SIRIUS XM HOLDINGS INC
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
SIRI$32.40-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-30.
0000908937-24-000014
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0000908937-24-000021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 228 previous paragraphs and 237 current paragraphs.
164 unchanged; 52 reworded; 20 added; 12 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
On June 16, 2024, Holdings entered into amendments (the “Amendments”) to (i) the Reorganization Agreement and the Merger Agreement. The Amendments, among other things, ratably adjust the exchange ratios in each of the Reorganization Agreement and the Merger Agreement in connection with the Transactions to reduce the total number of outstanding shares of New Sirius common stock, par value $0.001 per share (“New Sirius Common Stock”), following the consummation of the Transactions. The revised exchange ratio in the Reorganization Agreement reduces by 90% the number of shares of New Sirius Common Stock that otherwise would have been issued to holders of Liberty SiriusXM Common Stock (as defined below). As a result of the revised exchange ratio under the Merger Agreement, each existing holder of SiriusXM common stock, par value $0.001 per share (“SiriusXM Common Stock”), will receive 1 share in New Sirius for every 10 shares of SiriusXM Common Stock it holds as of immediately prior to the consummation of the Transactions, with cash paid in lieu of fractional shares.
Current report
These changes to the exchange ratios affect SiriusXM stockholders and holders of shares of LSXMA, LSXMB and LSXMK uniformly and will not alter any such stockholder’s percentage interest in the outstanding shares of New Sirius Common Stock as of immediately following the consummation of the Transactions, except to the extent that it results in some stockholders receiving cash in lieu of owning a fractional share of New Sirius Common Stock as described above.
Current report
In addition, in order to facilitate the Transactions, Sirius XM Radio Inc., a Delaware corporation, intends to convert under Delaware state law to a Delaware limited liability company prior to the closing of the Transaction.
Current report
The Amendments were approved by Liberty’s Board of Directors, the SiriusXM Special Committee and SiriusXM’s Board of Directors. Liberty’s Board of Directors has recommended that holders of shares of LSXMA and LSXMB vote in favor of the Split-Off, as it has been amended. Additionally, in connection with the execution of the Amendments, Liberty Radio, LLC, a wholly owned subsidiary of Liberty Media that holds a majority of the outstanding shares of SiriusXM common stock, in its capacity as stockholder of SiriusXM, delivered to SiriusXM a written consent pursuant to Section 228 of the General Corporation Law of the State of Delaware, approving and adopting the Amendments. As a result, no meeting of the stockholders of SiriusXM will be held in connection with the Amendments.
Current report
Assuming satisfaction of all conditions to closing, the Transactions are expected to be completed after the close of business on Monday, September 9, 2024.
Current report
Total Consolidated Revenuefor the three months ended June 30, 2024 and 2023 was $2,178 and $2,250, respectively, a decrease of 3%, or $72. Total Consolidated Revenue for the six months ended June 30, 2024 and 2023 was $4,340 and $4,394, respectively, a decrease of 1%, or $54.
Current report
For the three months ended June 30, 2024 and 2023, revenue share and royalties were $317 and $327, respectively, a decrease of 3%, or $10, and decreased as a percentage of total Pandora and Off-platform revenue. For the six months ended June 30, 2024 and 2023, revenue share and royalties were $625 and $636, respectively, a decrease of 2%, or $11, and decreased as a percentage of total Pandora and Off-platform revenue. The decreases were primarily due to lower revenue share related to podcasts.
Current report
For the three months ended June 30, 2024 and 2023, programming and content expenses were $13 and $18, respectively, a decrease of 28%, or $5, and decreased as a percentage of total Pandora and Off-platform revenue. For the six months ended June 30, 2024 and 2023, programming and content expenses were $30 and $32, respectively, a decrease of 6%, or $2, and decreased as a percentage of total Pandora and Off-platform revenue. The decrease for the three month period was primarily attributable to lower live event, personnel-related and license fee costs. The decrease for the six month period was primarily attributable to lower license fee and personnel-related costs.
