SiriusXM Reports Churn Is Down, Revenue Up

SiriusXM today announced first quarter 2022 operating and financial results, including revenue of $2.19 billion, an increase of 6%, compared to the prior year period.  The company recorded net income of $309 million in the first quarter 2022 compared to $219 million in the prior year.  Net income per diluted common share was $0.08 in the first quarter 2022 compared to $0.05 in the prior year period.

"SiriusXM delivered a record first quarter churn rate of just 1.6%, and we drove a 9% increase in average revenue per user to a new all-time high.  Overall, the first quarter marked a great start to the year, even as SiriusXM's near-term subscriber growth remains limited by supply constraints in the automotive industry.  We are making substantial investments to grow our advertising platform through new podcast agreements and to grow SiriusXM digital with enhanced brand and performance marketing.  In the first quarter, we returned $1.3 billion to our stockholders through regular and special dividends and common stock repurchases.  We remain on track to attain our full-year subscriber and financial guidance," said Jennifer Witz, Chief Executive Officer of SiriusXM.

Jennifer Witz

"Content will always power our strong listenership and sustained subscriber loyalty at SiriusXM, and this quarter we continued to expand our offering through new agreements with artists and creators.  We have announced multiple distribution and advertising sales agreements with top podcast brands such as Crooked Media, and several agreements include new content developed specifically for the SiriusXM platform.  We kept our content fresh by launching an array of new pop-up channels and resumed even more live performances with legendary artists," added Witz.

BUSINESS AND CONTENT UPDATE

New vehicle penetration at all-time high.  SiriusXM's hardware was incorporated into approximately 83% of new vehicles sold in the United States in the first quarter of 2022, up from approximately 81% in the first quarter of 2021.  SiriusXM's enabled fleet grew to nearly 146 million vehicles, up 9% from a year prior.

Podcast business continues to grow.  SXM Media, the company's combined advertising sales organization, continues to be a dominant force in podcast ad sales, ranking as the #1 podcast advertising network in weekly U.S. listener reach according to Edison Research.  SXM Media currently represents three of the top 15 podcasts in the country according to Edison Research, including Crime Junkie, Office Ladies, Dateline NBC, and soon a fourth, Pod Save America.

FIRST QUARTER 2022 SEGMENT HIGHLIGHT

➤SIRIUSXM SEGMENT

Self-Pay Subscribers Remain at 32.0Million. SiriusXM self-pay subscribers decreased modestly by 25,000, and paid promotional subscribers decreased by 54,000.  Continuing impacts of new vehicle trial structures with certain automakers contributed to negative paid promotional net additions during the quarter.  Total subscribers were 34.0 million at March 31, 2022.  The total SiriusXM trial funnel stood at approximately 6.9 million at the end of the quarter, up from 6.8 million at the end of the fourth quarter of 2021.  Self-pay monthly churn remained approximately flat during the quarter but notched a first quarter record at 1.6%.

SiriusXM Revenue Increased 6% to $1.7 Billion.  First quarter 2022 revenue grew 6% to $1.7 billion compared to the first quarter of 2021.  This growth was driven by a 9% increase in SiriusXM's average revenue per user (ARPU) to $15.53 and a 3% increase in SiriusXM self-pay subscribers, partially offset by the effects of a lower base of paid promotional subscribers.

Gross Profit Increased 8% to $1.1 Billion and Gross Margin Remained Stable.  Total cost of services at SiriusXM increased by 4% to $649 million for the quarter compared to the corresponding quarter in 2021.  Gross profit at SiriusXM totaled $1.1 billion, an increase of 8% compared to the 2021 period, producing a gross margin of 62%, a 1 percentage point increase from the prior-year.

➤PANDORA AND OFF-PLATFORM SEGMENT

Advertising Revenue Increased 8% to $336 Million.  First quarter ad revenue in the Pandora and Off-platform segment, including the company's podcasting business, increased by 8% year-over-year to $336 million, a record for first quarter ad revenue.  Ad revenue in the off-platform business climbed 43% year-over-year to nearly $95 million in the first quarter.  Ad revenue also benefited from strong monetization of $89.77 per thousand hours at Pandora, compared to $85.69 from the prior year.

Total Advertising-Supported Listener Hours of 2.68 Billion.  Monthly Active Users (MAUs) at Pandora were 50.6 million in the first quarter of 2022, down from 55.9 million in the prior year period.  Total ad-supported listener hours were 2.68 billion in the first quarter of 2022, down from 2.87 billion in the 2021 period.

Self-Pay Subscribers Increase Modestly.  Self-pay subscribers to the Pandora Plus and Pandora Premium services increased by 4,000 in the first quarter of 2022 to end the period flat at 6.3 million.

Gross Profit Flat.  Subscriber revenue increased by 1%, advertising revenue increased by 8% and total cost of services increased by 8% during the first quarter of 2022. This resulted in gross profit in the Pandora and Off-platform segment of $137 million, flat with the corresponding 2021 period, and produced a gross margin for the year of 29%, down 2 percentage points from prior year period.