SiriusXM Revenues and Earnings Rise, Despite Plunging Auto Sales and Advertising
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Sirius XM’s revenue and earnings rose more than expected in its first quarter, but the satellite-radio giant said it lost 143,000 net subscribers for the first quarter, while adding 69,000 self-paying ones.
The company reported a profit of $293 million, or 7 cents a share, compared to $162 million, or 3 cents a share, the same period last year. Revenue rose 12% to $1.95 billion, beating expectations by .02 billion. At the end of March it had more than 34.8 million subscribers, including more than 30 million self-pay users.
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Chief Executive Jim Meyer said he expects the company to “continue to generate substantial positive free cash flow” but withdrew its 2020 guidance. “Once we have a better view of how and when the economy will restart, we plan to resume providing guidance,” he said. “In the face of the economy hitting the brakes hard in March, SiriusXM’s first-quarter results were very strong,” Meyer added. “Auto sales, advertising and customer responses to marketing campaigns all fell swiftly in the second half of March.”
Adjusted EBITDA in the first quarter totaled $639 million, up 13% from $567 million in the prior year period, resulting in an adjusted EBITDA margin of 32.7%, an improvement of approximately 220 basis points from the 2019 period. The improvement in adjusted EBITDA margin was driven primarily by revenue growth across the business and reductions in subscriber acquisition costs, general and administrative costs and customer service and billing costs.
Its music-streaming service Pandora added 51,000 net self-pay subscribers and tallied more than 6.2 million at the end of March. Pandora ended March with 6.3 million sub.
Ad revenue at Pandora reached $241 million in the latest quarter, up 4 percent from the year-ago period and marking a first-quarter high.
The company said it expects the pandemic to “adversely affect our subscriber revenue due to the decline in sales of new and used vehicles, reduced drive time, increased churn and the inability of our vendors to fully staff call centers; cause a decline in advertising revenues in our Pandora and SiriusXM businesses as third parties pull back on advertising spending generally;” and “not significantly affect our programming and content expenses, as we expect to continue to honor our agreements to acquire, create, promote and produce content.”
SiriusXM and Stern on March 31 said North American listeners will have free access to “The Howard Stern Show” and other premium content through May 15 as consumers shelter at home amid the pandemic. Meyer said, “We are streaming SiriusXM for free, and we have been in overdrive introducing new shows, channels and special virtual moments. In conjunction with NYU Langone Health, we’ve launched a 24/7 COVID-19 focused channel and hotline, an important complement to our Doctor Radio channel.”
He added: “We welcomed the healthy return of Andy Cohen, Howard Stern interviewed Governor Andrew Cuomo, and SiriusXM contributed $2 million to COVID-19 response charities, with a near-term focus on New York, San Francisco, and Detroit – the homes of our two biggest employee bases and the primary community of our automakers.”
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