money-dollar-signSiriusXM had its first ever quarter with greater than $1 billion  in revenue, but at the same time missed street EPS estimates by a penny.  The equity is trading down early in the session.  The company also had record free cash flow and record Adjusted EBITDA growth.

The call itself was actually somewhat vanilla given the overhang of the situation with Liberty Media.  Since the initial excitement when the Liberty intentions were made, the equity has drifted down.  At this point, the lack of a deal may be worse than the uncertainty of what will happen.

SiriusXM turned in a good 2013, and there is a lot to look forward to in 2014.  The company is getting it right on most fronts, but a few numbers will bear closer scrutiny in the days ahead as analysts weigh the information.

  •  Adjusted EBITDA climbed by 41% year-over-year in the fourth quarter to a single quarter high of $326 million.  Adjusted EBITDA margin reached a record high of 32.5% in the quarter.
  • Total subscriber acquisition costs were $124 million in the fourth quarter, or just 12% of adjusted revenue, the lowest percentage in the Company's history.  The improvement in SAC was driven by lower subsidy rates per vehicle.  SAC per gross addition was $44, a record low, a decline of 19% versus the fourth quarter of 2012.
  • Self-pay subscriber net additions were 411,484 in the fourth quarter, resulting in an all-time high self-pay subscriber base of 21.1 million at year end, up 8% year-over-year.  Paid promotional subscribers declined from the third quarter by 434,240 as a major OEM shifted to unpaid trials during the period, resulting in the one-time decline.
  •  Total net subscriber additions for the full-year were 1,658,974, taking total paid subscribers to 25.6 million at year-end, up 7% from 23.9 million subscribers at year-end 2012.
  •  Adjusted EBITDA grew by 27% to a record high of $1.17 billion.  The growth in adjusted EBITDA was attributable to a 12% increase in revenue, while cash operating expenses were held to a 6% increase.
  • Free cash flow grew to $927 million in 2013, a 31% rise from $709 million in 2012.  Free cash flow per diluted common share grew by 41% to $0.15 in 2013 from $0.10 in 2012 as the Company reduced its shares outstanding through its common stock repurchase program.
  • ARPU for the quarter was an impressive $12.46
  • The conversion rate dropped to 42% in the quarter.  This is very much on the low end of what we want to see.
  • Churn was a stable 1.9%

Guidance remains the same:

  • Revenue of over $4 billion,
  • Net subscriber additions of approximately 1.25 million,
  • Adjusted EBITDA of approximately $1.38 billion, and
  • Free cash flow approaching $1.1 billion.