SiriusXM Reports Revenue Growth, Subs Stable

• Revenue in Second Quarter 2022 of $2.25 Billion; an Increase of 4% Year-Over-Year
• Second Quarter 2022 Net Income of $292 Million; Diluted EPS of $0.07
• Adjusted EBITDA of $679 Million
• Year-to-Date Capital Returns to Stockholders of $1.6 Billion
• SiriusXM Reiterates Full-Year Financial Guidance; Expects Positive Full-Year Self Pay Net Subscriber Additions

SiriusXM today announced second quarter 2022 operating and financial results, including revenue of $2.25 billion, an increase of 4% year over year. The company recorded net income of $292 million in the second quarter 2022 compared to $433 million in the prior year period. The prior year period benefited from $140 million of satellite insurance recoveries. Net income per diluted common share was $0.07 in the second quarter 2022 compared to $0.10 in the prior year period, or $0.08 excluding the satellite insurance recoveries recorded in the second quarter of 2021.

Adjusted EBITDA was $679 million in the second quarter of 2022, down 3% from the second quarter of 2021. 

Jennifer Witz

"We are pleased with our results in the second quarter, and while we continue to navigate an uncertain economic environment, we delivered strong financial performance and continued to make strategic investments in our business that will set us up for an exciting new era at SiriusXM," said Jennifer Witz, Chief Executive Officer of SiriusXM. 

"We remain committed to creating compelling experiences for our listeners by investing in innovative technologies to deliver best-in-class, curated, comprehensive audio entertainment. We remain equally committed to delivering consumers the best and widest choice in premium audio content. From launching pop-up channels celebrating Black Music Appreciation Month to acquiring Conan O'Brien's Team Coco to produce new content for our listeners, and most recently, expanding our relationship with the NFL to deliver the most extensive sports lineup in audio entertainment, we will continue to enhance our platform to ensure broad appeal."

"SiriusXM's churn was steady at approximately 1.5% in the quarter, underscoring the strength of our business, our products, and loyalty of our customers. In the second quarter, we delivered focused expansion in key streaming offerings and maintained a strong balance sheet," said Sean Sullivan, Executive Vice President, and Chief Financial Officer. "This quarter we returned over $300 million in capital to stockholders, comprising $217 million in common stock repurchases and $86 million in dividends, and ended the quarter with net debt to adjusted EBITDA of 3.6 times."

➤SiriusXM Financial Metrics and Key Highlights

Self-Pay Subscribers Remain at 32.0 Million

During the second quarter of 2022, SiriusXM self-pay subscribers increased by 23,000 and paid promotional subscribers increased by 54,000. Total subscribers were 34.0 million on June 30, 2022. The SiriusXM trial funnel stood at approximately 7.3 million at the end of the quarter, up from 6.9 million at the end of the first quarter of 2022. Self-pay monthly churn remained at approximately 1.5%.

SiriusXM Revenue Increased 5% to $1.7 Billion

Second quarter 2022 revenue grew 5% to $1.7 billion compared to the second quarter of 2021. This growth was driven by a $1.05 increase in average revenue per user (ARPU), up 7% year over year, resulting in a total ARPU of $15.62. Second quarter 2022 revenue also benefited from a 2% increase in SiriusXM self-pay subscribers, partially offset by the effects of a lower base of paid promotional subscribers.

Gross Profit Increased 6% to $1.1 Billion and Gross Margin Remained Stable

Total cost of services at SiriusXM increased by 3% to $668 million for the quarter compared to the corresponding quarter in 2021. Gross profit at SiriusXM totaled $1.1 billion, an increase of 6% compared to the 2021 period, producing a gross margin of 61%, consistent with the prior year period.

➤Pandora and Off-Platform Financial Metrics and Key Highlights

Advertising Revenue Increased 5% to $403 Million

Second quarter 2022 ad revenue in the Pandora and Off-Platform segment increased by 5% year over year to $403 million. Off-platform advertising, including the company's podcast business, climbed 50% year over year to nearly $119 million in the second quarter of 2022. Ad revenue maintained monetization of approximately $100 per thousand hours at Pandora, remaining roughly flat compared to the second quarter of 2021.

Total Advertising-Supported Listener Hours of 2.84 Billion

Monthly Active Users (MAUs) at Pandora were 50.5 million in the second quarter of 2022, down from 55.1 million in the prior year period. Total ad-supported listener hours were 2.84 billion in the second quarter of 2022, down from 3.03 billion in the 2021 period. Average monthly hours per ad-supported user climbed 3% to 21.1 in the second quarter of 2022 compared to 20.4 in the second quarter of 2021.

Self-Pay Subscribers Decreased Modestly

Self-pay subscribers to the Pandora Plus and Pandora Premium services decreased modestly in the second quarter of 2022 to end the period at 6.3 million.

Gross Profit Falls

Subscriber revenue decreased by 2%, advertising revenue increased by 5% and total cost of services increased by 14% during the second quarter of 2022 driven by investments in new podcast content. This resulted in gross profit in the Pandora and Off-platform segment of $167 million, a decrease of 13% compared to the corresponding 2021 period, and produced a gross margin for the quarter of 31%, down 6 percentage points from the prior year period.

➤Podcast Growth and Expanded Ad Representation

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 four of the top 15 podcasts in the country, including "Crime Junkies," "Office Ladies," "Dateline NBC," and "Pod Save America."

As part of the previously mentioned acquisition of Team Coco, SiriusXM expanded its exclusive global ad representation beyond Team Coco's acclaimed podcasts to also include digital video, social media, and live events associated with Team Coco's properties. During the quarter, the company also signed new agreements with multi-platform internet star Lyle Forever, which includes his hit podcast Therapy Gecko and Critical Role, the D&D role-playing collective with millions of fans. These agreements secured the global advertising sales rights for SXM Media and continued to expand the company's off-platform business, and solidified SXM Media as a leader in the sales of audio advertising for podcasts.