SiriusXM Q2 was up 10%


Sirius XMSiriusXM’s revenue was for the quarter was  $1.035 billion, up 10% from Q2 2013.  Net income was $120 million, or $0.02 per diluted share. Adjusted net income climbed 60% to $131 million in Q2, from $82 million in Q2 2013.  Adjusted EBITDA Q2 reached a record $370 million, up 31% from $283 million in Q2 2013.

“SiriusXM once again posted outstanding results in the second quarter by adding 475,000 total net new subscribers, including 380,000 net new self-pay subscribers.  We set new records for trial conversions to self-pay, adjusted EBITDA and adjusted EBITDA margin in the quarter, and we are raising our 2014 guidance for revenue, adjusted EBITDA, and free cash flow,” said Jim Meyer, SiriusXM CEO. “Our extraordinary operating performance supported the buyback of over 350 million shares in the quarter, or approximately 6% of our outstanding stock.  Perhaps more importantly, we improved our superior content by adding even more channels and shows created with major brands and personalities, such as Joel Osteen, NBC’s TODAY Show, and YouTube, and we expanded the range and depth of our commercial-free music programming with the introduction of three new channels in the categories of country, women’s pop, and dance,” added Meyer. “As the leader in audio entertainment, we never rest in searching for new content that our subscribers will love.”

He added: “Our connected vehicle business is a key part of our long-term strategy which increases our importance to OEMs and allows us to provide services like safety, security and convenient features to the same users as our audio business.

Most OEMs will be making connected vehicle architecture and service decisions within calendar year 2014 and 2015. And we are heavily involved with them in these discussions. However, due to automotive design and production lead times, most car manufacturers will gradually implement their embedded connected car strategy starting now through the 2019 timeframe.

I really like how things are going here. But I’d like to reiterate, investors will need to be patient here. As I’ve said before, this is a march, not a sprint. But it’s very clear where this will end up. And we are confident that Sirius XM will be a leader in the connected vehicle.”

Additional highlights in Q2:

–Net subscriber additions in the quarter were 475,472.  The total paid subscriber base reached a record 26.3 million, up 5% from a year earlier.  Self-pay net subscriber additions were 379,711, and the self-pay subscriber base reached a record high of 21.6 million, up 7% from the second quarter of 2013. Paid and unpaid trials combined to produce a total trial funnel of 7.3 million at the end of the quarter, the largest in the company’s history.

–The company’s adjusted EBITDA margin reached a record 35.7% in the second quarter of 2014, up approximately 570 basis points from the second quarter of 2013.

—  Free cash flow in the quarter was $335 million, up 42% from $237 million in the Q22013.  Free cash flow per diluted share was 5.4 cents in Q2, up 47% from 3.7 cents in the second quarter of 2013.

“Since we launched our capital return program in late 2012, we have returned approximately $3.75 billion to stockholders in less than two years,” noted David Frear, SiriusXM CFO. “On July 15th, our Board of Directors increased our cumulative share repurchase authorization to $6 billion.  Total debt-to-adjusted EBITDA at the end of the second quarter 2014 was 3.5 times, and our $1.25 billion revolving credit was undrawn, leaving us ample liquidity to return capital to shareholders and pursue strategic opportunities as they arise,” added Frear.

SiriusXM reaffirmed its previously issued 2014 guidance for net subscriber additions and increased its guidance for revenue, adjusted EBITDA, and free cash flow:

Net subscriber additions of $1.25 million,

Revenue of $4.1 billion,

Adjusted EBITDA of $1.425 billion, and

Free cash flow of $1.1 billion.