Subscription Company Round-up of Third Quarter Financials

Quarterly financial results are in, and while we can’t cover every subscription company, we like to highlight those we’ve written about before. With the

The end of each quarter is a busy time for subscription companies to report their financials. We try to focus on the larger companies, but we also like providing updates on companies we’ve written about in the past. Here are how some of those companies are performing financially:

Subscription Company Round-up of Third Quarter Financials

Source: MINDBODY

MINDBODY, Inc. (NASDAQ: MB)

MINDBODY, Inc., the leading provider of cloud-based business management software for the wellness services industry, reported their third quarter financials last week. Highlights include subscription and services revenue of $21.2 million, a 33 percent increase compared to the same period last year.

Payments revenue was $13.5 million, a 41 percent increase year-over-year. Total revenue was $35.3 million, representing a 35 percent increase year over year. Overall, however, the company reported a GAAP net loss of $5.9 million for the third quarter or a loss of $0.15 per share, an improvement over prior year losses of $9.6 million and $0.25 per share, respectively.

Though the company reported an overall loss, MINDBODY added 2,795 new subscribers during the third quarter, bringing total subscribers to 58,566 worldwide. This represents a 20 percent increase year-over-year. Average monthly revenue per subscriber (ARPS) was $204, a 12 percent increase year-over-year. The company also completed the acquisition of Austin-based HealCode, one of its technology partners. This acquisition adds new customer engagement and marketing tools to MINDBODY’s suite of business and consumer solutions.

“We are pleased with our execution this quarter, highlighted by 35% year over year revenue growth and strong subscriber growth while continuing to improve margins,” said Brett White, Chief Operating Officer and Chief Financial Officer. “We continue to have a huge opportunity in front of us as we expand our leadership position in the wellness services industry.”

For the fourth quarter, MINDBODY projects revenue between $37.7 million and $38.7 million, or 33 percent to 37 percent growth year-over-year. The company is expecting a non-GAAP net loss between $2.5 million and $3.5 million.

Subscription Company Round-up of Third Quarter Financials

Starz (NASDAQ: STRZA, STRZB)

Starz Networks reported some forward momentum during the third quarter, including revenue of $348.6 million, a 6 percent increase year-over-year, and the largest increase since the second quarter of 2013. Starz subscriptions increased by 1.2 million year-over-year, bringing the total number of subscriptions to a new high of 24.5 million. This subscription growth was driven by Starz new partnership with Amazon Prime and Starz OTT app, bringing in nearly a million subscriptions alone. Combined subscriptions for Starz and Starz Encore are now at 56.0 million.

The news was not all good, however. Operating income decreased by 28 percent to $74 million because of increased spending on programming and advertising, reports Motley Fool. The company’s operating margin dropped to 18 percent compared to 25 percent for the same period last year. Net income was $34 million, a 43 percent decrease compared to net income of $60 million year-over-year. Earnings per share was $0.34, compared to $0.57 year-over-year, a 40 percent drop.

From an operations perspective, there is a planned merger with Lionsgate which will allow the combined companies to offer more content. This merger, however, is driving the company’s operating loss of $3.9 million for the quarter. The third season of “Power” had record viewership for Starz, surpassing 7.3 million multiplatform viewers per episode and contributing to the nearly 1 million new subscribers to the Starz OTT platform. “Survivor’s Remorse” has been renewed for a fourth season with viewership growth of 53 percent since the series premiere.

Subscription Company Round-up of Third Quarter Financials

Source: SiriusXM

SiriusXM (NASDAQ: SIRI)

Satellite radio SiriusXM has been in the news lately, first, with a lawsuit about misleading lifetime subscriptions, and second, as the company began promoting its six-month streaming music subscription plan. This time we’re covering their third quarter financials. The company had record quarterly revenue of $1.3 billion, a 9 percent increase year-over-year. Net income also rose 16 percent to $194 million, and net income per diluted common share rose by $0.01 to $0.04.

Operationally speaking, SiriusXM announced a quarterly dividend payment of $0.01 per share of common stock for an aggregate annual amount of $0.04 per share. The board of directors approved an additional $2 billion of stock repurchases, bringing its total repurchase authorization to $10 billion. The company grew self-pay subscribers by 385,000, bringing the total self-pay subscribers to 25.5 million. The company also added 345,000 net new subscribers, bringing the total number of subscribers to about 31 million.

“We remain dedicated to bringing the best audio entertainment in an easy to use bundle of programming to a nation of listeners. In recent months, we’ve strengthened areas where we are leaders, such as country music, added new talent in talk programming, and held special, one-of-a kind live music events for subscribers and listeners nationwide, all content you can only find at SiriusXM,” said SiriusXM CEO Jim Meyer.

The company adjusted its full-year guidance as follows: full-year 2016 revenue will be approximately $5 billion, net self-pay subscriber additions of 1.6 million, and total net subscriber additions of 1.7 million.

Subscription Company Round-up of Third Quarter Financials

Source: WWE

WWE (NYSE: WWE)

World Wrestling Entertainment, Inc. (WWE) reported its third quarter financials as well. WWE owns the WWE Network, a subscription-based OTT TV service. Financial and operational highlights include:

  • Revenue of $164.2 million, down $2 million year-over-year. Year-to-date revenue, however, grew 8 percent to $534.3 million.
  • WWE had net income of $11.1 million, or $0.14 per diluted share, compared to $10.4 million, also $0.14 per diluted share, year-over-year.
  • WWE Network subscribers increased 24 percent to 1.46 million average paid subscribers.
  • WWE Network’s Net Promoter Score ranked second among major U.S. OTT services, only behind Netflix. Hulu and MLB.TV ranked third and fourth, respectively.
  • Digital engagement continued to grow with video views increasing by 71 percent to 11.5 billion and social media engagement up by 43 percent to 873 million, compared to the prior year.

“During the quarter, we continued to effectively execute our content strategy, which has resulted in record revenues to-date in 2016 and increased consumption across our media platforms,” said WWE Chairman & CEO Vince McMahon. “This growth illustrates meaningful progress against our long-term strategic plan and provides the foundation for achieving our 2017 financial objectives.”

For the fourth quarter of 2016, WWE projects adjusted OIBDA between $20 million and $24 million and operating income of $12 million to $16 million. The company expects subscribers to decline approximately 4 percent compared to the third quarter of 2016, but still 13 percent compared to the fourth quarter of 2015. In 2017, WWE Network expects to continue growing its subscriber base but at a slower rate.

 

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