Current report
For the three months ended June 30, 2024 and 2023, customer service and billing expenses were $21 and $23, respectively, a decrease of 9%, or $2, and decreased as a percentage of total Pandora and Off-platform revenue. For the six months ended June 30, 2024 and 2023, customer service and billing expenses were $40 and $43, respectively, a decrease of 7%, or $3, and decreased as a percentage of total Pandora and Off-platform revenue. The decreases were driven by lower bad debt expense primarily during the quarter ended June 30, 2024.
Current report
For the three months ended June 30, 2024 and 2023, transmission expenses were $8 and $9, respectively, a decrease of 11%, or $1, and decreased as a percentage of total Pandora and Off-platform revenue. For the six months ended June 30, 2024 and 2023, transmission expenses were $16 and $17, respectively, a decrease of 6%, or $1, and decreased as a percentage of total Pandora and Off-platform revenue. The decreases were driven by lower bandwidth costs.
Current report
For the three months ended June 30, 2024 and 2023, subscriber acquisition costs were $92 and $93, respectively, a decrease of 1%, or $1, but increased as a percentage of total revenue. For the six months ended June 30, 2024 and 2023, subscriber acquisition costs were $182 and $183, respectively, a decrease of 1%, or $1, but increased as a percentage of total revenue. The decreases were driven by lower hardware subsidies driven by installations as well as lower commission and hardware subsidy rates.
Current report
We expect our general and administrative expenses, excluding litigation insurance recoveries, to remain relatively flat as higher technology and consulting costs will be offset by lower personnel-related costs.
Current report
For the three months ended June 30, 2024 and 2023, depreciation and amortization expense was $133 and $139, respectively. For the six months ended June 30, 2024 and 2023, depreciation and amortization expense was $273 and $275, respectively. The decreases were associated with certain acquired intangible assets that reached the end of their useful lives, partially offset by higher capitalized software and hardware.
Current report
(1) Pandora and Off-platform self-pay subscribers includes Cloud Cover subscribers of 51 and 41 as of June 30, 2024 and 2023, respectively.
Current report
(2) Pandora and Off-platform self-pay subscriber net additions includes Cloud Cover net additions of 3 and 1 for the three months ended June 30, 2024 and 2023, respectively, and 6 and 4 for the six months ended June 30, 2024 and 2023, respectively.
Current report
Subscribers. At June 30, 2024, Pandora had approximately 5,951 subscribers, a decrease of 319, or 5%, from the approximately 6,270 subscribers as of June 30, 2023.
Current report
For each of the three months ended June 30, 2024 and 2023, adjusted EBITDA was $702. For the six months ended June 30, 2024 and 2023, adjusted EBITDA was $1,352 and $1,327, respectively, an increase of 2%, or $25. For the three month period adjusted EBITDA was flat as lower subscriber revenue and higher sales and marketing costs were offset by lower costs of services, personnel-related costs, and general and administrative expenses. The increase for the six month period was primarily driven by lower general and administrative expenses, costs of services, personnel-related costs and higher advertising revenue, partially offset by lower subscriber revenue.
Current report
For the three months ended June 30, 2024 and 2023, free cash flow was $343 and $323, respectively, an increase of 6%, or $20. For the six months ended June 30, 2024 and 2023, free cash flow was $475 and $467, respectively, an increase of 2%, or $8. The increases were primarily driven by lower cash taxes paid, partially offset by higher capital expenditures and lower cash receipts.
