- Revenue in Third Quarter 2022 of $2.28 Billion; an Increase of 4%
Year-Over-Year
- Third Quarter 2022 Net Income of $247 Million; Diluted EPS of $0.06
- Adjusted EBITDA of $720
Million
- Third Quarter SiriusXM Self-Pay Net Additions of
187,000
- Company Announces 10% Increase to Quarterly Dividend;
Year-to-Date Capital Returns to Stockholders Total $1.8 Billion
- SiriusXM Reiterates Full-Year Financial and Subscriber
Guidance
NEW
YORK, Nov. 1, 2022 /PRNewswire/ -- SiriusXM
today announced third quarter 2022 operating and financial results,
including revenue of $2.28 billion,
an increase of 4% year-over-year. The company recorded net income
of $247 million in the third
quarter of 2022 compared to $343
million in the prior year period, representing earnings per
diluted common share of $0.06
compared to $0.08 in the prior year
period. Earnings per diluted common share for the current period
were $0.07 when excluding lease
impairments and other restructuring costs.
Adjusted EBITDA of $720 million in
the third quarter of 2022 remained roughly flat from the third
quarter of 2021.
"We are pleased to report third quarter results that reflect
strong execution during the period while leaning into investments
designed to ensure SiriusXM will thrive long-term," said
Jennifer Witz, Chief Executive
Officer. "This quarter we focused on enhancing the listener
experience and expanding our unparalleled stable of programming and
talent to continue providing our subscribers with the best in
audio, both in-car and in the SXM App. From live sports and
election coverage to exclusive artist channels and live Small Stage
performances, we are thrilled to offer a diverse and differentiated
content slate paired with technology that makes it easier than ever
to discover new favorites."
"SiriusXM delivered solid subscriber and revenue growth during
the third quarter, and while we continue to closely monitor
downward trends in the advertising market that add risk to our 2022
expectations, we are pleased to reiterate our full-year subscriber
and financial guidance," said Sean
Sullivan, Chief Financial Officer. "During the quarter,
SiriusXM returned $262 million in
capital to stockholders and ended the quarter with net debt to
adjusted EBITDA of 3.5 times. Today we are also announcing a 10%
increase in our quarterly dividend, bringing that dividend to an
annualized growth rate of 16% since its inception in 2016. With
limited near-term maturities, significant ongoing cash generation,
and approximately $1.4 billion in
undrawn revolver capacity and cash, we have tremendous flexibility
to continue investing in our business and evaluating strategic
opportunities," added Sullivan.
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 September 30, 2022. The financial
highlights below exclude the impact of share-based payment
expense.
SiriusXM Segment Financial Metrics and Highlights
Self-Pay Subscribers Increased to
32.2 Million
SiriusXM ended the third quarter of
2022 with 32.2 million self-pay subscribers. During the third
quarter of 2022, SiriusXM self-pay subscribers increased by
187,000, aided by trial funnel growth in the prior quarter and a
growing base of streaming-only subscribers. Paid promotional
subscribers decreased by 49,000, and total subscribers were 34.2
million as of September 30, 2022. The SiriusXM trial funnel
stood at approximately 7.0 million at the end of the quarter, down
from 7.3 million at the end of the second quarter of 2022,
reflecting weaker auto sales during the quarter. Self-pay monthly
churn of 1.5% remained at record low levels.
SiriusXM Revenue Increased 5% to $1.7
Billion
In the third quarter 2022, revenue of
$1.7 billion grew 5% compared to the
third quarter of 2021. This growth was driven by an $0.88 increase in average revenue per user
(ARPU), up 6% year-over-year, resulting in a record ARPU of
$15.72. Third quarter 2022 revenue
also benefited from a 1% increase in SiriusXM self-pay subscribers
and 6% growth in advertising on the SiriusXM platform, partially
offset by a lower base of paid promotional subscribers.
Gross Profit Increased to $1.1
Billion
Total cost of services at SiriusXM was
$665 million for the quarter, a 3%
increase 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 62%, roughly a point higher than the
prior year period.
Expanded Content Offering
In the third quarter,
SiriusXM launched several artists' shows, channels, and special
events, including six-time Grammy Award-winning singer-songwriter,
producer, and #1 New York Times
bestselling author Brandi Carlile
for a monthly radio show, Somewhere Over the Radio. This quarter
also saw the launch of The Chicks Channel, a limited-time channel
celebrating music from the thirteen-time Grammy Award-winning
all-female group formerly known as The Dixie Chicks. The company
also extended its NFL agreement, making SiriusXM the exclusive
third party audio broadcaster of every NFL game. SiriusXM's Small
Stage Series hosted two iconic bands at the Apollo Theater in NYC,
Pearl Jam and the Red Hot Chili Peppers. The Small Stage Series
also presented Halsey at Union Transfer in Philadelphia, John Legend at the El Rey
Theater in Los Angeles, and Lizzo
at Saint Andrew's Hall in her hometown of Detroit.
