Provides 2025 Revenue, Adjusted EBITDA and
Free Cash Flow Guidance as well as 2027 Free Cash Flow
Target
Announces Additional $200 Million of Annualized Savings Exiting
2025
NEW
YORK, Dec. 10, 2024 /PRNewswire/ -- Sirius XM
Holdings Inc. (NASDAQ: SIRI) today shared an updated strategic
plan, which sharpens the Company's focus on its core subscription
business; leverages the strength of its advertising business across
its portfolio; accelerates efficiency throughout the organization;
and emphasizes robust margins, free cash flow generation, and
stockholder returns.
"At SiriusXM, we are focusing on the strengths that set us apart
– including our strong core subscriber base, our unique position in
vehicle, and our unrivaled, curated content -- and taking steps to
drive profitability and cash flow as we face marketplace headwinds
impacting the company's growth trajectory," said Jennifer Witz, Chief Executive Officer of
SiriusXM. "We have a clear path forward and are confident we can
deliver for our stockholders."
Sharpening Strategic Focus on the Company's Strengths &
Differentiators to Drive Stockholder Value
SiriusXM's premium offerings stand alone in audio entertainment,
and the Company is highlighting key actions it will take to lean
into its differentiated position as it charts its path forward.
- Doubling Down on SiriusXM's Core Automotive Subscriber
Segment: SiriusXM's position in-vehicle remains unrivaled in
audio entertainment, reflected in its leading in-car share of
ear1. As 90% of SiriusXM's subscribers have the service
embedded in-car today, the Company is focusing its resources on
increasing retention and capturing additional growth opportunities
within this valuable segment that underpins its scaled subscriber
base. As a part of this effort, the Company will shift marketing
and other resources away from high-cost, high-churn audiences in
streaming to focus resources on core revenue-generating
segments.
- Utilizing Streaming as a Companion to the Company's Core
Automotive Offering: The investments the Company has made over
the past two years have expanded the service's reach and engagement
in and out of the vehicle, and SiriusXM will continue to highlight
the value-added benefits of the app to its core subscribers.
SiriusXM will also utilize the streaming platform for automotive
distribution where beneficial, both in support of the Company's
growing population of IP and satellite enabled vehicles with 360L
and as evidenced by its recent inclusion in the 2024 Tesla Holiday
Update. By integrating SiriusXM's streaming solution into Tesla's
IP-enabled operating system, SiriusXM is rapidly expanding access
to its service to more than two million vehicles already on the
road, opening up a valuable new segment of its core audience in
some of the most popular vehicles in North America.
- Curating Unrivaled Content: SiriusXM's biggest
competitive advantage remains its premium, exclusive, live and
on-demand content from its roster of top talent and subject-matter
experts. The Company will continue cultivating deep connections
between fans and hosts, with future investments centered on the
major differentiators that resonate with its core, including: its
human curated and hosted music channels, unmatched depth and
breadth of live sports, extensive bench of leading audio talent,
and growing podcast network.
- Leveraging the Company's Advertising Strength: The
Company will leverage its leadership position in ad-supported
audio, both within Pandora and podcasting, to monetize ad-based
experiences in its flagship SiriusXM service, and will prioritize
adtech investments that simplify campaign planning, purchasing, and
measurement for advertiser campaigns across its portfolio.
Additionally, long-term, the Company plans to capitalize on its
automotive expertise and prowess to launch first-to-market,
integrated, addressable in-car ad experiences.
- Increasing Efficiency: Following the successful
implementation of cost-reduction efforts across various business
units as well as a period of high re-investment in product
infrastructure, SiriusXM is further optimizing efficiencies in key
areas across the business. The Company is scrutinizing the lifetime
value of subscribers, optimizing marketing efforts for higher
returns, aligning content investments with its strategic and
profitability goals, and closely monitoring the return on
technology investments to drive greater operational efficiency and
enhance the listener experience. To date, the Company has delivered
an aggregate of approximately $350
million of run rate savings in 2023 and 2024, and will
target an initial incremental $200
million of annualized savings exiting 2025.
Capital Allocation Priorities to Drive Stockholder
Returns
The Company's strategic actions are focused on preserving its
strong balance sheet, maintaining leading margins, and optimizing
free cash flow. These actions will enable SiriusXM to prioritize
deleveraging in the near-term while simultaneously enhancing
stockholder returns.
- Continuing Planned Deleveraging: Following the
retirement of 12% of its outstanding common stock and the addition
of $1.7 billion of debt as a result
of the Liberty Media split-off transactions, the Company remains
committed to its leverage target of low-to-mid 3 times adjusted
EBITDA. Without giving effect to any opportunistic share
repurchases, SiriusXM expects to reduce its debt by approximately
$700M in 2025 and achieve a leverage
ratio of 3.6x by year end 2025.
