost of
equipment
|
3
|
|
4
|
|
6
|
|
9
|
|
(1)
|
|
(25) %
|
|
(3)
|
|
(33) %
|
Total Sirius XM cost
of services
|
668
|
|
647
|
|
1,317
|
|
1,270
|
|
21
|
|
3 %
|
|
47
|
|
4 %
|
Pandora and
Off-platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue share and
royalties
|
314
|
|
275
|
|
602
|
|
537
|
|
39
|
|
14 %
|
|
65
|
|
12 %
|
Programming and
content
|
13
|
|
11
|
|
23
|
|
21
|
|
2
|
|
18 %
|
|
2
|
|
10 %
|
Customer service and
billing
|
22
|
|
22
|
|
44
|
|
42
|
|
—
|
|
— %
|
|
2
|
|
5 %
|
Transmission
|
18
|
|
15
|
|
28
|
|
30
|
|
3
|
|
20 %
|
|
(2)
|
|
(7) %
|
Total Pandora and
Off-platform cost of services
|
367
|
|
323
|
|
697
|
|
630
|
|
44
|
|
14 %
|
|
67
|
|
11 %
|
Total consolidated cost
of services
|
1,035
|
|
970
|
|
2,014
|
|
1,900
|
|
65
|
|
7 %
|
|
114
|
|
6 %
|
Subscriber acquisition
costs
|
91
|
|
89
|
|
181
|
|
175
|
|
2
|
|
2 %
|
|
6
|
|
3 %
|
Sales and
marketing
|
272
|
|
227
|
|
531
|
|
428
|
|
45
|
|
20 %
|
|
103
|
|
24 %
|
Engineering, design and
development
|
63
|
|
59
|
|
122
|
|
113
|
|
4
|
|
7 %
|
|
9
|
|
8 %
|
General and
administrative
|
113
|
|
114
|
|
223
|
|
220
|
|
(1)
|
|
(1) %
|
|
3
|
|
1 %
|
Depreciation and
amortization
|
135
|
|
131
|
|
270
|
|
263
|
|
4
|
|
3 %
|
|
7
|
|
3 %
|
Impairment,
restructuring and acquisition costs
|
1
|
|
(136)
|
|
1
|
|
108
|
|
137
|
|
nm
|
|
(107)
|
|
nm
|
Share-based payment
expense (1)
|
47
|
|
47
|
|
92
|
|
98
|
|
—
|
|
— %
|
|
(6)
|
|
(6) %
|
Total operating
expenses
|
1,757
|
|
1,501
|
|
3,434
|
|
3,305
|
|
256
|
|
17 %
|
|
129
|
|
4 %
|
Income (loss) from
operations
|
496
|
|
658
|
|
1,006
|
|
912
|
|
(162)
|
|
(25) %
|
|
94
|
|
10 %
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(104)
|
|
(103)
|
|
(206)
|
|
(203)
|
|
(1)
|
|
(1) %
|
|
(3)
|
|
(1) %
|
Other (expense)
income
|
(4)
|
|
5
|
|
(2)
|
|
8
|
|
(9)
|
|
nm
|
|
(10)
|
|
nm
|
Total other (expense)
income
|
(108)
|
|
(98)
|
|
(208)
|
|
(195)
|
|
(10)
|
|
(10) %
|
|
(13)
|
|
(7) %
|
Income (loss) before
income taxes
|
388
|
|
560
|
|
798
|
|
717
|
|
(172)
|
|
(31) %
|
|
81
|
|
11 %
|
Income tax
expense
|
(96)
|
|
(127)
|
|
(197)
|
|
(65)
|
|
31
|
|
(24) %
|
|
(132)
|
|
nm
|
Net income
(loss)
|
$
292
|
|
$
433
|
|
$
601
|
|
$
652
|
|
$ (141)
|
|
(33) %
|
|
$ (51)
|
|
(8) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
679
|
|
$
700
|
|
$ 1,369
|
|
$ 1,381
|
|
$ (21)
|
|
(3) %
|
|
$ (12)
|
|
(1) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit - Sirius
XM
|
$ 1,051
|
|
$
996
|
|
$ 2,123
|
|
$ 1,988
|
|
$
55
|
|
6 %
|
|
$ 135
|
|
7 %
|
Gross Margin % -
Sirius XM
|
61 %
|
|
61 %
|
|
62 %
|
|
61 %
|
|
— %
|
|
— %
|
|
1 %
|
|
2 %
|
Gross Profit - Pandora
and Off-platform
|
$
167
|
|
$
193
|
|
$
303
|
|
$
329
|
|
$ (26)
|
|
(13) %
|
|
$ (26)
|
|
(8) %
|
Gross Margin % -
Pandora and Off-platform
|
31 %
|
|
37 %
|
|
30 %
|
|
34 %
|
|
(6) %
|
|
(16) %
|
|
(4) %
|
|
(12) %
|
nm - not
meaningful
|
|
|
(1) Allocation of
share-based payment expense:
|
|
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Programming and
content - Sirius XM
|
$
8
|
|
$
8
|
|
$
15
|
|
$
15
|
Customer service and
billing - Sirius XM
|
1
|
|
1
|
|
3
|
|
3
|
Transmission - Sirius
XM
|
1
|
|
1
|
|
2
|
|
2
|
Programming and
content - Pandora and Off-platform
|
1
|
|
—
|
|
1
|
|
1
|
Customer service and
billing - Pandora
|
—
|
|
1
|
|
—
|
|
—
|
Transmission -
Pandora
|
—
|
|
1
|
|
1
|
|
1
|
Sales and
marketing
|
13
|
|
13
|
|
26
|
|
28
|
Engineering, design
and development
|
9
|
|
6
|
|
17
|
|
17
|
General and
administrative
|
14
|
|
16
|
|
27
|
|
31
|
Total share-based
payment expense
|
$
47
|
|
$
47
|
|
$
92
|
|
$
98
|
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 June 30, 2022.