Product Highlights
Yesterday, the company announced
SiriusXM will soon be available in Lucid electric vehicles with
hundreds of SiriusXM channels and features like SiriusXM's Pandora
Stations, on-demand content and podcasts. Lucid customers will
receive an over-the-air update with a free beta version of SiriusXM
in their vehicles in the coming months. The full SiriusXM
experience is expected to become accessible to all Lucid drivers
through an over-the-air update in 2023. All existing Lucid
customers will also receive a standard free SiriusXM trial
subscription after the full launch in 2023.
During the third quarter, SiriusXM released personalization
improvements to its in-vehicle 360L product, adding data-driven
music and talk recommendations on the For You tab and one-touch
access to Pandora Artist Stations. The update is live in select GM
vehicles and will launch with more automakers offering 360L in
2023. SiriusXM also made improvements to the SXM App on Apple's
CarPlay, introducing new and redesigned navigation and
recommendation carousels. An upgraded SiriusXM experience on
Android Auto is expected to be released in the coming months.
Pandora and Off-Platform Segment Financial Metrics and
Highlights
Advertising Revenue Increased to $407
Million
Third quarter 2022 advertising revenue in the
Pandora and Off-Platform segment increased to $407 million, a 1% increase from the same period
in 2021. Pandora's advertising revenue per thousand hours (RPM)
during the quarter was $103, down 5%
from $109 in the third quarter of
2021. During the quarter, the company's podcasting and off-platform
businesses generated $123 million in
total revenue, an increase of 37% year-over-year.
Total Advertising-Supported Listener Hours of 2.75
Billion
Monthly Active Users (MAUs) at Pandora were 48.8
million in the third quarter of 2022, down 7% from 52.6 million in
the prior year period. Total ad-supported listener hours were 2.75
billion in the third quarter of 2022, down from 2.89 billion in the
2021 period. Average monthly listening hours per ad-supported user
climbed 3% to 20.8 in the third quarter of 2022 compared to 20.1 in
the third quarter of 2021.
Self-Pay Subscribers Remained Flat
Self-pay
subscribers to the Pandora Plus and Pandora Premium services
remained flat in the third quarter of 2022, ending the period at
6.3 million.
Gross Profit Declines 12%
Subscriber revenue decreased
by 2%, advertising revenue increased by 1% and total cost of
services increased by 7% during the third quarter of 2022. The
increased costs were driven primarily by investments in podcast
content. This resulted in gross profit in the Pandora and
Off-Platform segment of $173 million
during the third quarter of 2022, a decrease of 12% compared to
$197 million in the corresponding
2021 period and produced a gross margin for the quarter of 32%,
down 5 percentage points from the prior year period.
Improved Personalized Recommendations
Pandora's
personalized music experience has been driven primarily by
proprietary algorithms that continually learn from past user
behavior, enabling Pandora to deliver music catered to users'
individual tastes and preferences. During the third quarter of
2022, the company implemented improvements to Pandora's
recommendation algorithms, including the addition of more signals
derived from listener interactions with songs and artists.
Expanded Ad Representation and Podcasting
SXM Media,
the company's combined advertising sales organization, is one of
the nation's preeminent sellers of podcast ads. In the third
quarter of 2022, SXM Media – which currently represents five of the
top 25 podcasts in the country, per Edison Research – signed new
global advertising sales rights agreements with "The School of
Greatness" and "The Mel Robbins Podcast." These agreements showcase
the company's ongoing commitment to expanding its off-platform
business and growing podcast revenue.
Additionally, this past quarter, SXM Media enhanced its podcast
buying solutions for advertisers. The company's new "Podcast
Everywhere" solution allows brands to reach their audience wherever
they are listening, and the new "Podcast Select" product gives
advertisers better control over audience targeting. Revenue from
these two solutions plus podcast programmatic advertising revenue
meaningfully increased compared to a year ago, with more than 250
additional advertisers leveraging network solutions compared to the
year ago quarter.
ADDITIONAL FINANCIAL
HIGHLIGHTS
Subscriber acquisition costs increased by 21% to $86 million in the third quarter of 2022 compared
to $71 million in the prior year
period, driven by higher equipment installations by automakers.
