Another strong growth quarter for SiriusXM

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Former AM and FM radio boss Mel Karmazin continues to enjoy his new life as CEO of the nation’s only satellite radio company. SiriusXM reported Q4 revenue up 7% to $784 million, with adjusted EBITDA up 16% to $167 million.


For all of 2011 SiriusXM revenues gained 7% to $3.01 billion and adjusted EBITDA rose 17% to of $731 million. Free cash flow (FCF) nearly doubled (up 98%) to $416 million.

As good as that was, Karmazin told investors and analysts that the company was actually held back in its 2011 growth. “And had we not been constrained on the revenue side by our agreement with the FCC and other litigation [not to raise prices following the merger of Sirius and XM] the numbers would have been even stronger,” the CEO declared. “Those handcuffs are now off for 2012 and beyond. For 2012 we are very optimistic about our ability to grow subscribers and at this time we expect 1.3 million net additions this year, which should put our subscriber base at another all-time record high of 23.2 million by the end of the year.”

SiriusXM is projecting a slight increase in churn due to its recent price increase, although company officials noted that there has been little consumer blow-back so far. Meanwhile, the company is looking to add new subscribers as auto sales rebound. Karmazin noted that the consensus of forecasters is that 13.7 new cars and light trucks will be sold in the US in 2012. SiriusXM is also rapidly expanding its partnerships with dealers to market its service to buyers of used cars already equipped with either Sirius or XM receivers. 

On the financial side, SiriusXM is projecting that 2012 revenues will grow to $3.3 billion and that adjusted EBITDA will incre4ase to $875 million.

Karmazin loves to talk about the company’s free cash flow – and for good reason. SiriusXM has been paying down debt and reducing its programming costs. So, as revenues increase more and more of that cash is flowing to FCF. So the CEO is projecting that 2012 FCF should be around $700 million – a 68% gain on top of the just-reported 98% gain.

And know you know why Mel is enjoying his new life.

RBR-TVBR observation: Hard to believe that this company was teetering on the brink of bankruptcy exactly three years ago.