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  Title	Sirius XM : SiriusXM Reports Third Quarter 2024 Operating and Financial Results Form 8 K
  ID	3820024
  External ID	7263636988
  Author	Unknown
  Published Date	Oct. 31, 2024, 7:02 a.m.
  Summary	October 31, 2024 at 07:59 am EDT SiriusXM Reports Third Quarter 2024 Operating and Financial Results •Total Revenue of $2.17 Billion •Net Loss of $2.96 Billion, the Product of Non-Cash Impairment C
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  Content	October 31, 2024 at 07:59 am EDT SiriusXM Reports Third Quarter 2024 Operating and Financial Results •Total Revenue of $2.17 Billion •Net Loss of $2.96 Billion, the Product of Non-Cash Impairment Charge Associated with Liberty Media Transaction •Adjusted EBITDA of $693 Million, a 32% Margin •Free Cash Flow of $93 Million, Impacted by Transaction-Related Expenses •SiriusXM Self-Pay Net Subscriber Additions of 14,000 in the Third Quarter •SiriusXM Reduces Full-Year 2024 Revenue Guidance; Reaffirms Adjusted EBITDA and Free Cash Flow Guidance NEW YORK - October 31, 2024 - SiriusXM today announced its third quarter 2024 financial results, reporting total revenue of $2.17 billion, a 4% decline compared to the same period in 2023. The company reported a net loss of $2.96 billion. Prior to the close of the transaction, Liberty completed an assessment of the fair value of the company's goodwill based on a sustained lower share price, as SiriusXM's share price converged with those of the Liberty tracking stocks heading into the closing. As a result, a non-cash impairment charge of approximately $3.36 billion was recorded. This non-cash charge does not impact the company's cash flow, ongoing operations, or liquidity. Earnings per common diluted share were ($8.74) for the third quarter of 2024, compared to $0.82 in the third quarter of 2023. SiriusXM reported adjusted EBITDA of $693 million, representing a 7% decline year-over-year. This decrease in adjusted EBITDA was mainly due to lower subscriber revenue, partially offset by lower costs of services, personnel-related costs, and general and administrative expenses. The company maintained a relatively stable adjusted EBITDA margin of 32%. "We made significant progress during the third quarter in transforming SiriusXM, highlighted by the completion of our transaction with Liberty Media. We are leveraging the strengths of our scaled audiences and strong business model to position for long-term growth and create value for our investors," said Jennifer Witz, Chief Executive Officer. "With a clear path forward that taps into both our subscription and advertising expertise, combined with our unique position in the media and entertainment industry, we are well-positioned to deliver the audio experiences audiences crave through an innovative platform with an expanded set of packages." "This quarter marked a significant milestone for SiriusXM as we completed our transition to an independent company. We are focused on executing our long-term strategy of strengthening our subscription business, enhancing our advertising offerings, and optimizing costs as we reinvest in the business. We saw promising growth in self-pay subscribers, with 14,000 net additions, and a 6% increase in podcast advertising revenue, which highlights the potential for further expansion. Adjusted EBITDA for the quarter came in at $693 million with a strong margin of 32%, underscoring our disciplined financial management," said Tom Barry, Chief Financial Officer. "We are adjusting full-year revenue guidance to $8.675 billion due to softer second-half ad revenue but remain on track to generate approximately $2.7 billion in adjusted EBITDA and $1 billion in free cash flow in 2024." 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, 2024. The financial highlights below exclude the impact of share-based payment expense. SiriusXM Third Quarter 2024 Segment Highlights SiriusXM Total Subscribers of 33 Million SiriusXM added approximately 14,000 self-pay subscribers in the third quarter of 2024, reflecting a year-over-year improvement primarily driven by lower churn. Paid promotional subscribers decreased by 114,000 as certain automakers transitioned to unpaid or shorter-term paid promotional plans. Self-pay subscriber churn finished the 2024 quarter at 1.6%, consistent with the third quarter of 2023. The SiriusXM trial funnel stood at approximately 7.3 million at the end of the third quarter of 2024, down slightly from 7.4 million at the end of the second quarter of 2024 and 7.5 million in the third quarter of 2023. SiriusXM Revenue of $1.6 Billion SiriusXM reported total revenue of$1.6 billion for the third quarter of 2024, a 5% decline year-over-year. This decrease was primarily driven by a smaller average base of self-pay subscribers and a $0.53 drop in average revenue per user (ARPU), bringing ARPU to $15.16. The decline in ARPU resulted from a higher proportion of subscribers on self-pay promotional and streaming-only plans. SiriusXM Gross Profit of $969 Million and Gross Margin of 60% Total cost of services at SiriusXM decreased by 2% to $658 million for the third quarter of 2024 compared to the corresponding quarter in 2023. Gross profit at SiriusXM totaled $969 million, a decrease of 7% compared to the 2023 period, producing a gross margin of 60%, one percentage point lower than the prior year period. Business and Programming Highlights In the third quarter, SiriusXM continued to innovate across its content, technology, and pricing strategies. In podcasting, the company kicked off its agreement with SmartLess Media and signed a new deal with Unwell, home of the popular "Call Her Daddy" podcast with Alex Cooper. These moves strengthen the company's advertising offerings and