SIRIUS XM Holdings Inc. (SIRI - Analyst Report) reported first-quarter 2015 financial numbers wherein both the top and the bottom lines missed the Zacks Consensus Estimate. The company registered record-high adjusted EBITDA in the quarter. SIRIUS XM also raised the revenue and subscriber gain guidance for 2015 and retained the previous outlook for free cash flow and EBITDA.
Quarterly net income came in at $105.7 million or 2 cents a share compared with $94.1 million or 2 cents in the prior-year quarter. Moreover, earnings of 2 cents missed the Zacks Consensus Estimate by a penny. Meanwhile, total revenue of $1,081 million exhibited annualized growth of 8.3% and was also above the Zacks Consensus Estimate of $1,074 million.
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Quarterly total operating expenses stood at $767.2 million, up 2.3% year over year. Operating income, in the reported quarter, was around $313.8 million, highlighting 26.8% growth from the last-year quarter. SIRIUS XM posted record first-quarter adjusted EBITDA growth of 19.2% to reach $399.2 million.
At the end of the first quarter of 2015, SIRIUS XM had $310 million of cash from operations compared with $251.4 million at 2014-end. Quarterly free cash flow in the same quarter stood at $280.2 million against $222.8 million in the year-ago quarter.
At the end of the quarter under review, SIRIUS XM had nearly $482 million of cash and cash equivalents and $5,101.9 million of outstanding debt compared with $147.7 million and $4,493.9 million, respectively, at the end of 2014. The debt-to-capitalization ratio stood at 0.85 against 0.77 at the end of 2014.
Segment Wise Results
Quarterly Subscriber revenues totaled $911.5 million, up 7.1% year over year. Advertising revenues stood at $26.9 million, up 21.2% year over year. Equipment revenues were $24.8 million, up 3.3% year over year. Other revenues were $117.8 million, up 17.7% year over year.
Subscriber Statistics
In the first quarter of 2015, SIRIUS XM added 431,000 subscribers which took the company’s total subscriber base to 27,742,000 as of Mar 31, 2015, up 7.4% year over year. Payment category wise, Self-Pay subscribers totaled 22,917,000 (up 7.8% year over year) while the Paid Promotional subscriber count stood at 4,826,000 (up 5.6% year over year).
Important Operating Metrics
Despite intensifying competition from Google Inc. , Apple (AAPL - Analyst Report) and Pandora Inc. (P - Snapshot Report), SIRIUS XM’s average revenue per user stood at $12.26 in the quarter compared with $12.18 in 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 $35 in the year-ago quarter.
Financial Outlook
Management expects full-year 2015 revenues at around $4.47 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 1.4 million new subscribers in 2015.
SIRIUS XM currently has a Zacks Rank #3 (Hold).
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