- Self-Pay Net Subscriber Additions of One Million-Plus for 10th Consecutive Year

- 2019 Revenue Increased to $7.8 Billion; Pro Forma Revenue Increased 8% to $7.9 Billion

- Full-Year Net Income of $914 Million; Diluted EPS of $0.20

- Adjusted EBITDA Hits Record $2.4 Billion, up 14%

- Capital Returns in 2019 Totaled $2.4 Billion

- SiriusXM Confirms 2020 Guidance

NEW YORK, Feb. 4, 2020 /PRNewswire/ -- SiriusXM today announced fourth quarter and full-year 2019 operating and financial results, including revenue of $2.1 billion and $7.8 billion, respectively, increasing 38% and 35% compared to the prior year periods. Revenue was boosted by the acquisition of Pandora Media on February 1, 2019. The Company's net income declined 3% to $243 million in the fourth quarter, while full-year net income totaled $914 million, down from $1.2 billion in 2018 due to higher acquisition, refinancing, and depreciation and amortization expenses in 2019. Net income per diluted common share was $0.05 in the fourth quarter, compared to $0.06 in the prior year period, while full-year 2019 net income per diluted share declined to $0.20 from $0.26 in 2018." 

On a pro forma basis, fourth quarter revenue grew 6% from $1.9 billion and full-year revenue climbed 8% from $7.3 billion in the prior year periods. Adjusted EBITDA in the fourth quarter totaled $587 million, down from $593 million in the prior year period. For the full-year, adjusted EBITDA grew 14% to $2.4 billion, resulting in an adjusted EBITDA margin of 30.6%, an improvement of approximately 160 basis points from 2018. The improvement in adjusted EBITDA margin was driven primarily by revenue growth across the business and cost efficiencies in subscriber acquisition costs and revenue share and royalties. Pro forma figures assume the Pandora acquisition closed on January 1, 2018.

"I am so proud of SiriusXM's milestone performance last year. Not only did we achieve our 10th consecutive year of one million-plus self-pay net additions, but we successfully completed the acquisition of Pandora Media and drove each business to record-high financial performance. Looking forward to 2020, we're excited about a new decade of opportunity before us and confident in reiterating our guidance for the year," said Jim Meyer, Chief Executive Officer, SiriusXM.

"In programming, our lifeblood, we continue to work with an increasing array of megastars and brands that have real value for SiriusXM subscribers and Pandora listeners. In the lead-up to the Super Bowl, The Chainsmokers and Lizzo played separate exclusive concerts on back-to-back nights in Miami Beach as part of our new Opening Drive Super Concert Series. Coldplay did a special stripped-down set at our new Hollywood studios for subscribers, and we announced the launch of a new SiriusXM channel and exclusive Pandora content from superstars U2, called U2X Radio, which will debut this year," added Meyer.

FULL-YEAR 2019 HIGHLIGHTS

SiriusXM operates two complementary audio entertainment businesses — our SiriusXM business and our Pandora business. 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, 2019. The pro forma financial and operating highlights of these two segments are presented separately below and exclude the impact of share-based payment expense.

SIRIUSXM

• Self-Pay Subscribers Near 30.0 Million.SiriusXM added approximately 1.1 million net new self-pay subscribers for the full-year to end 2019 with nearly 30.0 million self-pay subscribers. Total net subscriber additions were 870,000, resulting in more than 34.9 million total SiriusXM subscribers at the end of the period. Paid promotional subscribers decreased due to declines in shipments from automakers offering paid promotional subscriptions. The total trial funnel stood at approximately 9.3 million at the end of 2019, up from approximately 9.1 million at the end of 2018. Self-pay monthly churn for 2019 was 1.7%, approximately flat from 2018.
• SiriusXM Revenue of $6.2 Billion.Full-year 2019 revenue grew 7% to a record $6.2 billion. This growth was driven by a 3% increase in total SiriusXM subscribers and 4% growth in SiriusXM's average revenue per user (ARPU) to $13.82.
• Gross Profit Grows 7%.Total cost of services at SiriusXM increased 8% to $2.4 billion for the full-year, driven primarily by higher revenue share and royalties and programming and content expenses. Gross profit at SiriusXM in 2019 totaled $3.8 billion, increasing 7% over 2018, and produced a gross margin of 62%, flat compared to the prior year.
• New Programming, New Technology. SiriusXM recently announced the launch of our collaboration with UNINTERRUPTED, the athlete-empowered brand founded by LeBron James and Maverick Carter, for exclusive athlete playlists that debuted on Pandora. Andy Cohen signed multi-year extension for his news-making Radio Andy channel, and Phish performed an exclusive concert in Philadelphia on its full-time SiriusXM channel. At the 2020 Consumer Electronics Show, SiriusXM demonstrated an e-commerce suite for drivers with VISA, introduced a new aftermarket radio with 360L features, and earlier made SiriusXM available for the first time on Google home smart speakers and devices.