create new, exclusive programming within its subscription service. To further enhance the podcast experience, SiriusXM also rolled out in-app improvements aimed at increasing on-demand listenership. With both the election cycle and football season kicking into high gear, SiriusXM expanded its political and sports content, adding high-profile sports commentators like former coaches Jimbo Fisher and Bill Belichick, along with new political shows from former UN Ambassador Nikki Haley and rising Gen Z voice Dylan Douglas. This diverse lineup appeals to a broad audience and highlights the power of live and timely audio on SiriusXM. During the third quarter, SiriusXM introduced a new seamless app download feature for in-car subscribers, enabling them to easily sign in to and use the streaming app to access even more content wherever they go. The company also unveiled a new approach for automakers to present SiriusXM to their customers, allowing multiple brands including Toyota to offer a three-year SiriusXM subscription with the purchase of select new vehicles, delivering added value to new car dealers and buyers. Pandora and Off-Platform Third Quarter 2024 Segment Highlights Pandora and Off-Platform Self-Pay Subscribers of 5.9 Million Self-pay subscribers of the Pandora Plus and Pandora Premium services decreased by 76,000 during the third quarter of 2024 to end the period at 5.9 million. The decrease was driven by a decline in trial starts and lower retention due to price increases on certain self-pay plans. Pandora and Off-Platform Revenue of $544 Million Pandora and Off-Platform revenue totaled $544 million in the third quarter of 2024, a decrease of 1%, or $6 million, from $550 million in the same period of 2023. Advertising revenue in the segment reached $409 million, reflecting a 2% decline from the $418million recorded in the prior year period and a 2% increase compared to the second quarter of 2024. Subscriber revenue reached $135 million in the 2024 third quarter, a 2% year-over-year increase. Pandora and Off-Platform Gross Profit of $187 Million Total cost of services were $357 million in the third quarter of 2024, a 4% decrease compared to $370 million in the same period of 2023. This led to a gross profit of $187 million for the Pandora and Off-Platform segment in the third quarter of 2024, a 4% increase from the previous year, resulting in a gross margin of 34%, up by 1 percentage point from the prior year period. ADDITIONAL FINANCIAL HIGHLIGHTS Subscriber acquisition costs increased to $90 million in the third quarter of 2024 up from $87 million in the corresponding 2023 quarter. Sales and marketing expenses dropped 8% to $206 million, down from $224 million in the same period in 2023. Engineering, design, and development costs fell 7% in the third quarter of 2024 to $57 million, while general and administrative expenses decreased 5% in the quarter to $113million. The company remains on track to achieve $200 million in cost savings for the full year 2024 through continued optimization and consolidation efforts. Following the close of the Liberty transaction, the company revised its guidance for free cash flow to approximately $1 billion. This adjustment incorporates an additional $215 million in full year transaction-related cash costs, which includes transaction fees, legacy Liberty Sirius XM operating and interest expenses, and post-close interest costs. Of this amount, approximately $180 million had been paid by September 30, 2024, with an additional $35 million expected to be paid in the fourth quarter of 2024. In the third quarter of 2024, SiriusXM generated $93 million in free cash flow, a decline from the prior year, driven by approximately $72 million in Liberty Media transaction-related costs, lower cash receipts, higher programming payments, and higher capital expenditures. These factors were partially offset by reduced cash taxes. 2024 FULL-YEAR FINANCIAL GUIDANCE The company reduced its full-year 2024 guidance for revenue, and reiterated its guidance for adjusted EBITDA, and free cash flow as follows: • Total revenue of approximately $8.675 billion, • Adjusted EBITDA of approximately $2.7 billion, and • Free cash flow of approximately $1 billion. THIRD QUARTER 2024 RESULTS SIRIUS XM HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SIRIUS XM HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (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. Unaudited Results Set forth below are our results of operations for the three and nine months ended September 30, 2024 compared with the three and nine months ended September 30, 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. nm - not meaningful (1) Allocation of share-based payment expense: 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, 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 the Cloud Cover music programming service are now included in Pandora's subscriber count. Set forth below are our subscriber balances as of September 30, 2024 compared to September 30, 2023: (1) Pandora Self-pay subscribers includes Cloud Cover subscribers of 55 and 43 as of September 30, 2024 and 2023, respectively. 