A Sizzling Q1 For SiriusXM … Until COVID-19’s Arrival


“In the face of the economy hitting the brakes hard in March, SiriusXM’s first quarter results were very strong,” SiriusXM CEO Jim Meyer said Tuesday morning, with the release of the satellite radio company’s Q1 2020 results.

Indeed, SiriusXM delivered what Zacks Equity Research calls an “earnings surprise” — a positive one, at that. Revenue in the quarter beat its estimates by 2.6%.

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Total revenue jumped to $1.95 billion from $1.74 billion, as both subscriber revenue and advertising revenue increased.

In fact, ad revenue improved to $285 million, from $209 million.

And, although total operating expenses were up slightly, to $1.48 billion from $1.41 billion, income from operations surged to $468 million from $333 million.

As such, net income in Q1 2020 for SiriusXM grew to $373 million (7 cents per diluted share), from $243 million (3 cents).

The Zacks Consensus Estimate had EPS coming in at 5 cents.

Meanwhile, the consensus estimate for SiriusXM’s revenue was $51.29 million less than the actual results seen by the company.

Adjusted EBITDA in the first quarter totaled $639 million, up 13% from $567 million.

While the COVID-19 pandemic has led SiriusXM, like other companies, to scrap its full-year 2020 guidance, the company said it doesn’t expect it and its related economic impact to affect its capital and financial resources — including its liquidity position.

“To date, the pandemic has not increased our costs of or reduced our access to capital under our revolving credit facility, and we do not believe it is reasonably likely to in the future,” the company said ahead of Tuesday’s Opening Bell on Wall Street. “In addition, we do not believe that the pandemic will affect our ongoing ability to meet the covenants in our debt instruments, including under our revolving credit facility.”

As of March 30, $1.75 billion was available for future borrowing under SiriusXM’s revolving credit facility.

That said, SiriusXM has confirmed that the COVID-19 related impact will “adversely affect” subscriber revenue due to a decline in new and used vehicle sales, reduced drive time, increased churn and “the inability of our vendors to fully staff call centers.”


Further, the faded glory of on-demand streaming audio pioneer Pandora may be starting to impact SiriusXM, which now owns it. As total costs in Q1 grew by 4% to $264 million for Pandora, the gross profit of $105 million is down $5.25 million year-over-year.

The 5% profit decline was “driven primarily by slightly higher revenue share and royalties and customer service and billing expenses as a percentage of revenue,” SiriusXM explains.

Further, Monthly Active Users (MAUs) at Pandora were 60.9 million in Q1, down from 66 million in the first quarter of 2019. Total ad supported listener hours were 3.13 billion in the period, down from 3.42 billion in Q1 ’19.