SiriusXM reported quarterly earnings today and for the most part the company met expectations and there was little surprise in the numbers delivered. The first quarter of 2014 started off with revenue of $998 million and earnings per diluted share 0f $0.02. Net income was $94 million, and Adjusted EBITDA reached a record of $335 million.
"SiriusXM performed ahead of our expectations in the first quarter, with 266,799 net subscriber additions including 173,480 self-pay net additions. For the ninth consecutive quarter we grew revenue at a double digit pace, and once again we set a new quarterly record for adjusted EBITDA and adjusted EBITDA margin. Free cash flow grew 56% compared to the prior year to a new first quarter record, and we resumed our stock repurchase program, helping to drive free cash flow per share up 64%," stated Jim Meyer, Chief Executive Officer, SiriusXM."
Additional highlights of the first quarter include:
- Subscribers Reach a Record 25.8 Million. Net subscriber additions in the first quarter of 2014 were 266,799. The total paid subscriber base reached a record 25.8 million, up 6% from the prior-year period. Self-pay net subscriber additions were 173,480, while the self-pay subscriber base reached a record high of 21.3 million, up 7% from the prior-year period. Total paid and unpaid trials were 6.9 million at the end of the first quarter of 2014.
- Adjusted EBITDA and Adjusted EBITDA Margin Reach New Record Highs. Adjusted EBITDA climbed 28% from the first quarter of 2013 to a record quarterly figure of $335 million, and the Company's adjusted EBITDA margin reached a record 33.5% in the first quarter of 2014.
- Free Cash Flow Per Share Climbs 64%. Free cash flow in the first quarter of 2014 was $223 million, up 56% from $142 million in the first quarter of 2013. Free cash flow per diluted share was 3.6 cents in the first quarter of 2014, up 64% from 2.2 cents in the first quarter of 2013.
"The company disclosed that on April 25th it will repurchase 93 million shares from Liberty Media for $340 million (the purchase is for the agreed upon $3.65 per share). Subsequent to this purchase, the company will have bought back 158 million shares for a total of $550 million (average price per repurchased share is $3.48). The company will have $1.7 billion remaining under its share repurchase authorization.
SiriusXM also reiterated guidance:
- Net subscriber additions of approximately 1.25 million,
- Revenue of over $4.0 billion,
- Adjusted EBITDA of approximately $1.38 billion, and
- Free cash flow approaching $1.1 billion.
A few items in the call were indeed interesting. SiriusXM changed the way in which it reports Subscriber Acquisition Costs (SAC). In the past the company reported the number per gross addition. They now report SAC for "per installation." The company used to give gross subscriber additions and now no longer does.
Overall, the quarter was decent and demonstrated that the company is headed in the right direction to meet its guidance. The process may be slower than some have wanted to see, but it would appear that SiriusXM can get there safely.