Sirius XM Holdings Inc (SIRI)

[MCArmel1]

Sirius XM EPS and revenue in-line

Jul 28 2015, 07:03 ET | About: Sirius XM Holdings Inc. (SIRI) | By: Niloofer Shaikh, SA News Editor

Sirius XM (NASDAQ:SIRI): Q2 EPS of $0.03 in-line.
Revenue of $1.12B (+7.7% Y/Y) in-line.
Press Release

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SiriusXM Reports Second Quarter 2015 Results and Increases Guidance
Tue July 28, 2015 7:00 AM|PR Newswire | About: SIRI

NEW YORK, July 28, 2015 /PRNewswire/ --
•Self-pay Net Additions Increase 37% to 519,000
•Record Second Quarter Revenue up 8% to $1.12 Billion
•Net Income of $103 Million, Including a Pre-tax $108 Million Settlement
•Adjusted EBITDA Climbs 12% to a Record $415 Million
•Free Cash Flow Reaches $371 Million, up 11%
•GAAP EPS of $0.02; Adjusted EPS of $0.03, Excluding Settlement

SiriusXM today announced second quarter 2015 operating and financial results, including record second quarter revenue of $1.12 billion, up 8% versus the second quarter of 2014.
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Net income in the second quarter of 2015 was $103 million, including a pre-tax $108 million charge to settle certain royalty litigation, versus $120 million in the second quarter of 2014. Net income per diluted common share was $0.02 in the second quarter of 2015 and 2014. Adjusted EBITDA was $415 million in the second quarter of 2015, up 12% from $370 million in the second quarter of 2014.

Adjusted net income was $170 million in the second quarter of 2015, up 29% from $131 million in the second quarter of 2014. Adjusted net income per diluted common share was $0.03 in the second quarter of 2015 compared to $0.02 in the second quarter of 2014. Adjusted net income excludes the impact of the settlement of certain royalty litigation during the second quarter of 2015.

"After another quarter of exceptional execution and subscriber growth, we are increasing our subscriber guidance for the second time this year to approximately 1.8 million net additions. We are also increasing guidance for revenue, adjusted EBITDA and free cash flow. Self-pay net additions of 519,000 were the strongest second quarter result since 2007, and our quarterly self-pay churn rate of 1.6% was outstanding. The economy continues to get stronger, our execution has never been better, and demand for our differentiated content bundle remains very high," said Jim Meyer, Chief Executive Officer, SiriusXM.

"We are focused on delivering the best, most compelling and most entertaining audio content available. Listeners are attracted to our diverse and exclusive content, such as our broadcasts of the Grateful Dead's historic concerts in Chicago, our two live exclusive subscriber concerts by Pitbull and James Taylor, and broadcasts of leading music festivals including Coachella, Bonnaroo, and The Electric Daisy Carnival. This fall we will bring our subscribers an exclusive channel created with the talented Andy Cohen, and launch our new exclusive 24/7 original headline news channel with FOX News," added Meyer.

SECOND QUARTER 2015 HIGHLIGHTS
•Strong subscriber growth continues. SiriusXM added 692,000 net new subscribers in the second quarter, a 46% increase from the 475,000 net new subscribers added in the second quarter of 2014. Self-pay net subscriber additions were 519,000 in the second quarter of 2015 compared to 380,000 in the second quarter of 2014, which made it the largest second quarter for self-pay subscriber growth since 2007. Total paid subscribers reached 28.4 million, and self-pay subscribers reached 23.4 million, both record highs.
•Record-low post-merger churn rate of 1.6%. The self-pay churn rate of 1.6% in the second quarter was the best on record since Sirius and XM were combined in 2008, a decrease from 1.8% in the prior year period. This trend demonstrates the strong, sustainable demand for satellite radio.
•Second quarter adjusted EBITDA rises 12%. Adjusted EBITDA of $415 million in the second quarter of 2015 was the highest quarterly amount in the company's history, an increase of 12% over the $370 million reported in the second quarter of 2014. Adjusted EBITDA margin was 37%, equal to the record high margin set in the first quarter of 2015.
•Free cash flow per diluted share increases 25%. Free cash flow of $371 million was up 11% from $335 million in the second quarter of 2014. With increased cash flow and a lower share count from the company's share repurchase program, free cash flow per diluted share climbed 25% to 6.7 cents in the second quarter of 2015, up from 5.4 cents in the second quarter of 2014.
•Revolving credit facility increased to $1.75 billion and extended to 2020. In the second quarter the company amended its revolving credit facility, increasing it from $1.25 billion to $1.75 billion and extending its maturity from 2017 to 2020.
•Pre-72 litigation settlement. The company entered into an agreement to settle certain outstanding litigation relating to the use of recordings fixed prior to February 15, 1972. These plaintiffs have represented that they own or control approximately 80% of the pre-1972 recordings the company has historically used. Pursuant to the settlement, the company will pay the plaintiffs $210 million for past claims and the continued use of their recordings through 2017. As part of the settlement, the company has the right to enter into a license with each plaintiff to broadcast its pre-1972 recordings from 2018 through 2022. The royalty rate for each license will be determined by negotiation or, if necessary, binding arbitration.

"We repurchased 144 million shares for $560 million during the second quarter, and this year through yesterday we have repurchased 338 million shares for approximately $1.3 billion. Our growing free cash flow, low leverage and undrawn credit facility allow us to continue investing in growth, while providing flexibility to pursue strategic opportunities and return capital to shareholders," noted David Frear, Chief Financial Officer, SiriusXM.

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