•2023 Full-Year Revenue of $8.95 Billion

•Full-Year Net Income of $1.26 Billion; Diluted EPS of $0.32

•Full-Year Adjusted EBITDA of $2.79 Billion

•Full-Year Free Cash Flow of $1.20 Billion

•Company Announces 2024 Financial Guidance

NEW YORK – February 1, 2024 – SiriusXM today announced fourth quarter and full-year 2023 operating and financial results, including revenue of $2.29 billion and $8.95 billion, respectively, which remained relatively flat compared to the same periods in 2022. The company recorded net income of $352 million and $1.26 billion in the fourth quarter and full-year 2023, respectively, compared to $365 million and $1.21 billion in the prior year, respectively. Net income per diluted common share was $0.09 and $0.32 in the fourth quarter and full-year 2023, respectively.

In the fourth quarter of 2023, adjusted EBITDA totaled $715 million, a 4% decrease from the $742 million recorded in the same period in 2022. Full-year 2023 adjusted EBITDA of $2.79 billion declined slightly at 2% when compared to the prior year.

In the fourth quarter of 2023, the company generated $445 million in free cash flow compared to $529 million in the prior year period. Full-year 2023 free cash flow was $1.20 billion, compared to $1.55 billion in the preceding year. The decrease in free cash flow was primarily attributed to higher capital expenditures driven by satellite construction and investments in the company’s products and technology platform as well as higher cash taxes paid.

"In 2023, SiriusXM laid the groundwork for future growth through the successful launch of our next-generation platform and the new SiriusXM app,” said Jennifer Witz, Chief Executive Officer. "Our commitment to growth was also demonstrated by strategic content investments that expanded our reach to new listeners and by staying true to our identity as a hub for curated, live and on-demand audio experiences. As we look to 2024, our guidance reflects substantial efforts and investments to enhance the value proposition of our subscription and advertising businesses, which we believe will strengthen our long-term growth profile."

“Our fourth quarter financial results speak volumes about our resilient performance,” said Tom Barry, Chief Financial Officer. “In the year ahead, we see opportunities for further cost efficiencies and to streamline our business in new and innovative ways. We plan to maintain our long-term target leverage ratio of mid-to low-3 times adjusted EBITDA, with a plan to return to this range in the second half of 2025 following our expected closing of the announced transaction with Liberty Media this summer. While we anticipate a focus on deleveraging, we will continue our dividend policy and remain opportunistic on share repurchases,” added Barry.

Sirius XM Holdings operates two complementary audio entertainment businesses — one of which is referred to as “SiriusXM” and the second of which is referred to as “Pandora and Off-Platform.” Further information regarding these two segments will be contained in the company’s Annual Report on Form 10-K for the year ended December 31, 2023. The financial highlights below exclude the impact of share-based payment expense.

 

SiriusXM added approximately 131,000 new self-pay subscribers in the fourth quarter of 2023. For the full-year 2023, self-pay subscribers decreased by 445,000 and we ended 2023 with approximately 34 million total subscribers. Paid promotional subscribers declined by 225,000 during the fourth quarter of 2023; however, paid promotional subscribers increased by approximately 15,000 for the full-year 2023. The total vehicle trial funnel stood at approximately 7.2 million at the end of 2023, up from 6.8 million at the end of 2022 but down from 7.5 million at the end of the third quarter 2023. Self-pay monthly churn for 2023 remained low at 1.6%.

In 2023, SiriusXM's total revenue was $6.8 billion, a 1% decrease from 2022. This decrease was primarily a result of lower paid promotional revenue from automakers, reduced revenue from connected vehicle services and a 14% decline in advertising revenue, in large part due to reduced news and entertainment spots sold and aired, and was partially offset by an increase in self-pay subscription revenue. The full-year 2023 Average Revenue Per User (ARPU) decreased slightly to $15.56, driven by a growing number of self-pay streaming-only and promotional subscriptions, along with reduced rates from automakers offering paid promotional plans and lower advertising revenue.

Total cost of services at SiriusXM was $2.7 billion for 2023, a 2% increase compared to the prior year. Gross profit at SiriusXM in 2023 totaled $4.2 billion, a decrease of 3% compared to $4.3 billion recorded in 2022, producing a gross margin of 61%, one percentage point lower than the prior year.

In the fourth quarter, SiriusXM made significant strides in expanding its exclusive content portfolio with the introduction of new artist channels featuring John Mayer and Kelly Clarkson, along with several new genre channels tailored to capture the interests of younger audiences. "Life with John Mayer" stands out for its innovative organization of content by time and day, and has become a listener favorite, launching as one of its most listened-to artist-branded channels.

Adding to the company's high-profile talent roster, “This Life of Mine with James Corden” premiered today on the SiriusXM channel Stars.

