Sirius XM(SIRI)2024-10-31 11:56Revenue and Financial Performance - Total revenue for Q3 2024 was $2.17 billion, a 4% decline compared to Q3 2023[1] - SiriusXM revenue declined 5% year-over-year to $1.6 billion, with ARPU dropping to $15.16[6] - Pandora and Off-Platform revenue decreased 1% to $544 million, with advertising revenue down 2% to $409 million[12] - Full-year 2024 revenue guidance adjusted to $8.675 billion, with adjusted EBITDA expected at $2.7 billion and free cash flow at $1 billion[17] - Total revenue for the three months ended September 30, 2024, decreased by 4% to $2.171 billion compared to $2.271 billion in 2023[23] - Sirius XM subscriber revenue declined by 5% to $1.510 billion for the three months ended September 30, 2024, from $1.597 billion in 2023[23] - Pandora and Off-platform subscriber revenue increased by 2% to $135 million for the three months ended September 30, 2024, from $132 million in 2023[23] Profitability and Margins - Adjusted EBITDA of $693 million, representing a 32% margin, a 7% decline year-over-year[2] - Pandora and Off-Platform gross profit increased 4% to $187 million, with a gross margin of 34%[13] - Adjusted EBITDA for the three months ended September 30, 2024, was $693 million, a 7% decrease from $747 million in 2023[23] - Sirius XM gross profit decreased by 7% to $969 million for the three months ended September 30, 2024, from $1.047 billion in 2023[23] - Pandora and Off-platform gross profit increased by 4% to $187 million for the three months ended September 30, 2024, from $180 million in 2023[23] - Total company Adjusted EBITDA decreased by $54 million (7%) to $693 million for the three months ended September 30, 2024[27] Subscriber Metrics - SiriusXM added 14,000 self-pay subscribers in Q3 2024, with self-pay churn at 1.6%[5] - Subscribers to the Cloud Cover music programming service are now included in Pandora's subscriber count[25] - Sirius XM self-pay subscribers decreased by 314,000 (1%) to 31,497,000 as of September 30, 2024[26] - Pandora and Off-platform monthly active users declined by 2,779,000 (6%) to 43,721,000 as of September 30, 2024[26] - Pandora and Off-platform self-pay subscribers decreased by 285,000 (5%) to 5,875,000 as of September 30, 2024[26] - Sirius XM Canada subscribers decreased by 102,000 (4%) to 2,559,000 as of September 30, 2024[26] Costs and Expenses - Total cost of services decreased by 3% to $1.015 billion for the three months ended September 30, 2024, from $1.044 billion in 2023[23] - Additions to property and equipment increased from $521 million in 2023 to $563 million in 2024[20] - Sirius XM SAC per installation increased by $2.21 (18%) to $14.67 for the three months ended September 30, 2024[27] - Total share-based payment expense for the three months ended September 30, 2024, was $58 million, compared to $57 million in 2023[24] Cash Flow and Liquidity - Cash and cash equivalents dropped from $306 million in December 2023 to $127 million in September 2024[19] - Net cash provided by operating activities decreased from $1,301 million in 2023 to $1,062 million in 2024[20] - Revolving credit facility borrowings rose from $1,670 million in 2023 to $1,841 million in 2024[20] - Total cash, cash equivalents, and restricted cash decreased from $335 million in 2023 to $135 million in 2024[21] - Free cash flow decreased by $165 million (64%) to $93 million for the three months ended September 30, 2024[27] - Total company net cash provided by operating activities decreased by $135 million to $309 million for the three months ended September 30, 2024[30] Impairments and Losses - Net loss of $2.96 billion due to a non-cash impairment charge of $3.36 billion related to the Liberty Media transaction[1] - Net income for the nine months ended September 30, 2024, was a loss of $2,362 million compared to a profit of $760 million in the same period in 2023[20] - Net loss for the three months ended September 30, 2024, was $2.958 billion, compared to a net income of $291 million in 2023[23] - Non-cash impairment and restructuring costs surged from $21 million in 2023 to $3,355 million in 2024[20] Assets and Liabilities - Total assets decreased from $30,056 million in December 2023 to $27,483 million in September 2024[19] - Goodwill decreased from $15,209 million in December 2023 to $12,390 million in September 2024[19] - Retained earnings dropped from $15,353 million in December 2023 to $10,889 million in September 2024[19] Operational and Strategic Initiatives - SiriusXM introduced new in-app features and a seamless app download for in-car subscribers to enhance user experience[10] - The company remains on track to achieve $200 million in cost savings for the full year 2024[14] - SiriusXM is migrating its billing system and payment processing function to a new service provider[32] - The company uses artificial intelligence in its business, with potential risks including reputational harm and legal liability[32] Market and Competitive Landscape - SiriusXM reaches a combined monthly audience of approximately 150 million listeners[32] - Pandora's ad-supported business has experienced a substantial and consistent loss of monthly active users[32] - The company faces significant competition, which is likely to increase over time[32] - SiriusXM relies on third parties for the operation of its business, and their failure could adversely affect operations[32] - The company may not realize the benefits of acquisitions or other strategic investments and initiatives[32] - SiriusXM's Pandora and Off-platform business generates a significant portion of its revenues from advertising[32] - SiriusXM has significant indebtedness, and its subsidiaries' debt contains certain covenants that restrict operations[32] - The company may face lawsuits, incur liability, or suffer reputational harm due to content published through its services[32]