SIRIUS XM Holdings Inc. (SIRI - Free Report) reported second-quarter 2016 results, wherein the bottom line missed the Zacks Consensus Estimate while the top line surpassed the same.
Quarterly earnings of 3 cents per share missed the Zacks Consensus Estimate by a penny. Meanwhile, total revenue of $1.24 billion exhibited annualized growth of 10% and was also above the consensus mark of $1.23 billion.
Operating Performance
Quarterly total operating expenses stood at $873.4 million, down 3.4% year over year. Operating income, in the reported quarter, was around $362.2 million, up a staggering 65% year over year. SIRIUS XM posted an adjusted EBITDA of $467.8 million, up 12.7% year over year.
At the end of the second quarter of 2016, SIRIUS XM had $432.1 million of cash from operations compared with $402.3 million in the prior-year quarter. Quarterly free cash flow in the same quarter stood at $394.9 million compared with $370.9 million in the year-ago quarter.
At the end of the quarter under review, SIRIUS XM had $476.5 million of cash and cash equivalents and $6,097 million of outstanding debt compared with $111.8 million and $5,443.6 million, respectively, at the end of 2015.
Segment-wise Results
Quarterly Subscriber revenues totaled $1,033.3 million, up 9.9% year over year. Advertising revenues stood at $33.5 million, up 16.2% year over year. Equipment revenues were $27.9 million, down 4.8% year over year. Other revenues grossed $140.9 million, up 12.7% year over year.
Subscriber Statistics
In the second quarter of 2016, SIRIUS XM added 587,000 subscribers which took the company’s total subscriber tally to 30,646,000 as of Jun 30, 2016, up 7.8% year over year. Payment category wise, Self-Pay subscriber count totaled 25,143,000 (up 7.3% year over year) while the Paid Promotional customer count was 5,503,000 (up 10.1% year over year).
Important Operating Metrics
SIRIUS XM’s average revenue per user stood at $12.78 in the second quarter of 2016, up 3% year over year. Average self-pay monthly churn rate was 1.8% against 1.6% in the year-earlier quarter. New Vehicle Customer Conversion rate was 40% versus 41% in the prior-year quarter. Subscriber acquisition cost per installation stood at $32, flat with the prior-year quarter figure.
Financial Outlook
Management anticipates 1.7 million of net subscriber addition in 2016 instead of 1.6 million while revenue and adjusted EBITDA are likely to be $5 billion and $1.8 billion, respectively, instead of the prior estimations of $4.9 billion and $1.78 billion for 2016. The company’s stock gained 4.82% post the earnings release as investors seemed pleased with the revenue beat and the raised outlook. Meanwhile, free cash flow is expected at around $1.5 billion.
Zacks Rank and Stocks to Consider
Currently, SIRIUS XM has a Zacks Rank #4 (Sell). Better-ranked stocks in the sector include CBS Corp , Discovery Communications Inc. and Starz . All the companies carry a Zacks Rank #2 (Buy).
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SIRIUS XM Holdings Inc. (SIRI - Free Report) reported second-quarter 2016 results, wherein the bottom line missed the Zacks Consensus Estimate while the top line surpassed the same.
Quarterly earnings of 3 cents per share missed the Zacks Consensus Estimate by a penny. Meanwhile, total revenue of $1.24 billion exhibited annualized growth of 10% and was also above the consensus mark of $1.23 billion.
Operating Performance
Quarterly total operating expenses stood at $873.4 million, down 3.4% year over year. Operating income, in the reported quarter, was around $362.2 million, up a staggering 65% year over year. SIRIUS XM posted an adjusted EBITDA of $467.8 million, up 12.7% year over year.
At the end of the second quarter of 2016, SIRIUS XM had $432.1 million of cash from operations compared with $402.3 million in the prior-year quarter. Quarterly free cash flow in the same quarter stood at $394.9 million compared with $370.9 million in the year-ago quarter.
At the end of the quarter under review, SIRIUS XM had $476.5 million of cash and cash equivalents and $6,097 million of outstanding debt compared with $111.8 million and $5,443.6 million, respectively, at the end of 2015.
Segment-wise Results
Quarterly Subscriber revenues totaled $1,033.3 million, up 9.9% year over year. Advertising revenues stood at $33.5 million, up 16.2% year over year. Equipment revenues were $27.9 million, down 4.8% year over year. Other revenues grossed $140.9 million, up 12.7% year over year.
Subscriber Statistics
In the second quarter of 2016, SIRIUS XM added 587,000 subscribers which took the company’s total subscriber tally to 30,646,000 as of Jun 30, 2016, up 7.8% year over year. Payment category wise, Self-Pay subscriber count totaled 25,143,000 (up 7.3% year over year) while the Paid Promotional customer count was 5,503,000 (up 10.1% year over year).
Important Operating Metrics
SIRIUS XM’s average revenue per user stood at $12.78 in the second quarter of 2016, up 3% year over year. Average self-pay monthly churn rate was 1.8% against 1.6% in the year-earlier quarter. New Vehicle Customer Conversion rate was 40% versus 41% in the prior-year quarter. Subscriber acquisition cost per installation stood at $32, flat with the prior-year quarter figure.
Financial Outlook
Management anticipates 1.7 million of net subscriber addition in 2016 instead of 1.6 million while revenue and adjusted EBITDA are likely to be $5 billion and $1.8 billion, respectively, instead of the prior estimations of $4.9 billion and $1.78 billion for 2016. The company’s stock gained 4.82% post the earnings release as investors seemed pleased with the revenue beat and the raised outlook. Meanwhile, free cash flow is expected at around $1.5 billion.
Zacks Rank and Stocks to Consider
Currently, SIRIUS XM has a Zacks Rank #4 (Sell). Better-ranked stocks in the sector include CBS Corp , Discovery Communications Inc. and Starz . All the companies carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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