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Sirius XM (SIRI) Down 7.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Sirius XM (SIRI - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sirius XM due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Sirius XM Q4 Earnings Top Estimates, Revenues Up Y/Y
Sirius XM Holdings delivered fourth-quarter 2021 earnings of 8 cents per share, beating the Zacks Consensus Estimate by 14.3% and increasing the same percentage year over year.
Total revenues on a reported basis increased 4.2% year over year to $2.28 billion. The figure beat the consensus mark by 0.71%
Subscriber revenues (74.3% of total revenues) rose 5% from the year-ago quarter to $1.70 billion.
Meanwhile, advertisement revenues (21.7%) increased 4.4% year over year to $495 million. Equipment revenues (2.3% of total revenues) declined 11.7% year over year to $53 million.
Other revenues (1.7% of total revenues) decreased 5% from the year-ago quarter to $38 million.
Sirius XM Standalone Details
Sirius XM segment revenues were $1.71 billion, up 4.5% year over year. While the subscriber base declined 2%, the company witnessed growth of 7% in ARPU that amounted to $15.34.
Self-pay subscribers increased 3.7% year over year to 32.04 million. Net self-pay subscribers declined 231K in the reported quarter.
Total subscribers were 34.03 million at the end of fourth-quarter 2021, less than 34.65 million at the end of fourth-quarter 2020.
Sirius XM traffic users stayed at 8.568 million. However, Canada subscribers fell 4% to 2.517 million.
Additionally, the average self-pay monthly churn rate was 1.7% in the fourth quarter, up 10 basis points (bps) year over year.
Subscriber revenues rose 5.3% year over year to $1.56 billion. Moreover, Equipment revenues fell 11.7% year over year to $53 million.
However, advertising revenues were $53 million, up 8.2% year over year. Other revenues declined 5% year over year to $38 million.
Pandora Details
Pandora’s revenues increased 3.6% year over year to $575 million, owing to 4% growth in advertising revenues, which totaled $442 million. Subscriber revenues climbed 2.3% year over year to $133 million.
The growth in ad revenues was due to an increase in fourth-quarter monetization to $117.36 per thousand hours, up 4.1% year over year.
However, ARPU increased 0.4% year over year to $6.70.
Monthly active users were 52.28 million at the end of the reported quarter, down from 58.88 million in the year-ago quarter. Ad-supported listener hours declined 6.4% year over year to 2.77 billion.
Pandora exited the fourth quarter with 6.393 million self-pay subscribers, up 0.8% year over year.
Operating Details
In the fourth quarter, total operating expenses fell 32.9% year over year to $1.81 billion.
Revenue share and royalty costs were up 5.4% year over year to $698 million. Programming & content costs were $152 million, up 16.9%. Cost of equipment declined 16.7% year over year to $5 million.
Customer service & billing costs increased 6.6% year over year, at $130 million. Transmission costs increased 33.3% year over year to $64 million.
Subscriber acquisition costs declined 23.8% year over year to $80 million. General and administrative costs declined 11% to $137 million.
Engineering, design and development expenses increased 1.5% from the year-ago quarter to $68 million. Sales and marketing expenses increased 12.6% to $330 million.
Adjusted EBITDA inched up 1.8% year over year to $672 million.
Balance Sheet
As of Dec 31, 2021, cash and cash equivalents were $191 million compared with $164 million as of Sep 30, 2021.
The long-term debt, as of Dec 31, 2021, was $8.83 billion compared with $8.5 billion as of Dec 30, 2020.
At the end of the fourth quarter, Sirius XM’s net debt to trailing 12-month adjusted EBITDA ratio was 3.5 times.
2022 Guidance
Revenues are expected to be $9 billion. Adjusted EBITDA is expected to be $2.8 billion.
The company anticipates adding almost 500K Sirius XM self-pay net subscribers in 2022.
Free cash flow is expected to be $1.55 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 9.52% due to these changes.