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, 2024 and 2023: nm - not meaningful (1) ARPU for Sirius XM excludes subscriber revenue from our connected vehicle services of $41 and $39 for the three months ended September 30, 2024 and 2023, respectively, and $122 and $121 for the nine months ended September 30, 2024 and 2023, respectively. (2) Pandora and Off-platform self-pay subscriber net additions includes Cloud Cover net additions of 3 and 2 for the three months ended September 30, 2024 and 2023, respectively, and 10 and 6 for the nine months ended September 30, 2024 and 2023, respectively. Reconciliation from GAAP Net income to Non-GAAP Adjusted EBITDA: Reconciliation of Free Cash Flow: Reconciliation of SAC, per installation: (a) Amounts may not recalculate due to rounding. About Sirius XM Holdings Inc SiriusXM is the leading audio entertainment company in North America with a portfolio of audio businesses including its flagship subscription entertainment service SiriusXM; the ad-supported and premium music streaming services of Pandora; an expansive podcast network; and a suite of business and advertising solutions. Reaching a combined monthly audience of approximately 150 million listeners, SiriusXM offers a broad range of content for listeners everywhere they tune in with a diverse mix of live, on-demand, and curated programming across music, talk, news, and sports. 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: Risks Relating to our Business and Operations: 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 are migrating our billing system and payment processing function to a new service provider; failure to successfully monetize and generate revenues from podcasts and other non-music content could adversely affect our business, operating results, and financial condition; we may not realize the benefits of acquisitions or other strategic investments and initiatives; the impact of economic conditions may adversely affect our business, operating results, and financial condition; and we may be adversely affected by the war in Ukraine. Risks Relating to our Sirius XM 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 is uncertain; our business depends in part upon the auto industry; failure of our satellites would significantly damage our business; and our Sirius XM service may experience harmful interference from wireless operations. Risks Relating to our Pandora and Off-platform Business: Our Pandora ad-supported business has suffered a substantial and consistent loss of monthly active users, which may adversely affect our Pandora and Off-platform business; our Pandora and Off-platform business generates a significant portion of its revenues from advertising, and reduced spending by advertisers could harm our 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 to mobile operating systems and browsers may hinder our ability to sell advertising and market our services; and 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. Risks Relating to Laws and Governmental Regulations: 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; environmental, social and governance expectations and related reporting obligations may expose us to potential liabilities, increased costs, reputational harm, and other adverse effects; and we may face lawsuits, incur liability or suffer reputational harm as a result of content published or made available through our services. Risks Associated with Data and Cybersecurity and the Protection of Consumer Information: 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; we use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability and adversely affect our results of operations; and interruption or failure of our information technology and communications systems could impair the delivery of our service and harm our business. Risks Associated with Certain Intellectual Property Rights: 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; 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; and rapid technological and industry changes and new entrants could adversely impact our services. Other Operational Risks: 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. Risks Related to the Transactions: We may have a significant indemnity obligation to Liberty Media, which is not limited in amount or subject to any cap, if the transactions associated with the Split-Off are treated as a taxable transaction; we may determine to forgo certain transactions that might otherwise be advantageous in order to avoid the risk of incurring significant tax-related liabilities; we may not realize the potential benefits from the Transactions in the near term or at all; we have assumed and are responsible for all of the liabilities attributed to the Liberty SiriusXM Group as a result of the completion of the Transactions, and acquired the assets of SplitCo on an "as is, where is" basis; we may be a target of securities class action and derivative lawsuits in connection with the Transactions; it may be difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders; we have overlapping directors with Liberty Media, which may lead to conflicting interests; our directors and officers are protected from liability for a broad range of actions; our holding company structure could restrict access to funds of its subsidiaries that may be needed to pay third party obligations; on a standalone basis and on a consolidated basis, we have significant indebtedness, and our subsidiaries' debt contains certain covenants that restrict its operations; and our ability to incur additional indebtedness to fund our operations could be limited, which could negatively impact its operations. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in the prospectus filed with the Securities and Exchange Commission (the "SEC") on July 23, 2024, which forms part of Liberty Sirius XM Holdings Inc.'s Registration Statement on Form S-4 (File No. 333-276758) 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 Hooper.Stevens@siriusxm.com Natalie Diana Candela Natalie.Candela@siriusxm.com Media contact: Maggie Mitchell Maggie.Mitchell@siriusxm.com Attachments Original document Permalink Disclaimer Sirius XM Holdings Inc. published this content on October 31, 2024 , and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 31, 2024 at
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