SiriusXM Earnings: Revenue Increases, 355,000 Additional Subs

• Second Quarter Net Income of $433 Million; Diluted EPS of $0.10
• Record Quarterly Adjusted EBITDA of $700 Million, Up 14% From Prior Year Period
• SiriusXM Self-Pay Net Subscriber Additions of 355,000, an Increase of 34% YOY

SiriusXM today announced second quarter 2021 operating and financial results, including revenue of $2.16 billion, an increase of 15% compared to the prior year period. The company recorded net income of $433 million in the second quarter of 2021, compared to $243 million in the prior year period. Second quarter 2021 net income included $140 million in insurance recoveries related to the company's SXM-7 satellite. Net income per diluted common share was $0.10 in the second quarter 2021, compared to $0.05 in the prior year period.

Adjusted EBITDA in the second quarter was $700 million, up 14% from $615 million in the prior year period.

"SiriusXM added an impressive 355,000 net new self-pay subscribers in the quarter, putting us on track to add 1.1 million self-pay subscribers this year – our best since 2018 – and we are increasing all of our financial guidance. The quarter was bolstered by record self-pay churn of just 1.5%, and we achieved strong monetization in our advertising business, with an increase in ad revenue of 82% from the prior year period and 20% from the second quarter of 2019," said Jennifer Witz, Chief Executive Officer of SiriusXM.

Jennifer Witz

"We have long been the leader in shaping the future of audio for listeners, and we continue doing so by providing curated and premium content in innovative formats. Earlier this month, we announced a new daily radio show hosted by Megyn Kelly which will air exclusively from noon to two on SiriusXM beginning on September 7th. In addition, video of the best moments from the show will be available in our app to subscribers and a podcast version of the show will be distributed broadly on SiriusXM, Pandora, Stitcher and other major platforms. We brought on Roman Mars and his podcast team at 99% Invisible and announced Seth Rogen would do his first ever podcast with us starting in the fall. Our collaboration with TikTok is now live with Pandora playlists from the most dynamic creators on this massive social platform, and a new SiriusXM channel powered by TikTok is coming soon," added Witz.

SIRIUSXM SEGMENT
Self-Pay Subscribers Reach a Record-High 31.4 Million. SiriusXM added 355,000 net new self-pay subscribers in the second quarter, a 34% increase from the 264,000 added in the second quarter of 2020. Paid promotional subscribers decreased by 378,000. Continuing impacts of a new vehicle trial structure with certain automakers, and to a lesser extent, lower vehicle shipments due to silicon supply constraints, contributed to negative paid promotional net additions during the quarter. Total subscribers at the end of the second quarter were 34.5 million, an increase of 1% from the prior year period. The total SiriusXM trial funnel stood at approximately 9.1 million at the end of the second quarter, up from approximately 8.7 million at the end of the first quarter 2021, on record trial starts in the second quarter of 2021. Self-pay monthly churn for the second quarter improved to 1.5% from 1.6% in the second quarter of 2020.

SiriusXM Revenue Increased 7% to $1.64 Billion. Second quarter 2021 revenue grew 7% to $1.64 billion. This growth was driven by a 4% increase in SiriusXM's average revenue per user (ARPU) to $14.57 and a 3% increase in SiriusXM self-pay subscribers.

Gross Profit Increased 5% to $996 Million. Total cost of services at SiriusXM increased by 9% to $647 million in the second quarter of 2021. Gross profit at SiriusXM totaled $996 million, an increase of 5% compared to the second quarter of 2020, producing a gross margin of 61%, a 1 point decrease from the prior-year period.

PANDORA SEGMENT
Advertising Revenue Increased 82% to $383 Million. Second quarter ad revenue at Pandora, which includes off-platform results such as the company's AdsWizz business, increased by 82% year-over-year to $383 million and by 25% compared to second quarter 2019. Ad revenue was boosted by strong monetization of $100.35 per thousand hours at Pandora, compared to $55.23 from the prior year period. Ad revenue also benefited from the acquisition of Stitcher in the fourth quarter of 2020.

Stitcher and Off-Platform Performance. In the second quarter of 2021, Stitcher and the company's off-platform advertising businesses recorded $78 million in revenue. Off-platform revenue, excluding Stitcher, increased approximately $22 million or 79% compared to the second quarter of 2020. Stitcher recently launched "Precedent," an audio series podcast that explores the evolution of the criminal justice system featuring Ashley Flowers, the host of the popular "Crime Junkie" podcast. Stitcher also launched "Toxic: The Britney Spears Story," the newest podcast from its Witness Docs unit. In addition, Seth Rogen will launch an original podcast series of personal stories on Stitcher later this year.

Total Advertising-Supported Listener Hours of 3.03 Billion. Monthly Active Users (MAUs) at Pandora were 55.1 million in the second quarter of 2021, down from 59.6 million in the prior year period. Total ad-supported listener hours were 3.03 billion in the period, down from 3.29 billion in the second quarter of 2020.

Self-Pay Net Adds of 118,000. Pandora added 118,000 net new self-pay subscribers to its Pandora Plus and Pandora Premium services in the second quarter 2021 to end the period with 6.5 million self-pay subscribers to those services.

Gross Profit Grew 176%. Subscriber revenue increased by 6%, advertising revenue increased by 82% and total cost of services increased by 21% during the second quarter of 2021. This resulted in gross profit at Pandora of $193 million, up 176% over the second quarter of 2020 or 23% compared to the second quarter of 2019, and produced a gross margin for the quarter of 37%, a 16 point increase from the prior year period.