Sales and marketing costs increased to $268
million in the third quarter of 2022 compared to
$254 million in the third quarter of
2021. The increase was driven by marketing efforts, including the
multi-media national ad campaign promoting SiriusXM. Engineering,
design and development costs remained roughly flat at $59 million compared to the prior year period,
and general and administrative expenses increased by 7% to
$117 million in 2022.
Free cash flow was $329 million in
the third quarter of 2022, down approximately 44% from the prior
year period, as cash taxes rose by $56
million year-over-year and the third quarter of 2021
benefited from $208 million in
satellite insurance recoveries.
The $262 million of capital
SiriusXM returned to stockholders in the third quarter of 2022
consisted of $176 million in common
stock repurchases and $86 million in
dividends. The company ended the quarter with net debt to adjusted
EBITDA of 3.5 times.
As of September 30, 2022, its
Board of Directors had authorized for repurchase an aggregate of
$18 billion of common stock. As of
September 30, 2022, the company's
cumulative repurchases since December
2012 under its stock repurchase program totaled 3.65 billion
shares for $16.5 billion, leaving
$1.5 billion available for additional
repurchases under the existing stock repurchase program
authorization.
Shares of common stock may be purchased from time to time on the
open market and in privately negotiated transactions, including in
accelerated stock repurchase transactions and transactions with
Liberty Media and its affiliates. The company intends to fund the
additional repurchases through a combination of cash on hand, cash
generated by operations and future borrowings. The size and timing
of any purchases will be based on a number of factors, including
price and business and market conditions.
INCREASES QUARTERLY CASH DIVIDEND
BY 10%
The company announced that its Board of Directors declared a
quarterly cash dividend of $0.0242
per share of common stock, reflecting an increase of approximately
10% over the previous quarter dividend. This quarterly dividend is
payable in cash on November 30, 2022,
to stockholders of record at the close of business on November 11, 2022.
The company first initiated a regular quarterly dividend in
November 2016 at $0.01 per share; this marks the sixth year the
company has increased the quarterly dividend. Since its inception,
the company has increased the quarterly dividend at a cumulative
annualized growth rate of approximately 16% per year.
2022 GUIDANCE
The company continues to expect positive full-year 2022 self-pay
net subscriber additions and reiterated 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.
THIRD QUARTER 2022
RESULTS
SIRIUS XM HOLDINGS INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
(UNAUDITED)
|
|
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
(in millions, except
per share data)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue:
|
|
|
|
|
|
|
|
Subscriber
revenue
|
$
1,734
|
|
$
1,666
|
|
$
5,166
|
|
$
4,918
|
Advertising
revenue
|
457
|
|
451
|
|
1,292
|
|
1,235
|
Equipment
revenue
|
50
|
|
41
|
|
148
|
|
149
|
Other
revenue
|
39
|
|
40
|
|
114
|
|
113
|
Total
revenue
|
2,280
|
|
2,198
|
|
6,720
|
|
6,415
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
services:
|
|
|
|
|
|
|
|
Revenue share and
royalties
|
709
|
|
671
|
|
2,090
|
|
1,974
|
Programming and
content
|
155
|
|
141
|
|
448
|
|
407
|
Customer service and
billing