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.
Set forth below are our subscriber balances as of June 30,
2022 compared to June 30, 2021:
|
As of June
30,
|
|
2022 vs 2021
Change
|
(subscribers in
thousands)
|
2022
|
|
2021
|
|
Amount
|
|
%
|
Sirius
XM
|
|
|
|
|
|
|
|
Self-pay
subscribers
|
32,037
|
|
31,368
|
|
669
|
|
2 %
|
Paid promotional
subscribers
|
1,994
|
|
3,108
|
|
(1,114)
|
|
(36) %
|
Ending
subscribers
|
34,031
|
|
34,476
|
|
(445)
|
|
(1) %
|
Sirius XM Canada
subscribers
|
2,574
|
|
2,578
|
|
(4)
|
|
— %
|
|
|
|
|
|
|
|
|
Pandora and
Off-platform
|
|
|
|
|
|
|
|
Monthly active users -
all services
|
50,478
|
|
55,137
|
|
(4,659)
|
|
(8) %
|
Self-pay
subscribers
|
6,319
|
|
6,510
|
|
(191)
|
|
(3) %
|
Paid promotional
subscribers
|
—
|
|
67
|
|
(67)
|
|
(100) %
|
Ending
subscribers
|
6,319
|
|
6,577
|
|
(258)
|
|
(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 and six months ended
June 30, 2022 and 2021:
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
|
2022 vs 2021
Change
|
|
|
|
Three
Months
|
|
Six
Months
|
(subscribers in
thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
Sirius
XM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Self-pay
subscribers
|
23
|
|
355
|
|
(1)
|
|
481
|
|
(332)
|
|
(94) %
|
|
(482)
|
|
(100) %
|
Paid promotional
subscribers
|
54
|
|
(378)
|
|
—
|
|
(719)
|
|
432
|
|
114 %
|
|
719
|
|
100 %
|
Net
additions
|
77
|
|
(23)
|
|
(1)
|
|
(238)
|
|
100
|
|
435 %
|
|
237
|
|
100 %
|
Weighted average number
of subscribers
|
33,953
|
|
34,473
|
|
33,927
|
|
34,468
|
|
(520)
|
|
(2) %
|
|
(541)
|
|
(2) %
|
Average self-pay
monthly churn
|
1.5 %
|
|
1.5 %
|
|
1.6 %
|
|
1.6 %
|
|
— %
|
|
— %
|
|
— %
|
|
— %
|
ARPU
(1)
|
$
15.62
|
|
$
14.57
|
|
$
15.58
|
|
$
14.43
|
|
$
1.05
|
|
7 %
|
|
$
1.15
|
|
8 %
|
SAC, per
installation
|
$
16.27
|
|
$
15.20
|
|
$
14.46
|
|
$
12.93
|
|
$
1.07
|
|
7 %
|
|
$
1.53
|
|
12 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pandora and
Off-platform
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Self-pay
subscribers
|
(9)
|
|
118
|
|
(5)
|
|
231
|
|
(127)
|
|
(108) %
|
|
(236)
|
|
(102) %
|
Paid promotional
subscribers
|
—
|
|
3
|
|
(69)
|
|
5
|
|
(3)
|
|
(100) %
|
|
(74)
|
|
(1,480) %
|
Net
additions
|
(9)
|
|
121
|
|
(74)
|
|
236
|
|
(130)
|
|
(107) %
|
|
(310)
|
|
(131) %
|
Weighted average number
of subscribers
|
6,313
|
|
6,518
|
|
6,334
|
|
6,451
|
|
(205)
|
|
(3) %
|
|
(117)
|
|
(2) %
|
Ad supported listener
hours (in billions)
|
2.84
|
|
3.03
|
|
5.53
|
|
5.90
|
|
(0.19)
|
|
(6) %
|
|
(0.37)
|
|
(6) %
|
Advertising revenue per
thousand listener hours (RPM)
|
$
99.75
|
|
$
100.35
|
|
$
94.90
|
|
$
93.26
|
|
$
(0.60)
|
|
(1) %
|
|
$
1.64
|
|
2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 679
|
|
$ 700
|
|
$
1,369
|
|
$
1,381
|
|
$ (21)
|
|
(3) %
|
|
$ (12)
|
|
(1) %
|
Free cash
flow
|
$ 435
|
|
$ 550
|
|
$ 693
|
|
$ 761
|
|
$
(115)
|
|
(21) %
|
|
$ (68)
|
|
(9) %
|
(1)
|
ARPU for Sirius XM
excludes subscriber revenue from our connected vehicle services of
$47 for each of the three months ended June 30, 2022 and 2021,
and $95 and $92 for the six months ended June 30, 2022 and
2021, respectively.
