SiriusXM today announced fourth quarter and full-year 2018 operating and financial results, including record revenue of $1.5 billion and $5.8 billion, respectively, increasing 7% and 6% compared to the prior year periods.
The Company’s net income totaled $251 million in the fourth quarter, compared to $(37) million in the prior year period, while full-year 2018 net income grew 81% to a record $1.2 billion. Net income (loss) per diluted common share was $0.06 in the fourth quarter, compared to $(0.01) in the prior year period, while full-year 2018 net income per diluted common share grew 88% to $0.26. Adjusted EBITDA grew 6% to $576 million in the fourth quarter, and grew 6% for the full-year 2018 to a record $2.2 billion.
“SiriusXM had a strong finish to 2018, a year that saw our ninth consecutive year of one-million-plus net subscriber adds and our lowest full-year churn rate in the past decade. We have set even more ambitious goals for the Company to continue growing in 2019. In addition, we were pleased that yesterday Pandora’s stockholders voted in favor of our proposed merger, and expect to close the transaction shortly,” said Jim Meyer, Chief Executive Officer, SiriusXM.
“Our disciplined approach to business models carries through to our programming decisions as a creator and curator of exclusive, compelling programming in talk, music and sports. We recently announced a special concert by KISS on the Sunset Strip, held a subscribers-only performance by Ricky Gervais in New York, launched back-to-back daily political shows with CNN’s Chris Cuomo and ABC’s Dan Abrams, and brought on two new full-time college sports channels. And this week, we are offering an unrivaled array of channels and shows from Radio Row at Super Bowl LIII in Atlanta,” added Meyer.
Total Subscribers Top 34 Million. The Company added 414,000 net new self-pay subscribers in the fourth quarter and 1.4 million for the full-year to end 2018 with approximately 28.9 million self-pay subscribers. Total net subscriber additions in the fourth quarter and full-year were 346,000 and 1.3 million, respectively, resulting in more than 34.0 million total SiriusXM subscribers at the end of 2018. Self-pay churn for 2018 totaled just over 1.7%, the lowest full-year churn rate since 2007.
Full-year 2018 revenue grew 6% compared to 2017 to a record $5.8 billion. This growth was driven by a 4% increase in subscribers and growth in average revenue per user (ARPU) to $13.34.
Net income for the full-year 2018 totaled $1.2 billion, up 81% from $648 million in 2017. This increase included a $43 million unrealized gain associated with the change in fair value of the Company’s Pandora investment, in addition to savings from the Tax Act, which reduced the U.S. federal corporate income tax rate from 35% to 21% and savings from research and development credits. The Company’s effective tax rate for the full-year 2018 totaled 17.2%, which is below the approximately 24-25% rate expected in the future.
“SiriusXM continued significant capital returns in 2018, distributing approximately $1.5 billion to stockholders throughout the year. We repurchased approximately 209 million shares in 2018 for $1.3 billion and, in addition, the Company paid over $200 million in dividends to stockholders. Our Board of Directors recently added an additional $2 billion to our stock repurchase authorization, bringing our total authorization to $14 billion, with $3.3 billion remaining. At year-end 2018, our debt to adjusted EBITDA was 3.1 times and we had cash on hand of $54 million with undrawn revolver capacity of approximately $1.3 billion. In 2019, we will continue to use our strong capitalization and ample liquidity to invest in our business, make strategic investments and further return capital to stockholders,” noted David Frear, Chief Financial Officer, SiriusXM.
On September 24, 2018, Sirius XM Holdings Inc. announced it had signed an agreement to acquire Pandora Media in an all-stock transaction. Pandora’s stockholders voted in favor of the transaction at a special meeting held yesterday, January 29, 2019. SiriusXM expects the acquisition to close shortly.
“We have made significant progress in our plans to integrate Pandora into SiriusXM, and I’d like to thank Roger Lynch for his thoughtful stewardship of Pandora over the past 16 months as its CEO. Together, the SiriusXM and Pandora brands are uniquely positioned to lead a new era of audio entertainment by delivering the most compelling subscription and ad-supported audio experiences to millions of listeners — in the car, at home and on the go. I’m incredibly excited by the opportunity that sits in front of us to build a media company that will be competitive for decades to come,” said Jim Meyer.