Sirius XM (SIRI) Misses Q2 EPS by 1c, Revenues Miss

July 30, 2020 7:08 AM EDT

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Sirius XM (NASDAQ: SIRI) reported Q2 EPS of $0.05, $0.01 worse than the analyst estimate of $0.06. Revenue for the quarter came in at $1.87 billion versus the consensus estimate of $1.89 billion.

"Sirius XM's business during this challenging period has been resilient, and with improving results and visibility into the remainder of the year, I'm pleased to resume offering subscriber and financial guidance. Despite the incredible economic stresses brought about by the COVID-19 pandemic, our self-pay net subscriber additions grew by nearly 200,000 over the first quarter of the year, and we reported improved churn of just 1.6% per month with rising ARPU. Although advertising revenue fell 34% in the quarter, substantial expense savings in SAC and other areas provided a complete offset, and we generated over half a billion dollars of free cash flow. We are investing in our business, our people, and external opportunities to position ourselves for future growth," said Jim Meyer, Chief Executive Officer, Sirius XM.

"Our ongoing success highlights the strengths of our business model but also the talent, dedication and innovation of employees across our organization. We simply haven't skipped a beat. We have announced that an array of new automakers will be deploying our 360L radios starting later this year. We are optimizing our customer service operations with new tools and techniques, and we ramped up new streaming-centric and on-demand programming with the unprecedented help of artists and other media providers. We've brought on new stellar talent like Gayle King, and our artist friends such as Bruce Springsteen are doing new programming that entertains but also addresses the current times. We opened up our SiriusXM service for free during a time when people needed news, information and entertainment and we saw millions of new listeners take advantage of it. And earlier this month, we debuted new channels from stars such as the Beastie Boys, Bob Marley, Coldplay, Queen, and comedian Jim Gaffigan – not to mention U2, which debuted with deep involvement from the members of the band," added Meyer.

Additional information about our business, results of operations and the evolving impact of the COVID-19 pandemic on our business and operations is included below under "SPECIAL NOTE ON COVID-19 RESPONSE." Additional information," regarding the impact of the COVID-19 pandemic on our business and operations is contained in our Quarterly Report on Form 10-Q, which will be filed with the Securities and Exchange Commission.

"We resumed share repurchases following our April earnings call, buying 29 million shares for $165 million in the second quarter. With $58 million of dividends paid, total capital returns for the second quarter were $223 million. In June, we issued $1.5 billion of new 4.125% Senior Notes due 2030, and in July we completed the redemption of a similar principal amount of our 4.625% Senior Notes due 2023 and 5.375% Senior Notes due 2025. At the end of the second quarter, our net debt to trailing 12 month adjusted EBITDA ratio was 3.0x, our $1.75 billion revolving credit facility was completely undrawn and fully available, and we retain ample liquidity to continue investing in the business," said David Frear, Chief Financial Officer, Sirius XM.

"Sirius XM has also been active acquiring and investing in complementary businesses, with $428 million of capital committed to acquire Simplecast and Stitcher and for a minority investment in Soundcloud. The Stitcher transaction, announced earlier this month, will substantially advance Sirius XM's position in podcasting, the fastest growing sector in audio entertainment. We are now poised to offer audio publishers content hosting, data analytics, ad insertion and sales representation services through programmatic and direct sales. We are excited to offer advertisers an attractive path for audience-based buys, including to over 150 million North American listeners across our platforms," added Frear.

2020 GUIDANCE

The Company's new full-year 2020 guidance for self-pay net subscriber additions, revenue, adjusted EBITDA and free cash flow are as follows:

Sirius XM self-pay net subscriber additions of approximately 500,000, Total revenue of approximately $7.7 billion, Adjusted EBITDA of approximately $2.4 billion, and Free cash flow approaching $1.6 billion.

For earnings history and earnings-related data on Sirius XM (SIRI) click here.



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