PANDORA

• Advertising Revenue Hits Record $1.2 Billion.Full-year ad revenue at Pandora reached a record $1.2 billion, growing 10%over 2018. Ad revenue was driven by strong monetization of $80 per thousand hours, growing 12% over the prior year. Strength in traditional audio advertising, boosted by video programmatic and engagement-based video, as well as the expansion of off-platform efforts and fees generated on the AdsWizz platform drove revenue growth. Total revenue for Pandora grew 10% to $1.7 billion for the year, aided in part by a 10% increase in subscriber revenue to $527 million.
• Total Ad Supported Listener Hours of 13.4 Billion.Monthly Active Users (MAUs) at Pandora were 63.5 million at the end of 2019, down from 69.4 million in the prior year. Total ad supported listener hours were 13.4 billionin 2019, down from 14.8 billion in 2018.
• Self-Pay Net Adds of 251,000. Pandora added 251,000 net new self-pay subscribers to its Pandora Plus and Pandora Premium service in 2019 to end the year with nearly 6.2 million self-pay subscribers. Paid promotional subscribers declined to 49 thousand, from 756 thousand in 2018, as a result of a reduction in paid promotional subscriptions due to the expiration of an agreement with T-Mobile in the third quarter of 2019. This brought total Pandora subscribers at year-end to 6.2 million.
• Gross Profit Grows 28%.Total cost of services at Pandora in 2019 of $1.1 billion increased 2% compared with 2018. This resulted in gross profit at Pandora of $624 million, up 28% over 2018, and produced a gross margin for the year of 36%, growing approximately 500 basis points from 31% in the prior year. This expansion was driven primarily by lower revenue share and royalties and customer service and billing expenses as a percentage of revenue.

"SiriusXM returned nearly $2.4 billion of capital to stockholders in 2019. We repurchased more than 364 million shares last year and paid approximately $226 million in dividends to stockholders. At year-end, our debt to adjusted EBITDA ratio was 3.2 times and we had the entire $1.75 billion available on our revolving credit facility. This gives us ample liquidity to continue investing in our business while returning capital to stockholders," noted David Frear, Chief Financial Officer, SiriusXM.

2020 GUIDANCE

The Company's full-year 2020 guidance for self-pay net subscriber additions, revenue, adjusted EBITDA and free cash flow, as issued on January 7, 2020, is reiterated as follows:

• SiriusXM self-pay net subscriber additions over 900,000,
• Total revenue of approximately $8.1 billion,
• Adjusted EBITDA approximately $2.5 billion, and
• Free cash flow of approaching $1.7 billion.

CAPITAL RETURN PROGRAM

Shares of common stock may be purchased from time to time on the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act of 1934, as amended, in privately negotiated transactions, including in accelerated stock repurchase transactions and transactions with Liberty Media and its affiliates, or otherwise. The Company expects to fund the repurchases through a combination of cash on hand, cash generated by operations and future borrowings. The size and timing of these purchases will be based on a number of factors, including price and business and market conditions.

The Company's dividend policy may change at any time without notice to stockholders. The declaration and payment of dividends is at the discretion of the Company's Board of Directors in accordance with applicable law after taking into account various factors, including the Company's financial condition, operating results, current and anticipated cash needs, limitations imposed by its indebtedness, legal requirements and other factors that the Board of Directors deems relevant.