On December 14, 2023, SiriusXM achieved a significant milestone in its growth strategy by launching its new app on its next-generation platform. The app has swiftly gained traction, and with roughly 90% of existing mobile users transitioned to the new platform, the recommendation engine is introducing listeners to a greater breadth of content available on SiriusXM.

In 2023, SiriusXM extended its long-term agreements with major automakers such as Mercedes-Benz, Volvo, and Honda. These agreements are standardizing personalization and content discovery features across all 360L-enabled vehicles, enhancing the in-vehicle experience with increased access to even more music channels, Personalized Artist Stations, Live Sports, and more. Additionally, in 2023, SiriusXM expanded its adoption with electric vehicle makers, signing agreements with Rivian and Polestar to integrate SiriusXM this year.

Self-pay subscribers to the Pandora Plus and Pandora Premium services decreased by 3% in 2023 to 6.0 million users compared to 6.2 million users at the end of 2022.

Monthly Active Users (MAUs) at Pandora were 46.0 million at the end of 2023, down from 47.6 million in the prior year. Total ad-supported listener hours were 10.48 billion at the end of 2023, down 4% from 10.88 billion at the end of 2022. Average monthly hours per ad-supported user grew 3% to 21.2 in 2023 compared to 20.6 in 2022.

Advertising revenue in the Pandora and Off-Platform segment for the full-year 2023 reached $1.6 billion, an increase of 1% year-over-year. The increase is attributable to steady growth in the company’s programmatic and podcasting advertising sales despite a challenged advertising market throughout the year.

Total cost of services increased by 2% for the full year 2023, while subscriber revenue of $524 million remained relatively flat year-over-year. Advertising revenue increased as noted above. This resulted in a gross profit in the Pandora and Off-Platform segment of $638 million for the full year 2023, a decrease of 3% compared to the prior year, and produced a gross margin of 30%.

SiriusXM's podcast network continues to grow, highlighted by the recent announcement of a new exclusive agreement with the hit podcast “SmartLess” that benefits both SiriusXM’s subscription and advertising business with a wide array of exclusive content only available to subscribers, along with global advertising sales rights.

Subscriber acquisition costs increased by 2% to $359 million for the full-year 2023 compared to $352 million in the prior year, driven by higher equipment installations by automakers. Sales and marketing costs decreased by 13% to $886 million for the full-year 2023 compared to $1,023 million in 2022. The decrease was driven by reduced marketing spend ahead of the SiriusXM digital product launch. In addition, 2022 sales and marketing expense was boosted by a multi-media national ad campaign that aired throughout 2022 promoting SiriusXM. Engineering, design and development costs increased 12% to $276 million in 2023 in support of SiriusXM’s digital product launch, and general and administrative expenses increased by 3% to $478 million in 2023. In 2023, we saved $140 million through cost optimization and consolidation across all aspects of our business. For 2024, we aim for an extra $200 million in savings by further optimizing areas including marketing and programming, and enhancing customer service efficiency.

The company announced its full-year 2024 guidance for revenue, adjusted EBITDA, and free cash flow:

• Total revenue of approximately $8.75 billion,

• Adjusted EBITDA of approximately $2.70 billion, and

• Free cash flow of approximately $1.20 billion.

The company’s guidance for adjusted EBITDA and free cash flow for 2024 does not include any effects of the proposed transaction with Liberty Media, anticipated to close during the third quarter of 2024. The company therefore expects to revise its 2024 free cash flow guidance following the closing of the Liberty Media transaction. The company anticipates that free cash flow will be reduced by expenses associated with the proposed transaction with Liberty Media and incremental interest expense associated with debt being assumed and incurred in connection with the proposed transaction.

As a matter of general practice, the company does not publicly disclose detailed internal projections of its future financial performance. However, certain unaudited financial forecasts for the years ending December 31, 2024, and December 31, 2025, were prepared by the company in connection with the announced transaction with Liberty Media, and at that time represented management’s best estimates of certain financial items. A summary of those financial forecasts is contained in the Registration Statement on Form S-4 filed by Liberty Sirius XM Holdings Inc. with the Securities and Exchange Commission on January 29, 2024, under the heading 'Sirius XM Holdings Financial Projections.' Certain of those financial projections were used by the Special Committee of the Sirius XM Holdings Inc. Board of Directors solely in connection with the preparation of its financial advisor’s analyses and opinion.

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(1)The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet. The restricted cash balances are primarily due to letters of credit which have been issued to the landlords of leased office space. The terms of the letters of credit primarily extend beyond one year.

Set forth below are our results of operations for the three and twelve months ended December 31, 2023 compared with the three and twelve months ended December 31, 2022. Legal settlements and reserves and share-based payment expense have been excluded from cost of services line items and presented as their own line items in the table below, as this is consistent with how the segments are evaluated on a regular basis.