|
122
|
|
127
|
|
373
|
|
372
|
Transmission
|
51
|
|
54
|
|
157
|
|
155
|
Cost of
equipment
|
4
|
|
4
|
|
9
|
|
12
|
Subscriber acquisition
costs
|
86
|
|
71
|
|
267
|
|
245
|
Sales and
marketing
|
281
|
|
269
|
|
838
|
|
725
|
Engineering, design and
development
|
70
|
|
68
|
|
208
|
|
197
|
General and
administrative
|
132
|
|
125
|
|
382
|
|
376
|
Depreciation and
amortization
|
134
|
|
135
|
|
404
|
|
399
|
Impairment,
restructuring and acquisition costs
|
69
|
|
(95)
|
|
70
|
|
13
|
Total operating
expenses
|
1,813
|
|
1,570
|
|
5,246
|
|
4,875
|
Income from
operations
|
467
|
|
628
|
|
1,474
|
|
1,540
|
Other (expense)
income:
|
|
|
|
|
|
|
|
Interest
expense
|
(107)
|
|
(111)
|
|
(314)
|
|
(313)
|
Loss on extinguishment
of debt
|
—
|
|
(83)
|
|
—
|
|
(83)
|
Other (expense)
income
|
(3)
|
|
(1)
|
|
(5)
|
|
8
|
Total other
expense
|
(110)
|
|
(195)
|
|
(319)
|
|
(388)
|
Income before income
taxes
|
357
|
|
433
|
|
1,155
|
|
1,152
|
Income tax
expense
|
(110)
|
|
(90)
|
|
(307)
|
|
(157)
|
Net income
|
$
247
|
|
$
343
|
|
$
848
|
|
$
995
|
Foreign currency
translation adjustment, net of tax
|
(21)
|
|
(10)
|
|
(23)
|
|
2
|
Total comprehensive
income
|
$
226
|
|
$
333
|
|
$
825
|
|
$
997
|
Net income per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.06
|
|
$
0.08
|
|
$
0.22
|
|
$
0.24
|
Diluted
|
$
0.06
|
|
$
0.08
|
|
$
0.21
|
|
$
0.24
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
3,900
|
|
4,044
|
|
3,925
|
|
4,086
|
Diluted
|
3,968
|
|
4,119
|
|
4,001
|
|
4,170
|
Dividends declared per
common share
|
$
0.0219615
|
|
$
0.014641
|
|
$
0.315885
|
|
$
0.043923
|
SIRIUS XM HOLDINGS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
|
|
(in millions, except
per share data)
|
September 30,
2022
|
|
December 31,
2021
|
ASSETS
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
39
|
|
$
191
|
Receivables,
net
|
658
|
|
722
|
Related party current
assets
|
32
|
|
21
|
Prepaid expenses and
other current assets
|
303
|
|
246
|
Total current
assets
|
1,032
|
|
1,180
|
Property and equipment,
net
|
1,438
|
|
1,450
|
Intangible assets,
net
|
3,089
|
|
3,186
|
Goodwill
|
3,249
|
|
3,151
|
Related party long-term
assets
|
498
|
|
526
|
Deferred tax
assets
|
200
|
|
200
|
Operating lease
right-of-use assets
|
317
|
|
358
|
Other long-term
assets
|
236
|
|
223
|
Total
assets
|
$
10,059
|
|
$
10,274
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
1,248
|
|
$
1,299
|
Accrued
interest
|
72
|
|
173
|
Current portion of
deferred revenue
|
1,381
|
|
1,454
|
Current maturities of
debt
|
2
|
|
—
|
Operating lease
current liabilities
|
48
|
|
49
|
Related party current
liabilities
|
—
|
|
5
|
Total current
liabilities
|
2,751
|
|
2,980
|
Long-term deferred
revenue
|
83
|
|
97
|
Long-term
debt
|
9,782
|
|
8,832
|
Deferred tax
liabilities
|
604
|
|
478
|
Operating lease
liabilities
|
327
|
|
362
|
Other long-term
liabilities
|
128
|
|
150
|
Total
liabilities
|
13,675
|
|
12,899
|
Stockholders' equity
(deficit):
|
|
|
|
Common stock, par
value $0.001 per share; 9,000 shares authorized; 3,896 and 3,968
shares issued; 3,895 and 3,967 shares outstanding at
September 30, 2022 and December 31, 2021,
respectively
|
4
|
|
4
|
Accumulated other
comprehensive (loss) income, net of tax
|
(8)
|
|
15
|
Additional paid-in
capital
|
—
|
|
—
|
Treasury stock, at
cost; 1 share of common stock at September 30, 2022 and
December 31, 2021
|
(3)
|
|
(8)
|
Accumulated
deficit
|
(3,609)
|
|
(2,636)
|
Total stockholders'
equity (deficit)
|
(3,616)
|
|
(2,625)
|