FOURTH QUARTER AND FULL-YEAR 2019 RESULTS
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	For the Three Months Ended December 31,								For the Twelve Months Ended December 31,
(in millions, except per share data)	2019				2018				2019				2018
	(Unaudited)				(Unaudited)
Revenue:
Subscriber revenue	$	1,569			$	1,361			$	6,120			$	5,264
Advertising revenue	403				53				1,336				188
Equipment revenue	46				42				173				155
Other revenue	44				40				165				164
Total revenue	2,062				1,496				7,794				5,771
Operating expenses:
Cost of services:
Revenue share and royalties	607				337				2,291				1,394
Programming and content	124				103				462				406
Customer service and billing	123				98				475				382
Transmission	53				26				170				96
Cost of equipment	9				9				29				31
Subscriber acquisition costs	114				118				427				470
Sales and marketing	289				140				937				484
Engineering, design and development	74				34				280				123
General and administrative	145				90				524				354
Depreciation and amortization	124				79				468				301
Acquisition and other related costs	1				3				84				3
Total operating expenses	1,663				1,037				6,147				4,044
Income from operations	399				459				1,647				1,727
Other (expense) income:
Interest expense	(99)				(87)				(390)				(350)
Loss on extinguishment of debt	—				—				(57)				—
Other (expense) income	(1)				(38)				(3)				44
Total other (expense) income	(100)				(125)				(450)				(306)
Income before income taxes	299				334				1,197				1,421
Income tax expense	(56)				(83)				(283)				(245)
Net income	$	243			$	251			$	914			$	1,176
Foreign currency translation adjustment, net of tax	5				(19)				14				(29)
Total comprehensive income	$	248			$	232			$	928			$	1,147
Net income per common share:
Basic	$	0.05			$	0.06			$	0.20			$	0.26
Diluted	$	0.05			$	0.06			$	0.20			$	0.26
Weighted average common shares outstanding:
Basic	4,419				4,401				4,501				4,462
Diluted	4,541				4,478				4,616				4,561
Dividends declared per common share	$	0.01331			$	0.01210			$	0.04961			$	0.04510

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
	As of December 31,
(in millions, except per share data)	2019				2018
ASSETS
Current assets:
Cash and cash equivalents	$	106			$	54
Receivables, net	670				233
Inventory, net	11				22
Related party current assets	22				11
Prepaid expenses and other current assets	194				158
Total current assets	1,003				478
Property and equipment, net	1,626				1,513
Intangible assets, net	3,467				2,501
Goodwill	3,843				2,290
Related party long-term assets	452				960
Deferred tax assets	153				293
Operating lease right-of-use assets	466				—
Other long-term assets	139				138
Total assets	$	11,149			$	8,173
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	1,151			$	736
Accrued interest	160				128
Current portion of deferred revenue	1,930				1,932
Current maturities of debt	2				3
Operating lease current liabilities	46				—
Related party current liabilities	4				4
Total current liabilities	3,293				2,803
Long-term deferred revenue	130				149
Long-term debt	7,842				6,885
Related party long-term liabilities	—				4
Deferred tax liabilities	70				47
Operating lease liabilities	456				—
Other long-term liabilities	94				102
Total liabilities	11,885				9,990
Stockholders' equity (deficit):
Common stock, par value $0.001 per share; 9,000 shares authorized; 4,412 and 4,346 shares issued; 4,412 and 4,346 outstanding at December 31, 2019 and December 31, 2018, respectively	4				4
Accumulated other comprehensive income (loss), net of tax	8				(6)
Additional paid-in capital	395				242
Treasury stock, at cost; 0 and 0 shares of common stock at December 31, 2019 and December 31, 2018, respectively	—				—
Accumulated deficit	(1,143)				(2,057)
Total stockholders' equity (deficit)	(736)				(1,817)
Total liabilities and stockholders' equity (deficit)	$	11,149			$	8,173