(1)    Allocation of share-based payment expense:

A full glossary defining our key financial and operating metrics can be found in our Annual Report on Form 10-K for the year ended December 31, 2023.

Subscribers and subscription related revenues and expenses associated with our connected vehicle services and Sirius XM Canada are not included in Sirius XM's subscriber count or subscriber-based operating metrics. Subscribers to Cloud Cover are not included in Pandora's subscriber count.

Set forth below are our subscriber balances as of December 31, 2023 compared to December 31, 2022:

The following table contains our Non-GAAP financial and operating performance measures which are based on our adjusted results of operations for the three and twelve months ended December 31, 2023 and 2022:

(1)    ARPU for Sirius XM excludes subscriber revenue from our connected vehicle services of $40 and $41 for the three months ended December 31, 2023 and 2022, respectively, and $161 and $182 for the years ended December 31, 2023 and 2022, respectively.

Reconciliation from GAAP Net income to Non-GAAP Adjusted EBITDA:

Reconciliation of Free Cash Flow:

Reconciliation of SAC, per installation:

			For the Three Months Ended December 31,												For the Twelve Months Ended December 31,
(costs in millions and installs in thousands)			2023						2022						2023						2022
Subscriber acquisition costs, excluding connected vehicle services			$	89					$	85					$	359					$	352
Less: margin from sales of radios and accessories, excluding connected vehicle services			(47)						(38)						(179)						(176)
			$	42					$	47					$	180					$	176
Installations			3,426						3,010						13,640						12,270
SAC, per installation (a)			$	12.14					$	15.72					$	13.18					$	14.32

(a)    Amounts may not recalculate due to rounding.

###

 

SiriusXM is the leading audio entertainment company in North America with a portfolio of audio businesses including its flagship subscription entertainment service SiriusXM; the ad-supported and premium music streaming services of Pandora; an expansive podcast network; and a suite of business and advertising solutions. Reaching a combined monthly audience of approximately 150 million listeners, SiriusXM offers a broad range of content for listeners everywhere they tune in with a diverse mix of live, on-demand, and curated programming across music, talk, news, and sports. For more about SiriusXM, please go to: www.siriusxm.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including certain statements relating to the completion of the proposed transaction, proposed trading of Liberty Sirius XM Holdings Inc. (“New Sirius”) common stock and other matters related to such proposed transaction. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws. These forward-looking statements generally can be identified by phrases such as “possible,” “potential,” “intends” or “expects” or other words or phrases of similar import or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” “could,” or similar variations. These forward-looking statements involve many risks and uncertainties that could cause actual results and the timing of events to differ materially from those expressed or implied by such statements, including, but not limited to: historical financial information may not be representative of future results; there may be significant transaction costs and integration costs in connection with the proposed transaction (including significant tax liability); the parties may not realize the potential benefits of the proposed transaction in the near term or at all; an active trading market for New Sirius common stock may not develop; the uncertainty of the market value of the New Sirius common stock; the satisfaction of all conditions to the proposed transaction; the proposed transaction may not be consummated; Liberty Media Corporation (“Liberty Media”) and Sirius XM Holdings Inc. (“SiriusXM”) may need to use resources that are needed in other parts of their business to do so; there may be liabilities that are not known, probable or estimable at this time; the proposed transaction may result in the diversion of management’s time and attention to issues relating to the proposed transaction and integration; unfavorable outcome of legal proceedings that may be instituted against Liberty Media and/or SiriusXM following the announcement of the proposed transaction; risks related to disruption of management time from ongoing business operations due to the proposed transaction; risks inherent to the business may result in additional strategic and operational risks, which may impact Liberty Media, New Sirius and/or SiriusXM’s risk profiles, which each company may not be able to mitigate effectively; and other risks and uncertainties detailed in periodic reports that Liberty Media and SiriusXM file with the SEC. These forward-looking statements speak only as of the date of this press release, and Liberty Media and SiriusXM expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media’s or SiriusXM’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of Liberty Media and SiriusXM, including their most recent Forms 10-K and 10-Q, as such risk factors may be amended, supplemented or superseded from time to time by other reports Liberty Media or SiriusXM subsequently file with the SEC, for additional information about Liberty Media and SiriusXM and about the risks and uncertainties related to Liberty Media’s and SiriusXM’s businesses which may affect the statements made in this press release.