Total liabilities and
stockholders' equity (deficit)
|
$
10,059
|
|
$
10,274
|
SIRIUS XM HOLDINGS INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF CASH FLOWS
(UNAUDITED)
|
|
|
For The Nine Months
Ended September 30,
|
(in
millions)
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
848
|
|
$
995
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
404
|
|
399
|
Non-cash impairment
and restructuring costs
|
68
|
|
24
|
Non-cash interest
expense, net of amortization of premium
|
12
|
|
16
|
Change in fair value
of contingent consideration
|
—
|
|
(17)
|
Provision for doubtful
accounts
|
43
|
|
37
|
Loss on extinguishment
of debt
|
—
|
|
83
|
Loss on unconsolidated
entity investments, net
|
—
|
|
11
|
Dividend received from
unconsolidated entity investment
|
—
|
|
1
|
Loss (gain) on other
investments
|
11
|
|
(4)
|
Share-based payment
expense
|
143
|
|
149
|
Deferred income tax
expense
|
132
|
|
101
|
Amortization of
right-of-use assets
|
37
|
|
46
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
22
|
|
(22)
|
Related party,
net
|
(30)
|
|
12
|
Prepaid expenses and
other current assets
|
(57)
|
|
(12)
|
Other long-term
assets
|
(3)
|
|
(6)
|
Accounts payable and
accrued expenses
|
(72)
|
|
(60)
|
Accrued
interest
|
(101)
|
|
(94)
|
Deferred
revenue
|
(87)
|
|
(236)
|
Operating lease
liabilities
|
(48)
|
|
(47)
|
Other long-term
liabilities
|
(22)
|
|
(5)
|
Net cash provided by
operating activities
|
1,300
|
|
1,371
|
Cash flows from
investing activities:
|
|
|
|
Additions to property
and equipment
|
(279)
|
|
(244)
|
Proceeds from
insurance recoveries
|
—
|
|
225
|
Sale (purchases) of
other investments
|
1
|
|
(3)
|
Acquisition of
business, net of cash acquired
|
(136)
|
|
(14)
|
Investments in related
parties and other equity investees
|
(1)
|
|
(16)
|
Repayment from related
party
|
—
|
|
2
|
Net cash used in
investing activities
|
(415)
|
|
(50)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from exercise
of stock options
|
4
|
|
6
|
Taxes paid from net
share settlements for stock-based compensation
|
(102)
|
|
(88)
|
Revolving credit
facility, net
|
421
|
|
(654)
|
Proceeds from
long-term borrowings, net of costs
|
499
|
|
4,442
|
Principal payments of
long-term borrowings
|
(3)
|
|
(3,503)
|
Payment of premiums on
redemption of debt
|
—
|
|
(62)
|
Payment of contingent
consideration for business acquisition
|
(3)
|
|
(19)
|
Distribution to parent
related to Tax Sharing Agreement
|
(8)
|
|
—
|
Common stock
repurchased and retired
|
(599)
|
|
(1,174)
|
Dividends
paid
|
(1,245)
|
|
(180)
|
Net cash used in
financing activities
|
(1,036)
|
|
(1,232)
|
Net (decrease) increase
in cash, cash equivalents and restricted cash
|
(151)
|
|
89
|
Cash, cash equivalents
and restricted cash at beginning of period
(1)
|
199
|
|
83
|
Cash, cash equivalents
and restricted cash at end of period (1)
|
$
48
|
|
$
172
|
|
|
(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)
|
September 30,
2022
|
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
Cash and cash
equivalents
|
$
39
|
|
$
191
|
|
$
164
|
|
$
71
|
Restricted cash
included in Other long-term assets
|
9
|
|
8
|
|
8
|
|
12
|
Total cash, cash
equivalents and restricted cash at end of period
|
$
48
|
|
$
199
|
|
$
172
|
|
$
83
|
Unaudited Results
Set forth below are our results of
operations for the three and nine months ended September 30,
2022 compared with the three and nine months ended
September 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 September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