Current report
Self-pay subscriber - A self-pay subscriber is a user that, as of the date of determination, was party to a customer agreement with SiriusXM or Pandora, and (i) has paid or agreed to pay a subscription fee, including at a promotional price, or (ii) the subscription fee has been paid by an automaker for a period of three years or greater. Lifetime subscribers to the SiriusXM service are counted as Self-Pay Subscribers because they are party to a customer agreement with SiriusXM and have paid a subscription fee, although in almost all cases the revenue from such subscriptions have been fully recognized in prior periods. Certain users that are party to a customer agreement with Sirius XM or Pandora and have paid or agreed to pay a small promotional price for a trial subscription are not counted as Self-Pay Subscribers because the promotional price is considered to bede minimis and, in management’s view, the payment is not indicative of the user’s intent to subscribe to the service in the near-term.
Current report
Paid promotional subscriber - A paid promotional subscriber is a user that, as of the date determination, has their subscription fee paid for by a third party, for a fixed trial subscription period, which typically range from one to twelve months but is less than three years. We count prepaid shipped but not activated vehicles as paid promotional subscribers.
Removed paragraphs (12)
Previous report
Total Consolidated Revenuefor the three months ended March 31, 2024 and 2023 was $2,162 and $2,144, respectively, an increase of 1%, or $18.
Previous report
For the three months ended March 31, 2024 and 2023, revenue share and royalties were $308 and $310, respectively, a decrease of 1%, or $2, and decreased as a percentage of total Pandora and Off-platform revenue. The decrease was primarily due to lower royalty expense due to a decline in listener hours and streaming plays.
Previous report
For the three months ended March 31, 2024 and 2023, programming and content expenses were $17 and $15, respectively, an increase of 13%, or $2, and increased as a percentage of total Pandora and Off-platform revenue. The increase was primarily attributable to higher live event costs.
Previous report
For each of the three months ended March 31, 2024 and 2023, customer service and billing expenses were $19, but decreased as a percentage of total Pandora and Off-platform revenue. Transaction fees, personnel-related costs, and bad debt expense remained flat.
Previous report
For the three months ended March 31, 2024 and 2023, transmission expenses were $9 and $8, respectively, an increase of 13%, or $1, and increased as a percentage of total Pandora and Off-platform revenue. The increase was driven by slightly higher bandwidth costs.
Previous report
For each of the three months ended March 31, 2024 and 2023, subscriber acquisition costs were $90, but decreased as a percentage of total revenue. Lower commission and hardware subsidy rates were offset by higher hardware subsidies driven by installations, which grew due to increased production by automakers.
Previous report
We expect our general and administrative expenses to decrease due to lower legal costs in addition to insurance recoveries associated with litigation as well as lower personnel-related costs driven by cost optimization efforts implemented in 2023 and 2024.
Previous report
For the three months ended March 31, 2024 and 2023, depreciation and amortization expense was $140 and $136, respectively. The increase was associated with capitalized software and hardware.
Previous report
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Previous report
Subscribers. At March 31, 2024, Pandora had approximately 5,944 subscribers, a decrease of 278, or 4%, from the approximately 6,222 subscribers as of March 31, 2023.
Previous report
For the three months ended March 31, 2024 and 2023, adjusted EBITDA was $650 and $625, respectively, an increase of 4%, or $25. The increase was primarily driven by higher advertising revenue and lower general and administrative expenses, partially offset by lower subscriber revenue.
Previous report
For the three months ended March 31, 2024 and 2023, free cash flow was $132 and $144, respectively, a decrease of 8%, or $12. The decrease was primarily driven by higher content and other vendor payments, partially offset by lower capital expenditures and higher cash receipts.
Reworded paragraphs (52)
Previous wording
We operate two complementary audio entertainment businesses -one of which we refer to as “SiriusXM” and the second of which we refer to as “Pandora and Off-platform”.
Current wording
We operate two complementary audio entertainment businesses -one of which we refer to as “Sirius XM” and the second of which we refer to as “Pandora and Off-platform”.