Additional Information

Nothing in this press release shall constitute a solicitation to buy or an offer to sell shares of common stock of Liberty Media, SiriusXM or New Sirius. The proposed offer and issuance of shares of New Sirius common stock in the proposed transactions will be made only pursuant to an effective registration statement on Form S-4, including a proxy statement of Liberty Media, prospectus of New Sirius, and information statement of SiriusXM, which was initially filed with the SEC on January 29, 2024 (the “Registration Statement”). LIBERTY MEDIA AND SIRIUSXM STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT, TOGETHER WITH ALL RELEVANT SEC FILINGS REGARDING THE PROPOSED TRANSACTION, AND ANY OTHER RELEVANT DOCUMENTS FILED AS EXHIBITS THEREWITH, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. After the Registration Statement is declared effective, the proxy statement/prospectus/ information statement and other relevant materials for the proposed transaction will be mailed to all Liberty Media and SiriusXM stockholders. Copies of these SEC filings will be available, free of charge, at the SEC’s website (http://www.sec.gov). Copies of the filings together with the materials incorporated by reference therein will also be available, without charge, by directing a request to Liberty Media Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112, Attention: Investor Relations, Telephone: (877) 772-1518 or Sirius XM Holdings Inc., 1221 Avenue of the Americas, 35th Floor, New York, New York 10021, Attention: Investor Relations, (212) 584-5100.

Participants in a Solicitation

Liberty Media anticipates that the following individuals will be participants (the “Liberty Media Participants”) in the solicitation of proxies from holders of Liberty Media’s LSXMA and LSXMB common stock in connection with the proposed transaction: John C. Malone, Chairman of the Liberty Media Board of Directors, Robert R. Bennett, Derek Chang, Brian M. Deevy, M. Ian G. Gilchrist, Evan D. Malone, Larry E. Romrell, and Andrea L. Wong, all of whom are members of the Liberty Media Board of Directors, Gregory B. Maffei, Liberty Media’s President, Chief Executive Officer and Director, and Brian J. Wendling, Liberty Media’s Chief Accounting Officer and Principal Financial Officer. Information regarding the Liberty Media Participants, including a description of their direct or indirect interests, by security holdings or otherwise, can be found under the caption “Security Ownership of Certain Beneficial Owners and Management—Security Ownership of Management of Liberty Media” contained in the Registration Statement and which is available at: https://www.sec.gov/Archives/edgar/data/2003397/000110465924007830/tm243744-1_s4.htm#tSOOM. To the extent that certain Liberty Media Participants or their affiliates have acquired or disposed of security holdings since the “as of” date disclosed in the Registration Statement, such transactions have been or will be reflected on Statements of Change in Ownership on Form 4 or amendments to beneficial ownership reports on Schedules 13D filed with the SEC, which are available at: https://www.sec.gov/edgar/browse/?CIK=1560385&owner=exclude. Additional information regarding the Liberty Media Participants in the proxy solicitation and a description of their interests will be contained in the proxy statement for Liberty Media’s special meeting of stockholders and other relevant materials to be filed with the SEC in respect of the contemplated transactions when they become available.

These documents can be obtained free of charge from the sources indicated above.

SiriusXM anticipates that the following individuals will be participants (the “SiriusXM Participants”) in the solicitation of proxies from holders of Liberty Media’s LSXMA and LSXMB common stock in connection with the proposed transaction: Gregory B. Maffei, Chairman of the SiriusXM Board of Directors, David A. Blau, Eddy W. Hartenstein, Robin P. Hickenlooper, James P. Holden, Evan D. Malone, James E. Meyer, Jonelle Procope, Michael Rapino, Kristina M. Salen, Carl E. Vogel and David M. Zaslav, all of whom are members of SiriusXM’s Board of Directors, Jennifer Witz, SiriusXM’s, Chief Executive Officer and Director, and Thomas D. Barry, SiriusXM’s Chief Financial Officer. Information regarding the SiriusXM Participants, including a description of their direct or indirect interests, by security holdings or otherwise, can be found under the caption “Security Ownership of Certain Beneficial Owners and Management—Security Ownership of Management of Sirius XM Holdings” contained in the Registration Statement and which is available at: https://www.sec.gov/Archives/edgar/data/2003397/000110465924007830/tm243744-1_s4.htm#tSOOM1. To the extent that certain SiriusXM Participants or their affiliates have acquired or disposed of security holdings since the “as of” date disclosed in the Registration Statement, such transactions have been or will be reflected on Statements of Change in Ownership on Form 4, which are available at: https://www.sec.gov/edgar/browse/?CIK=908937&owner=exclude. Additional information regarding certain of the SiriusXM Participants in the proxy solicitation and a description of their interests will be contained in the information statement and other relevant materials to be filed with the SEC in respect of the contemplated transactions when they become available. These documents can be obtained free of charge from the sources indicated above.

 

 

Hooper Stevens

212.901.6718

Hooper.Stevens@siriusxm.com

Natalie Diana Candela

212.901.6672

Natalie.Candela@siriusxm.com

Jessica Casano-Antonellis

212.901.6767

Jessica.Casano@siriusxm.com