2022 vs 2021
Change
|
|
|
|
Three
Months
|
|
Nine
Months
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sirius XM:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber
revenue
|
$ 1,603
|
|
$ 1,532
|
|
$ 4,773
|
|
$ 4,521
|
|
$
71
|
|
5 %
|
|
$ 252
|
|
6 %
|
Advertising
revenue
|
50
|
|
47
|
|
146
|
|
135
|
|
3
|
|
6 %
|
|
11
|
|
8 %
|
Equipment
revenue
|
50
|
|
41
|
|
148
|
|
149
|
|
9
|
|
22 %
|
|
(1)
|
|
(1) %
|
Other
revenue
|
39
|
|
40
|
|
114
|
|
113
|
|
(1)
|
|
(3) %
|
|
1
|
|
1 %
|
Total Sirius XM
revenue
|
1,742
|
|
1,660
|
|
5,181
|
|
4,918
|
|
82
|
|
5 %
|
|
263
|
|
5 %
|
Pandora and
Off-platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber
revenue
|
131
|
|
134
|
|
393
|
|
397
|
|
(3)
|
|
(2) %
|
|
(4)
|
|
(1) %
|
Advertising
revenue
|
407
|
|
404
|
|
1,146
|
|
1,100
|
|
3
|
|
1 %
|
|
46
|
|
4 %
|
Total Pandora and
Off-platform revenue
|
538
|
|
538
|
|
1,539
|
|
1,497
|
|
—
|
|
— %
|
|
42
|
|
3 %
|
Total consolidated
revenue
|
2,280
|
|
2,198
|
|
6,720
|
|
6,415
|
|
82
|
|
4 %
|
|
305
|
|
5 %
|
Cost of
services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sirius XM:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue share and
royalties
|
391
|
|
378
|
|
1,169
|
|
1,144
|
|
13
|
|
3 %
|
|
25
|
|
2 %
|
Programming and
content
|
131
|
|
121
|
|
383
|
|
351
|
|
10
|
|
8 %
|
|
32
|
|
9 %
|
Customer service and
billing
|
102
|
|
104
|
|
306
|
|
304
|
|
(2)
|
|
(2) %
|
|
2
|
|
1 %
|
Transmission
|
37
|
|
38
|
|
113
|
|
105
|
|
(1)
|
|
(3) %
|
|
8
|
|
8 %
|
Cost of
equipment
|
4
|
|
4
|
|
9
|
|
12
|
|
—
|
|
— %
|
|
(3)
|
|
(25) %
|
Total Sirius XM cost
of services
|
665
|
|
645
|
|
1,980
|
|
1,916
|
|
20
|
|
3 %
|
|
64
|
|
3 %
|
Pandora and
Off-platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue share and
royalties
|
318
|
|
293
|
|
921
|
|
830
|
|
25
|
|
9 %
|
|
91
|
|
11 %
|
Programming and
content
|
15
|
|
12
|
|
39
|
|
32
|
|
3
|
|
25 %
|
|
7
|
|
22 %
|
Customer service and
billing
|
19
|
|
21
|
|
63
|
|
63
|
|
(2)
|
|
(10) %
|
|
—
|
|
— %
|
Transmission
|
13
|
|
15
|
|
40
|
|
46
|
|
(2)
|
|
(13) %
|
|
(6)
|
|
(13) %
|
Total Pandora and
Off-platform cost of services
|
365
|
|
341
|
|
1,063
|
|
971
|
|
24
|
|
7 %
|
|
92
|
|
9 %
|
Total consolidated cost
of services
|
1,030
|
|
986
|
|
3,043
|
|
2,887
|
|
44
|
|
4 %
|
|
156
|
|
5 %
|
Subscriber acquisition
costs
|
86
|
|
71
|
|
267
|
|
245
|
|
15
|
|
21 %
|
|
22
|
|
9 %
|
Sales and
marketing
|
268
|
|
254
|
|
799
|
|
682
|
|
14
|
|
6 %
|
|
117
|
|
17 %
|
Engineering, design and
development
|
59
|
|
59
|
|
181
|
|
171
|
|
—
|
|
— %
|
|
10
|
|
6 %
|
General and
administrative
|
117
|
|
109
|
|
339
|
|
329
|
|
8
|
|
7 %
|
|
10
|
|
3 %
|
Depreciation and
amortization
|
134
|
|
135
|
|
404
|
|
399
|
|
(1)
|
|
(1) %
|
|
5
|
|
1 %
|
Impairment,
restructuring and acquisition costs
|
69
|
|
(95)
|
|
70
|
|
13
|
|
164
|
|
nm
|
|
57
|
|
nm
|
Share-based payment
expense (1)
|
50
|
|
51
|
|
143
|
|
149
|
|
(1)
|
|
(2) %
|
|
(6)
|
|
(4) %
|
Total operating
expenses
|
1,813
|
|
1,570
|
|
5,246
|
|
4,875
|
|
243
|
|
15 %
|
|
371
|
|
8 %
|
Income (loss) from
operations
|
467
|
|
628
|
|
1,474
|
|
1,540
|
|
(161)
|
|
(26) %
|
|
(66)
|
|
(4) %
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(107)
|
|
(111)
|
|
(314)
|
|
(313)
|
|
4
|
|
4 %
|
|
(1)
|
|
— %
|
Loss on extinguishment
of debt
|
—
|
|
(83)
|
|
—
|
|
(83)
|
|
83
|
|
100 %
|
|
83
|
|
100 %
|
Other (expense)
income
|
(3)
|
|
(1)
|
|
(5)
|
|
8
|
|
(2)
|
|
nm
|
|
(13)
