Sirius XM Holdings Inc. (SIRI - Analyst Report) reported strong financial numbers in the fourth quarter of 2014, registering record-high adjusted EBITDA and revenues. 

Quarterly GAAP net income came in at $143.1 million or 3 cents a share compared with $65.2 million or 1 cent in the prior-year quarter. Moreover, earnings of 3 cents were in line with the Zacks Consensus Estimate. Meanwhile, total revenue of $1,091 million exhibited annualized growth of 9.1% and also outshined the Zacks Consensus Estimate of $1,079 million.

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Quarterly total operating expenses stood at $797.3 million, up 5.6% year over year. Operating income, in the reported quarter, was around $293.7 million, highlighting a 19.7% from the last-year quarter. Sirius XM posted record fourth-quarter adjusted EBITDA growth of 17%, reaching the $381 million. 

At the end of 2014, Sirius XM had $1,253.3 million of cash from operations compared with $1,102.8 million at 2013-end. Quarterly free cash flow in the same period stood at $1,131.6 million against $929.2 million in the year-ago quarter.

At the end of the reported quarter, Sirius XM had nearly $147.7 million of cash and cash equivalents and $4,493.9 million of outstanding debt compared with $134.8 million and $3,093.8 million, respectively, at the end of 2013. The debt-to-capitalization ratio stood at 0.77 against 0.53 at the end of 2013.

Segment Wise Results

Quarterly Subscriber revenues were $922.2 million, up 8.2% year over year. Advertising revenues stood at $28 million, up 10.2% year over year. Equipment revenues were $29.9 million, up 15% year over year. Other revenues were $110.9 million, up 15.4% year over year.

Subscriber Statistics

In the fourth quarter of 2014, Sirius XM added 576,689 subscribers which reached the company’s total subscriber base to 27,311,087 as of Dec 31, 2014, up 6.9% year over year. Payment category wise, Self-Pay subscribers totaled 22,522,638 (up 6.8% year over year) while Paid Promotional subscribers were 4,788,449 (up 6.9% year over year).

Important Operating Metrics

Despite intensifying competition from Google Inc. (GOOG), Apple (AAPL - Analyst Report) and Pandora Inc. (P - Snapshot Report), SIRIUS XM’s average revenue per user stood at $12.49 in the quarter compared with $12.31in the year-ago quarter. Average self-pay monthly churn rate was 1.8% against 1.9% in the prior-year quarter. New Vehicle Customer Conversion rate came in at 40% versus 42% in the year-earlier quarter. Subscriber acquisition cost stood at $33 compared with $34 in the year-ago quarter.

Financial Outlook

Management expects full-year 2015 revenues at around $4.4 billion while adjusted EBITDA is projected to be roughly $1.6 billion. Meanwhile, free cash flow will likely stand at $1.25 billion. Also, the company estimates an addition of 1.2 million net new subscribers in 2015. 

Sirius XM currently has a Zacks Rank #3 (Hold).