SiriusXM Saw Serious Revenue Growth of 37 Percent in Third Quarter

Driven, in part, by the February acquisition of Pandora

SiriusXM Saw Serious Revenue Growth of 37 Percent in Third Quarter

Source: SiriusXM

Satellite radio company SiriusXM saw serious revenue growth in the third quarter with total revenue of $2.0 billion, a 37% increase year-over-year. The revenue boost was driven by the acquisition of Pandora in February of this year for $3.5 billion. The company reported net income of $246 million, down from $343 million during the same period last year. Net income per diluted common share was $0.05 for the third quarter of 2019, compared to $0.07 for the third quarter of 2018. SiriusXM attributed the net income decrease to refinancing expenses.

“SiriusXM’s robust third quarter saw strong results across the board. Total net additions benefited from continuing strength in the auto sector, and our adjusted EBITDA hit an all-time quarterly record of $657 million. Things have never been more exciting at the company as we continue to invest in our brands, content, products and expanded OEM distribution, said Jim Meyer, SiriusXM CEO, in an October 31 news release.

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With two months left in the year, we are raising 2019 guidance for revenue, adjusted EBITDA and free cash flow and we are confident in our expectations for self-pay subscriber growth,” Meyer added.

Other quarterly highlights from the quarter include:

– SiriusXM added 302,000 net new self-pay subscribers, bringing the total number of self-pay subscribers to 29.6 million.
– Self-pay monthly churn was 1.7% compared to 1.8% in Q3 2018.
– Total net subscriber additions in Q3 were 210,000, giving the company 34.6 million total subscribers at the end of the quarter.
– Paid promotional subscribers decreased due to auto manufacturers offering paid promotional subscriptions.
– SiriusXM revenue was close to $1.6 billion, a 7% increase year-over-year, driven by a 3% increase in total subscribers and an increase in average revenue per user (ARPU) which was $13.90 at the end of the quarter.
– Subscriber revenue represents 77.4% of total revenue, followed by advertising revenue at 18.2%, equipment revenue at 2.2% and other revenue at 2.2%.
– Ad revenue at Pandora hit $315 million, a record for the streaming radio company and an 8% increase year-over-year.
– Total ad supported listener hours were 3.32 billion with 63.1 monthly active users, down from 68.8 million in Q3 2018.
– Pandora added 33,000 net new self-pay subscribers, bringing their total to nearly 6.3 million self-pay subscribers.
– During the quarter, a one-year Pandora paid promotional subscription made available by T-Mobile ended.
– Total revenue for Pandora was $447 million, a 7% increase, due in part to a 5% increase in subscriber revenue of $132 million.
– Gross profit from Pandora was $169 million, a 19% increase year-over-year, and gross margin was 38%.

Though just announced recently, SiriusXM mentioned its new relationship with Marvel in its earnings report. SiriusXM and Pandora have reached a multi-year agreement with Marvel to produce exclusive podcasts, including scripted and nonscripted series and live events. SiriusXM and Pandora will also have the opportunity to debut podcasts on their networks before they will be made available elsewhere. The company also mentioned the official launch of its Hollywood studio complex and a special series of shows hosted by Howard Stern with big name celebrities as guests including Adam Levine, Julie Roberts, Adam Levine, Green Day and Dave Matthews.

SiriusXM Saw Serious Revenue Growth of 37 Percent in Third Quarter

Source: Marvel

SiriusXM offered updated guidance for the full year 2019:

– SiriusXM self-pay net subscriber additions of nearly 1 million
– Pro forma revenue of approximately $7.85 billion
– Adjusted EBITDA of approximately $2.4 billion
– Free cash flow of approximately $1.625 billion

SiriusXMs stock got a slight bump. On October 30, the day before the earnings report, SiriusXM (SIRI) stock was valued at $6.47 per share. As of 7:12 p.m. EDT on November 1, SiriusXM stock was valued at $6.82.

SiriusXM Saw Serious Revenue Growth of 37 Percent in Third Quarter

Source: Google

Insider Take:

SiriusXM posted strong third quarter results with significant revenue growth and with subscriber increases for both SiriusXM and Pandora. This is an interesting partnership/acquisition but SiriusXM seems to be making the most of it with Pandora bring revenue and gross profits to the table. With SiriusXMs resources, Pandora may finally have a chance to maximize its potential while SiriusXM reaps the rewards. It looks like SiriusXM is expecting a strong finish to the year too.