|
|
nm
|
Total other
expense
|
(110)
|
|
(195)
|
|
(319)
|
|
(388)
|
|
85
|
|
44 %
|
|
69
|
|
18 %
|
Income (loss) before
income taxes
|
357
|
|
433
|
|
1,155
|
|
1,152
|
|
(76)
|
|
(18) %
|
|
3
|
|
— %
|
Income tax
expense
|
(110)
|
|
(90)
|
|
(307)
|
|
(157)
|
|
(20)
|
|
(22) %
|
|
(150)
|
|
nm
|
Net income
|
$
247
|
|
$
343
|
|
$
848
|
|
$
995
|
|
$ (96)
|
|
(28) %
|
|
$
(147)
|
|
(15) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
720
|
|
$
719
|
|
$ 2,091
|
|
$ 2,101
|
|
$ 1
|
|
— %
|
|
$ (10)
|
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit - Sirius
XM
|
$ 1,077
|
|
$ 1,015
|
|
$ 3,201
|
|
$ 3,002
|
|
$
62
|
|
6 %
|
|
$ 199
|
|
7 %
|
Gross Margin % -
Sirius XM
|
62 %
|
|
61 %
|
|
62 %
|
|
61 %
|
|
1 %
|
|
2 %
|
|
1 %
|
|
2 %
|
Gross Profit - Pandora
and Off-platform
|
$
173
|
|
$
197
|
|
$
476
|
|
$
526
|
|
$ (24)
|
|
(12) %
|
|
$ (50)
|
|
(10) %
|
Gross Margin % -
Pandora and Off-platform
|
32 %
|
|
37 %
|
|
31 %
|
|
35 %
|
|
(5) %
|
|
(14) %
|
|
(4) %
|
|
(11) %
|
nm - not
meaningful
|
(1)
|
Allocation of
share-based payment expense:
|
|
|
|
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Programming and
content - Sirius XM
|
$
8
|
|
$
8
|
|
$
24
|
|
$
22
|
|
Customer service and
billing - Sirius XM
|
1
|
|
2
|
|
4
|
|
5
|
|
Transmission - Sirius
XM
|
1
|
|
1
|
|
3
|
|
3
|
|
Programming and
content - Pandora and Off-platform
|
1
|
|
—
|
|
2
|
|
2
|
|
Transmission - Pandora
and Off-platform
|
—
|
|
—
|
|
1
|
|
1
|
|
Sales and
marketing
|
13
|
|
15
|
|
39
|
|
43
|
|
Engineering, design
and development
|
11
|
|
9
|
|
27
|
|
26
|
|
General and
administrative
|
15
|
|
16
|
|
43
|
|
47
|
|
Total share-based
payment expense
|
$
50
|
|
$
51
|
|
$
143
|
|
$
149
|
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 September 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
September 30, 2022 compared to September 30, 2021:
|
As of September
30,
|
|
2022 vs 2021
Change
|
(subscribers in
thousands)
|
2022
|
|
2021
|
|
Amount
|
|
%
|
Sirius
XM
|
|
|
|
|
|
|
|
Self-pay
subscribers
|
32,224
|
|
31,985
|
|
239
|
|
1 %
|
Paid promotional
subscribers
|
1,946
|
|
2,280
|
|
(334)
|
|
(15) %
|
Ending
subscribers
|
34,170
|
|
34,265
|
|
(95)
|
|
— %
|
Sirius XM Canada
subscribers
|
2,235
|
|
2,262
|
|
(27)
|
|
(1) %
|
|
|
|
|
|
|
|
|
Pandora and
Off-platform
|
|
|
|
|
|
|
|
Monthly active users -
all services
|
48,769
|
|
52,618
|
|
(3,849)
|
|
(7) %
|
Self-pay
subscribers
|
6,267
|
|
6,452
|
|
(185)
|
|
(3) %
|
Paid promotional
subscribers
|
—
|
|
71
|
|
(71)
|
|
(100) %
|
Ending
subscribers
|
6,267
|
|
6,523
|
|
(256)
|
|
(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 nine months ended
September 30, 2022 and 2021:
|
For the Three
Months
Ended September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
2022 vs 2021
Change
|
|
|
|
Three
Months
|
|
Nine
Months
|
(subscribers in
thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
Sirius
XM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Self-pay
subscribers
|
187
|
|
616
|
|
186
|
|
1,097
|
|
(429)
|
|
(70) %
|
|
(911)
|
|
(83) %
|
Paid promotional
subscribers
|
(49)
|
|
(828)
|
|
(48)
|
|
(1,547)
|
|
779
|
|
94 %
|
|
1,499
|
|
97 %
|
Net
additions
|
138
|
|
(212)
|
|
138
|
|
(450)
|
|
350
|
|
165 %
|
|
588
|
|
131 %
|
Weighted average number
of subscribers
|
34,076
|
|
34,372
|
|
33,977
|
|
34,435
|
|
(296)
|
|
(1) %
|
|
(458)
|
|
(1) %
|
Average self-pay
monthly churn
|
1.5 %
|
|
1.5 %
|
|
1.6 %
|
|
1.6 %
|
|
— %
|
|
— %
|
|
— %
|
|
— %
|
ARPU
(1)
|
$
15.72