|
Reconciliation from GAAP Net income to Non-GAAP Adjusted
EBITDA:
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income:
|
$
292
|
|
$
433
|
|
$
601
|
|
$
652
|
Add back items excluded
from Adjusted EBITDA:
|
|
|
|
|
|
|
|
Impairment,
restructuring and acquisition costs
|
1
|
|
(136)
|
|
1
|
|
108
|
Share-based payment
expense
|
47
|
|
47
|
|
92
|
|
98
|
Depreciation and
amortization
|
135
|
|
131
|
|
270
|
|
263
|
Interest
expense
|
104
|
|
103
|
|
206
|
|
203
|
Other expense
(income)
|
4
|
|
(5)
|
|
2
|
|
(8)
|
Income tax
expense
|
96
|
|
127
|
|
197
|
|
65
|
Adjusted
EBITDA
|
$
679
|
|
$
700
|
|
$
1,369
|
|
$
1,381
|
Reconciliation of Free Cash Flow:
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash Flow
information
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
533
|
|
$
636
|
|
$
888
|
|
$
928
|
Net cash used in
investing activities
|
(191)
|
|
(112)
|
|
(333)
|
|
(190)
|
Net cash (used in)
provided by financing activities
|
(292)
|
|
541
|
|
(620)
|
|
311
|
Free Cash
Flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
533
|
|
636
|
|
888
|
|
928
|
Additions to property
and equipment
|
(99)
|
|
(86)
|
|
(196)
|
|
(164)
|
Sale (purchases) of
other investments
|
1
|
|
—
|
|
1
|
|
(3)
|
Free cash
flow
|
$
435
|
|
$
550
|
|
$
693
|
|
$
761
|
Reconciliation of SAC, per installation:
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
(costs in millions
and installs in thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Subscriber acquisition
costs, excluding connected vehicle services
|
$
91
|
|
$
89
|
|
$
181
|
|
$
175
|
Less: margin from sales
of radios and accessories, excluding connected vehicle
services
|
(42)
|
|
(47)
|
|
(92)
|
|
(100)
|
|
$
49
|
|
$
42
|
|
$
89
|
|
$
75
|
Installations
|
2,974
|
|
2,724
|
|
6,099
|
|
5,791
|
SAC, per installation
(a)
|
$
16.27
|
|
$
15.20
|
|
$
14.46
|
|
$
12.93
|
(a)
Amounts may not recalculate due to rounding.
|
About SiriusXM
Sirius XM Holdings Inc. (NASDAQ: SIRI) is the leading audio
entertainment company in North
America, and the premier programmer and platform for
subscription and digital advertising-supported audio
products. SiriusXM's platforms collectively reach
approximately 150 million listeners, the largest digital audio
audience across paid and free tiers in North America, and deliver music, talk, news,
comedy, entertainment and podcasts. SiriusXM offers the most
extensive lineup of professional and college sports in audio.
Pandora, a subsidiary of SiriusXM, is the largest ad-supported
audio entertainment streaming service in the U.S. SiriusXM's
subsidiaries Stitcher, Simplecast and AdsWizz make it a leader in
podcast hosting, production, distribution, analytics and
monetization. The Company's advertising sales arm, SXM Media,
leverages its scale, cross-platform sales organization, and ad tech
capabilities to deliver results for audio creators and advertisers.
SiriusXM, through Sirius XM Canada Holdings, Inc., also offers
satellite radio and audio entertainment in Canada. In
addition to its audio entertainment businesses, SiriusXM offers
connected vehicle services to automakers. For more about SiriusXM,
please go to: www.siriusxm.com.