Previous wording
The primary source of revenue from our Sirius XM business is subscription fees, with most of our customers subscribing to monthly, quarterly, semi-annual or annual plans. We also derive revenue from advertising on select non-music channels, which is sold under the SiriusXM Media brand, direct sales of our satellite radios and accessories, and other ancillary services. As of March 31, 2024, our Sirius XM business had approximately 33.4 million subscribers.
Current wording
The primary source of revenue from our Sirius XM business is subscription fees, with most of our customers subscribing to monthly or annual plans. We also derive revenue from advertising on select non-music channels, which is sold under the SiriusXM Media brand, direct sales of our satellite radios and accessories, and other ancillary services. As of June 30, 2024, our Sirius XM business had approximately 33.3 million subscribers.
Previous wording
Our Pandora and Off-platform business operates a music, comedy and podcast streaming discovery platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through mobile devices, vehicle speakers or connected devices. Pandora enables listeners to create personalized stations and playlists, discover new content, hear artist- and expert-curated playlists, podcasts as well as search and play songs and albums on-demand. Pandora is available as (1) an ad-supported radio service, (2) a radio subscription service (Pandora Plus) and (3) an on-demand subscription service (Pandora Premium). As of March 31, 2024, Pandora had approximately 45.0 million monthly active users and 5.9 million subscribers.
Current wording
Our Pandora and Off-platform business operates a music, comedy and podcast streaming discovery platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through mobile devices, vehicle speakers or connected devices. Pandora enables listeners to create personalized stations and playlists, discover new content, hear artist- and expert-curated playlists, podcasts as well as search and play songs and albums on-demand. Pandora is available as (1) an ad-supported radio service, (2) a radio subscription service (Pandora Plus) and (3) an on-demand subscription service (Pandora Premium). As of June 30, 2024, Pandora had approximately 45.1 million monthly active users and 6.0 million subscribers.
Previous wording
The Transactions have been unanimously approved by Liberty Media’s Board of Directors and a Special Committee of the Board of Directors of Holdings and by Holdings’ Board of Directors. The Transactions are expected to be completed early in the third quarter of 2024, subject to approval by a majority of the aggregate voting power of the shares of Liberty SiriusXM common stock present, whether in-person or by proxy, at a stockholder meeting, the receipt by Liberty Media and New Sirius of tax opinions from their respective tax counsel, as well as the receipt of required regulatory approvals and the satisfaction of other customary closing conditions. A subsidiary of Liberty Media owning a majority of the outstanding shares of Holdings has delivered a written consent approving the Transactions on behalf of a majority of Holdings’ stockholders. Following the Transactions, Liberty Media and New Sirius will operate independently, and neither is expected to have any ownership interest in the other. All of the executive officers of Holdings immediately prior to consummation of the Transactions will be the initial executive officers of New Sirius, and New Sirius will continue to operate under the SiriusXM name and brand.
Current wording
The Transactions have been unanimously approved by Liberty Media’s Board of Directors and a Special Committee of the Board of Directors of Holdings and by Holdings’ Board of Directors. The Transactions are subject to approval by a majority of the aggregate voting power of the shares of Liberty SiriusXM common stock present, whether in-person or by proxy, at a stockholder meeting, the receipt by Liberty Media and New Sirius of tax opinions from their respective tax counsel, as well as the receipt of required regulatory approvals and the satisfaction of other customary closing conditions. A subsidiary of Liberty Media owning a majority of the outstanding shares of Holdings has delivered a written consent approving the Transactions on behalf of a majority of Holdings’ stockholders. Following the Transactions, Liberty Media and New Sirius will operate independently, and neither is expected to have any ownership interest in the other. All of the executive officers of Holdings immediately prior to consummation of the Transactions will be the initial executive officers of New Sirius, and New Sirius will continue to operate under the SiriusXM name and brand.
Previous wording
Set forth below are our results of operations for the three months ended March 31, 2024 compared with the three months ended March 31, 2023. The results of operations are presented for each of our reporting segments for revenue and cost of services and on a consolidated basis for all other items.