- Maintaining Dividend: The Board of Directors of SiriusXM
remains committed to its current quarterly dividend of $0.27 per share, or $1.08 per share annually, currently returning
more than $350 million to
stockholders per year.
- Stock Buyback Authorization: The Board authorized
$1.166 billion common stock
repurchase program remains in place. The timing and amount of any
shares repurchased will be determined based on SiriusXM's
evaluation of market conditions and other factors and the program
may be discontinued or suspended at any time. Repurchases will be
made in compliance with all SEC rules and other legal requirements
and may be made in part under a Rule 10b5-1 plan, which permits
stock repurchases when SiriusXM might otherwise be precluded from
doing so.
2025 Outlook
In conjunction with today's update, SiriusXM is providing 2025
guidance for total revenue of $8.5
billion, adjusted EBITDA of $2.6
billion, and free cash flow of $1.15
billion. This follows the Company's reaffirmation of its
2024 guidance for total revenue of approximately $8.675 billion, adjusted EBITDA of approximately
$2.7 billion, and free cash flow of
approximately $1 billion. Aligned
with its enhanced focus on free cash flow, the Company expects free
cash flow conversion, free cash flow as a percentage of EBITDA, to
increase from approximately 37% in 2024 to approximately 44% in
2025. Additionally, the Company is targeting free cash flow of
$1.5 billion in 2027.
The Company excludes from adjusted EBITDA the impact of other
income (expense), gain on extinguishment of debt, impairment,
restructuring and other costs, other non-cash charges such as
share-based payment expense, and legal settlements and reserves (if
applicable). Similarly, free cash flow does not include certain
items that do not relate to the on-going performance of the
Company's business, such as cash flows related to acquisitions,
strategic and short-term investments, including tax efficient
investments in clean energy. Free cash flow may also be negatively
impacted by legal settlements which are excluded from adjusted
EBITDA.
Adjusted EBITDA and free cash flow are non-GAAP financial
measures. The Company has not provided a reconciliation of adjusted
EBITDA to projected net income (loss) or free cash flow to net cash
provided by operating activities because full-year net income
(loss) and net cash provided by operating activities will include
special items that have not occurred and are difficult to predict
with reasonable certainty. Due to this uncertainty, the Company
cannot reconcile adjusted EBITDA and free cash flow to their
comparable GAAP measures without unreasonable effort.
Chief Operating Officer Appointment
As a part of this effort, SiriusXM has appointed Wayne D. Thorsen, former Executive Vice
President and Chief Business Officer at ADT Inc., to serve as
SiriusXM's Executive Vice President and Chief Operating Officer,
effective December 16. In the
newly-created role, Thorsen will oversee SiriusXM's product and
technology functions and be responsible for aspects of the
Company's commercial activities, as well as business development,
certain consumer marketing activities, and corporate strategy. With
his depth of experience driving business development and innovation
at a variety of leading companies including ADT, Google Inc., and
Social Finance, Inc., Thorsen is well-positioned to help SiriusXM
deliver meaningful results alongside greater efficiency.
SiriusXM also disclosed today that Joseph Inzerillo has stepped down from his role
as Chief Product and Technology Officer, effective immediately, to
pursue other opportunities.
About Sirius XM Holdings Inc.
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.
This communication contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, but are not limited to,
statements about future financial and operating results, our plans,
objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified
by words such as "will likely result," "are expected to," "will
continue," "is anticipated," "estimated," "believe," "intend,"
"plan," "projection," "outlook" or words of similar meaning. Such
forward-looking statements are based upon the current beliefs and
expectations of our management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally
beyond our control. Actual results and the timing of events may
differ materially from the results anticipated in these
forward-looking statements.