VGM Scores
At this time, Sirius XM has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Sirius XM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Sirius XM (SIRI) Down 7.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Sirius XM (SIRI - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sirius XM due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Sirius XM Q4 Earnings Top Estimates, Revenues Up Y/Y
Sirius XM Holdings delivered fourth-quarter 2021 earnings of 8 cents per share, beating the Zacks Consensus Estimate by 14.3% and increasing the same percentage year over year.
Total revenues on a reported basis increased 4.2% year over year to $2.28 billion. The figure beat the consensus mark by 0.71%
Subscriber revenues (74.3% of total revenues) rose 5% from the year-ago quarter to $1.70 billion.
Meanwhile, advertisement revenues (21.7%) increased 4.4% year over year to $495 million. Equipment revenues (2.3% of total revenues) declined 11.7% year over year to $53 million.
Other revenues (1.7% of total revenues) decreased 5% from the year-ago quarter to $38 million.
Sirius XM Standalone Details
Sirius XM segment revenues were $1.71 billion, up 4.5% year over year. While the subscriber base declined 2%, the company witnessed growth of 7% in ARPU that amounted to $15.34.
Self-pay subscribers increased 3.7% year over year to 32.04 million. Net self-pay subscribers declined 231K in the reported quarter.
Total subscribers were 34.03 million at the end of fourth-quarter 2021, less than 34.65 million at the end of fourth-quarter 2020.
Sirius XM traffic users stayed at 8.568 million. However, Canada subscribers fell 4% to 2.517 million.
Additionally, the average self-pay monthly churn rate was 1.7% in the fourth quarter, up 10 basis points (bps) year over year.
Subscriber revenues rose 5.3% year over year to $1.56 billion. Moreover, Equipment revenues fell 11.7% year over year to $53 million.
However, advertising revenues were $53 million, up 8.2% year over year. Other revenues declined 5% year over year to $38 million.
Pandora Details
Pandora’s revenues increased 3.6% year over year to $575 million, owing to 4% growth in advertising revenues, which totaled $442 million. Subscriber revenues climbed 2.3% year over year to $133 million.
The growth in ad revenues was due to an increase in fourth-quarter monetization to $117.36 per thousand hours, up 4.1% year over year.
However, ARPU increased 0.4% year over year to $6.70.
Monthly active users were 52.28 million at the end of the reported quarter, down from 58.88 million in the year-ago quarter. Ad-supported listener hours declined 6.4% year over year to 2.77 billion.
Pandora exited the fourth quarter with 6.393 million self-pay subscribers, up 0.8% year over year.
Operating Details
In the fourth quarter, total operating expenses fell 32.9% year over year to $1.81 billion.
Revenue share and royalty costs were up 5.4% year over year to $698 million. Programming & content costs were $152 million, up 16.9%. Cost of equipment declined 16.7% year over year to $5 million.
Customer service & billing costs increased 6.6% year over year, at $130 million. Transmission costs increased 33.3% year over year to $64 million.
Subscriber acquisition costs declined 23.8% year over year to $80 million. General and administrative costs declined 11% to $137 million.
Engineering, design and development expenses increased 1.5% from the year-ago quarter to $68 million. Sales and marketing expenses increased 12.6% to $330 million.
Adjusted EBITDA inched up 1.8% year over year to $672 million.
Balance Sheet
As of Dec 31, 2021, cash and cash equivalents were $191 million compared with $164 million as of Sep 30, 2021.
The long-term debt, as of Dec 31, 2021, was $8.83 billion compared with $8.5 billion as of Dec 30, 2020.
At the end of the fourth quarter, Sirius XM’s net debt to trailing 12-month adjusted EBITDA ratio was 3.5 times.
2022 Guidance
Revenues are expected to be $9 billion. Adjusted EBITDA is expected to be $2.8 billion.
The company anticipates adding almost 500K Sirius XM self-pay net subscribers in 2022.
Free cash flow is expected to be $1.55 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 9.52% due to these changes.
VGM Scores
At this time, Sirius XM has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Sirius XM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.