Current wording
Set forth below are our results of operations for the three and six months ended June 30, 2024 compared with the three and six months ended June 30, 2023. The results of operations are presented for each of our reporting segments for revenue and cost of services and on a consolidated basis for all other items.
Previous wording
For the three months ended March 31, 2024 and 2023, subscriber revenue was $1,547 and $1,563, respectively, a decrease of 1%, or $16. The decrease was primarily driven by a reduction in self-pay revenue resulting from a decline in average subscribers and a reduction in paid promotional revenue resulting from lower overall rates from automakers offering paid promotional subscriptions; partially offset by an increase in ARPU.
Current wording
For the three months ended June 30, 2024 and 2023, subscriber revenue was $1,520 and $1,597, respectively, a decrease of 5%, or $77. For the six months ended June 30, 2024 and 2023, subscriber revenue was $3,067 and $3,160, respectively, a decrease of 3%, or $93. The decreases were primarily driven by a reduction in self-pay revenue resulting from a decline in average subscribers as well as a lower self-pay ARPU driven by an increase in subscribers on promotional and streaming-only self-pay subscription plans and a reduction in paid promotional revenue.
Previous wording
For the three months ended March 31, 2024 and 2023, advertising revenue was $40 and $41, respectively, a decrease of 2%, or $1. Lower revenue earned on entertainment channels was partially offset by higher revenue earned on sports channels.
Current wording
For the three months ended June 30, 2024 and 2023, advertising revenue was $43 and $45, respectively, a decrease of 4%, or $2. For the six months ended June 30, 2024 and 2023, advertising revenue was $83 and $85, respectively, a decrease of 2%, or $2. Lower revenue from entertainment channels was partially offset by higher revenue earned on sports and comedy channels.
Previous wording
For the three months ended March 31, 2024 and 2023, equipment revenue was $50 and $46, respectively, an increase of 9%, or $4. The increase was driven by increased chipset production.
Current wording
For each of the three months ended June 30, 2024 and 2023, equipment revenue was $47. For the six months ended June 30, 2024 and 2023, equipment revenue was $97 and $93, respectively, an increase of 4%, or $4. The increase for the six month period was driven by increased chipset production.
Previous wording
For the three months ended March 31, 2024 and 2023, other revenue was $30 and $32, respectively, a decrease of 6%, or $2. The decrease was primarily driven by lower royalty revenue from Sirius XM Canada.
Current wording
For the three months ended June 30, 2024 and 2023, other revenue was $30 and $33, respectively, a decrease of 9%, or $3. For the six months ended June 30, 2024 and 2023, other revenue was $60 and $65, respectively, a decrease of 8%, or $5. The decreases were primarily driven by lower royalty revenue from Sirius XM Canada.
Previous wording
For the three months ended March 31, 2024 and 2023, Pandora and Off-platform subscriber revenue was $133 and $128, respectively, an increase of 4%, or $5. The increase was driven by a rate increase on Pandora Plus, partially offset by a decline in the subscriber base.
Current wording
For the three months ended June 30, 2024 and 2023, Pandora and Off-platform subscriber revenue was $138 and $128, respectively, an increase of 8%, or $10. For the six months ended June 30, 2024 and 2023, Pandora and Off-platform subscriber revenue was $271 and $257, respectively, an increase of 5%, or $14. The positive results were driven by rate increases on Pandora subscription plans, partially offset by a decline in the subscriber base.
Previous wording
For the three months ended March 31, 2024 and 2023, Pandora and Off-platform advertising revenue was $362 and $334, respectively, an increase of 8%, or $28. The increase was primarily driven by higher podcasting revenue as well as higher sell-through on the Pandora ad-supported service.