This communication contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, but are not limited to,
statements about future financial and operating results, our plans,
objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified
by words such as "will likely result," "are expected to," "will
continue," "is anticipated," "estimated," "believe," "intend,"
"plan," "projection," "outlook" or words of similar meaning. Such
forward-looking statements are based upon the current beliefs and
expectations of our management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally
beyond our control. Actual results and the timing of events may
differ materially from the results anticipated in these
forward-looking statements.
The following factors, among others, could cause actual
results and the timing of events to differ materially from the
anticipated results or other expectations expressed in the
forward-looking statements: we have been, and may continue to
be, adversely affected by supply chain issues as a result of the
global semiconductor supply shortage; we face substantial
competition and that competition is likely to increase over time;
if our efforts to attract and retain subscribers and listeners, or
convert listeners into subscribers, are not successful, our
business will be adversely affected; we engage in extensive
marketing efforts and the continued effectiveness of those efforts
is an important part of our business; we rely on third parties for
the operation of our business, and the failure of third parties to
perform could adversely affect our business; we may not realize the
benefits of acquisitions and other strategic investments and
initiatives; the ongoing COVID-19 pandemic has introduced
significant uncertainty to our business; a substantial number
of our Sirius XM service subscribers periodically cancel their
subscriptions and we cannot predict how successful we will be at
retaining customers; our ability to profitably attract and retain
subscribers to our Sirius XM service as our marketing efforts reach
more price-sensitive consumers is uncertain; our business depends
in part on the auto industry; failure of our satellites would
significantly damage our business; our Sirius XM service may
experience harmful interference from wireless operations; our
Pandora ad-supported business has suffered a substantial and
consistent loss of monthly active users, which may adversely affect
our Pandora business; our failure to convince advertisers of the
benefits of our Pandora ad-supported service could harm our
business; if we are unable to maintain revenue growth from our
advertising products our results of operations will be adversely
affected; changes in mobile operating systems and browsers may
hinder our ability to sell advertising and market our services; if
we fail to accurately predict and play music, comedy or other
content that our Pandora listeners enjoy, we may fail to retain
existing and attract new listeners; privacy and data security laws
and regulations may hinder our ability to market our services, sell
advertising and impose legal liabilities; consumer protection laws
and our failure to comply with them could damage our business;
failure to comply with FCC requirements could damage our business;
if we fail to protect the security of personal information about
our customers, we could be subject to costly government enforcement
actions and private litigation and our reputation could suffer;
interruption or failure of our information technology and
communications systems could impair the delivery of our service and
harm our business; the market for music rights is changing and is
subject to significant uncertainties; our Pandora services depend
upon maintaining complex licenses with copyright owners, and these
licenses contain onerous terms; the rates we must pay for
"mechanical rights" to use musical works on our Pandora service
have increased substantially and these new rates may adversely
affect our business; failure to protect our intellectual property
or actions by third parties to enforce their intellectual property
rights could substantially harm our business and operating results;
some of our services and technologies may use "open source"
software, which may restrict how we use or distribute our services
or require that we release the source code subject to those
licenses; rapid technological and industry changes and new entrants
could adversely impact our services; we have a significant amount
of indebtedness, and our debt contains certain covenants that
restrict our operations; we are a "controlled company" within the
meaning of the NASDAQ listing rules and, as a result, qualify for,
and rely on, exemptions from certain corporate governance
requirements; while we currently pay a quarterly cash dividend to
holders of our common stock, we may change our dividend policy at
any time; our principal stockholder has significant influence,
including over actions requiring stockholder approval, and its
interests may differ from the interests of other holders of our
common stock; if we are unable to attract and retain qualified
personnel, our business could be harmed; our facilities could be
damaged by natural catastrophes or terrorist activities; the
unfavorable outcome of pending or future litigation could have an
adverse impact on our operations and financial condition; we may be
exposed to liabilities that other entertainment service providers
would not customarily be subject to; and our business and prospects
depend on the strength of our brands. Additional factors that could
cause our results to differ materially from those described in the
forward-looking statements can be found in our Annual Report on
Form 10-K for the year ended December 31, 2021, and our Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2022,
which are filed with the Securities and Exchange Commission (the
"SEC") and available at the SEC's Internet site
(http://www.sec.gov). The information set forth herein speaks only
as of the date hereof, and we disclaim any intention or obligation
to update any forward looking statements as a result of
developments occurring after the date of this
communication.
Source: SiriusXM
Contact for SiriusXM:
Investor contact:
Hooper Stevens
212.901.6718
Hooper.Stevens@siriusxm.com
Natalie Diana Candela
212.901.6672
Natalie.Candela@siriusxm.com
Media contact:
Jessica
Casano-Antonellis
212.901.6767
Jessica.Casano@siriusxm.com
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SOURCE Sirius XM Holdings Inc.