The following factors, among others, could cause actual
results and the timing of events to differ materially from the
anticipated results or other expectations expressed in the
forward-looking statements: Risks Relating to our Business and
Operations: We face substantial competition and that
competition is likely to increase over time; if our efforts to
attract and retain subscribers and listeners, or convert listeners
into subscribers, are not successful, our business will be
adversely affected; we engage in extensive marketing efforts and
the continued effectiveness of those efforts is an important part
of our business; we rely on third parties for the operation of our
business, and the failure of third parties to perform could
adversely affect our business; we are migrating our billing system
and payment processing function to a new service provider; failure
to successfully monetize and generate revenues from podcasts and
other non-music content could adversely affect our business,
operating results, and financial condition; we may not realize the
benefits of acquisitions or other strategic investments and
initiatives; the impact of economic conditions may adversely affect
our business, operating results, and financial condition; and we
may be adversely affected by the war in Ukraine. Risks Relating to our Sirius XM
Business: A substantial number of our Sirius XM service
subscribers periodically cancel their subscriptions and we cannot
predict how successful we will be at retaining customers; our
ability to profitably attract and retain subscribers to our Sirius
XM service is uncertain; our business depends in part upon the auto
industry; failure of our satellites would significantly damage our
business; and our Sirius XM service may experience harmful
interference from wireless operations. Risks Relating to our
Pandora and Off-platform Business: Our Pandora ad-supported
business has suffered a substantial and consistent loss of monthly
active users, which may adversely affect our Pandora and
Off-platform business; our Pandora and Off-platform business
generates a significant portion of its revenues from advertising,
and reduced spending by advertisers could harm our business; our
failure to convince advertisers of the benefits of our Pandora
ad-supported service could harm our business; if we are unable to
maintain revenue growth from our advertising products our results
of operations will be adversely affected; changes to mobile
operating systems and browsers may hinder our ability to sell
advertising and market our services; and if we fail to accurately
predict and play music, comedy or other content that our Pandora
listeners enjoy, we may fail to retain existing and attract new
listeners. Risks Relating to Laws and Governmental
Regulations: Privacy and data security laws and regulations may
hinder our ability to market our services, sell advertising and
impose legal liabilities; consumer protection laws and our failure
to comply with them could damage our business; failure to comply
with FCC requirements could damage our business; environmental,
social and governance expectations and related reporting
obligations may expose us to potential liabilities, increased
costs, reputational harm, and other adverse effects; and we may
face lawsuits, incur liability or suffer reputational harm as a
result of content published or made available through our services.
Risks Associated with Data and Cybersecurity and the Protection
of Consumer Information: If we fail to protect the security of
personal information about our customers, we could be subject to
costly government enforcement actions and private litigation and
our reputation could suffer; we use artificial intelligence in our
business, and challenges with properly managing its use could
result in reputational harm, competitive harm, and legal liability
and adversely affect our results of operations; and interruption or
failure of our information technology and communications systems
could impair the delivery of our service and harm our business.
Risks Associated with Certain Intellectual Property Rights:
The market for music rights is changing and is subject to
significant uncertainties; our Pandora services depend upon
maintaining complex licenses with copyright owners, and these
licenses contain onerous terms; failure to protect our intellectual
property or actions by third parties to enforce their intellectual
property rights could substantially harm our business and operating
results; some of our services and technologies may use "open
source" software, which may restrict how we use or distribute our
services or require that we release the source code subject to
those licenses; and rapid technological and industry changes and
new entrants could adversely impact our services. Other
Operational Risks: If we are unable to attract and retain
qualified personnel, our business could be harmed; our facilities
could be damaged by natural catastrophes or terrorist activities;
the unfavorable outcome of pending or future litigation could have
an adverse impact on our operations and financial condition; we may
be exposed to liabilities that other entertainment service
providers would not customarily be subject to; and our business and
prospects depend on the strength of our brands. Risks Related to
the Transactions: We may have a significant indemnity
obligation to Liberty Media, which is not limited in amount or
subject to any cap, if the transactions associated with the
Split-Off are treated as a taxable transaction; we may determine to
forgo certain transactions that might otherwise be advantageous in
order to avoid the risk of incurring significant tax-related
liabilities; we may not realize the potential benefits from the
Transactions in the near term or at all; we have assumed and are
responsible for all of the liabilities attributed to the Liberty
SiriusXM Group as a result of the completion of the Transactions,
and acquired the assets of Liberty Sirius XM Holdings Inc. on
an "as is, where is" basis; we may
be a target of securities class action and derivative lawsuits in
connection with the Transactions; it may be difficult for a third
party to acquire us, even if doing so may be beneficial to our
stockholders; we have overlapping directors with Liberty Media,
which may lead to conflicting interests; our directors and officers
are protected from liability for a broad range of actions; our
holding company structure could restrict access to funds of its
subsidiaries that may be needed to pay third party obligations; on
a standalone basis and on a consolidated basis, we have significant
indebtedness, and our subsidiaries' debt
contains certain covenants that restrict its operations; and our
ability to incur additional indebtedness to fund our operations
could be limited, which could negatively impact its
operations. Additional factors that could cause our
results to differ materially from those described in the
forward-looking statements can be found in the prospectus filed
with the Securities and Exchange Commission (the "SEC") on July 23,
2024, which forms part of Liberty Sirius XM Holdings Inc.'s
Registration Statement on Form S-4 (File No. 333-276758) and
available at the SEC's Internet site (http://www.sec.gov). The
information set forth herein speaks only as of the date hereof, and
we disclaim any intention or obligation to update any forward
looking statements as a result of developments occurring after the
date of this communication.
1 2024 Edison Research Share of Ear Data
Source: SiriusXM
Investor Contacts:
Hooper Stevens
212-901-6718
hooper.stevens@siriusxm.com
Natalie Candela
212-901-6672
natalie.candela@siriusxm.com
Media Contact:
Maggie
Mitchell
maggie.mitchell@siriusxm.com
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SOURCE Sirius XM Holdings Inc.