|
|
$
14.84
|
|
$
15.63
|
|
$
14.57
|
|
$
0.88
|
|
6 %
|
|
$
1.06
|
|
7 %
|
SAC, per
installation
|
$
12.73
|
|
$
13.66
|
|
$
13.87
|
|
$
13.14
|
|
$
(0.93)
|
|
(7) %
|
|
$
0.73
|
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pandora and
Off-platform
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Self-pay
subscribers
|
(52)
|
|
(59)
|
|
(57)
|
|
172
|
|
7
|
|
(12) %
|
|
(229)
|
|
(133) %
|
Paid promotional
subscribers
|
—
|
|
4
|
|
(69)
|
|
9
|
|
(4)
|
|
(100) %
|
|
(78)
|
|
(867) %
|
Net
additions
|
(52)
|
|
(55)
|
|
(126)
|
|
181
|
|
3
|
|
(5) %
|
|
(307)
|
|
(170) %
|
Weighted average number
of subscribers
|
6,292
|
|
6,554
|
|
6,320
|
|
6,486
|
|
(262)
|
|
(4) %
|
|
(166)
|
|
(3) %
|
Ad supported listener
hours (in billions)
|
2.75
|
|
2.89
|
|
8.28
|
|
8.78
|
|
(0.14)
|
|
(5) %
|
|
(0.50)
|
|
(6) %
|
Advertising revenue per
thousand listener hours (RPM)
|
$
103.32
|
|
$
109.02
|
|
$
97.70
|
|
$
98.44
|
|
$
(5.70)
|
|
(5) %
|
|
$
(0.74)
|
|
(1) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 720
|
|
$ 719
|
|
$
2,091
|
|
$
2,101
|
|
$
1
|
|
— %
|
|
$ (10)
|
|
— %
|
Free cash
flow
|
$ 329
|
|
$ 588
|
|
$
1,022
|
|
$
1,349
|
|
$
(259)
|
|
(44) %
|
|
$
(327)
|
|
(24) %
|
|
|
(1)
|
ARPU for Sirius XM
excludes subscriber revenue from our connected vehicle services of
$46 and $49 for the three months ended September 30, 2022 and
2021, respectively, and $141 for each of the nine months
ended September 30, 2022 and 2021.
|
Reconciliation from GAAP Net income to Non-GAAP Adjusted
EBITDA:
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income:
|
$
247
|
|
$
343
|
|
$
848
|
|
$
995
|
Add back items excluded
from Adjusted EBITDA:
|
|
|
|
|
|
|
|
Impairment,
restructuring and acquisition costs
|
69
|
|
(95)
|
|
70
|
|
13
|
Share-based payment
expense
|
50
|
|
51
|
|
143
|
|
149
|
Depreciation and
amortization
|
134
|
|
135
|
|
404
|
|
399
|
Interest
expense
|
107
|
|
111
|
|
314
|
|
313
|
Loss on extinguishment
of debt
|
—
|
|
83
|
|
—
|
|
83
|
Other expense
(income)
|
3
|
|
1
|
|
5
|
|
(8)
|
Income tax
expense
|
110
|
|
90
|
|
307
|
|
157
|
Adjusted
EBITDA
|
$
720
|
|
$
719
|
|
$
2,091
|
|
$
2,101
|
Reconciliation of Free Cash Flow:
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash Flow
information
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
412
|
|
$
460
|
|
$
1,300
|
|
$
1,371
|
Net cash used in
investing activities
|
(82)
|
|
123
|
|
(415)
|
|
(50)
|
Net cash used in
financing activities
|
(416)
|
|
(1,543)
|
|
(1,036)
|
|
(1,232)
|
Free Cash
Flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
412
|
|
460
|
|
1,300
|
|
1,371
|
Additions to property
and equipment
|
(83)
|
|
(80)
|
|
(279)
|
|
(244)
|
Sale (purchases) of
other investments
|
—
|
|
—
|
|
1
|
|
(3)
|
Satellite insurance
recoveries
|
—
|
|
208
|
|
—
|
|
225
|
Free cash
flow
|
$
329
|
|
$
588
|
|
$
1,022
|
|
$
1,349
|
Reconciliation of SAC, per installation:
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
(costs in millions
and installs in thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Subscriber acquisition
costs, excluding connected
vehicle services
|
$
86
|
|
$
71
|
|
$
267
|
|
$
245
|
Less: margin from sales
of radios and accessories,
excluding connected vehicle services
|
(46)
|
|
(37)
|
|
(139)
|
|
(137)
|
|
$
40
|
|
$
34
|
|
$
128
|
|
$
108
|
Installations
|
3,162
|
|
2,446
|
|
9,260
|
|
8,237
|
SAC, per installation
(a)
|
$
12.73
|
|
$
13.66
|
|
$
13.87
|
|
$
13.14
|
(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.