Current wording
For each of the three months ended June 30, 2024 and 2023, Pandora and Off-platform advertising revenue was $400. For the six months ended June 30, 2024 and 2023, Pandora and Off-platform advertising revenue was $762 and $734, respectively, an increase of 4%, or $28. The increase for the six month period was primarily driven by higher podcasting revenue and tech fees as well as higher sell-through on the Pandora ad-supported service.
Previous wording
For the three months ended March 31, 2024 and 2023, revenue share and royalties were $395 and $390, respectively, an increase of 1%, or $5, and increased as a percentage of total Sirius XM revenue. The increase was driven by higher web streaming royalty rates.
Current wording
For the three months ended June 30, 2024 and 2023, revenue share and royalties were $391 and $405, respectively, a decrease of 3%, or $14, but increased as a percentage of total Sirius XM revenue. For the six months ended June 30, 2024 and 2023, revenue share and royalties were $786 and $796, respectively, a decrease of 1%, or $10, but increased as a percentage of total Sirius XM revenue. The decreases were driven by lower revenue, partially offset by higher web streaming royalty rates.
Previous wording
We expect our Sirius XM revenue share and royalty costs to remain relatively flat as higher royalty rates under the statutory webcasting license resulting from increases in the Consumer Price Index are anticipated to be offset by lower eligible subscription revenue.
Current wording
We expect our Sirius XM revenue share and royalty costs to remain flat as a percentage of revenue but to decrease overall due to lower eligible subscription revenue, partially offset by higher royalty rates under the statutory webcasting license resulting from increases in the Consumer Price Index.
Previous wording
For the three months ended March 31, 2024 and 2023, programming and content expenses were $140 and $135, respectively, an increase of 4%, or $5, and increased as a percentage of total Sirius XM revenue. The increase was primarily driven by higher license fees and personnel-related costs.
Current wording
For each of the three months ended June 30, 2024 and 2023, programming and content expenses were $135 and increased as a percentage of total Sirius XM revenue. For the six months ended June 30, 2024 and 2023, programming and content expenses were $275 and $271, respectively, an increase of 1%, or $4, and increased as a percentage of total Sirius XM revenue. The increase for the six month period was primarily driven by higher personnel-related costs.
Previous wording
We expect our Sirius XM programming and content expenses to remain relatively flat.
Current wording
We expect our Sirius XM programming and content expenses to slightly increase due to higher license fees.
Previous wording
For the three months ended March 31, 2024 and 2023, customer service and billing expenses were $97 and $103, respectively, a decrease of 6%, or $6, and decreased as a percentage of total Sirius XM revenue. The decrease was primarily driven by lower call center and personnel-related costs.
Current wording
For the three months ended June 30, 2024 and 2023, customer service and billing expenses were $87 and $100, respectively, a decrease of 13%, or $13, and decreased as a percentage of total Sirius XM revenue. For the six months ended June 30, 2024 and 2023, customer service and billing expenses were $184 and $203, respectively, a decrease of 9%, or $19, and decreased as a percentage of total Sirius XM revenue. The decreases were primarily driven by lower call center costs, transaction and payment process fees, bad debt expense, and personnel-related costs.
Previous wording
For the three months ended March 31, 2024 and 2023, transmission expenses were $50 and $41, respectively, an increase of 22%, or $9, and increased as a percentage of total Sirius XM revenue. The increase was primarily driven by higher hosting costs associated with our streaming platform.
Current wording
For the three months ended June 30, 2024 and 2023, transmission expenses were $49 and $41, respectively, an increase of 20%, or $8, and increased as a percentage of total Sirius XM revenue. For the six months ended June 30, 2024 and 2023, transmission expenses were $99 and $82, respectively, an increase of 21%, or $17, and increased as a percentage of total Sirius XM revenue. The increases were primarily driven by higher hosting costs associated with our streaming platform.
Previous wording
For the three months ended March 31, 2024 and 2023, cost of equipment was $2 and $3, respectively, a decrease of 33%, or $1, and decreased as a percentage of total Sirius XM revenue. The decrease was driven by fewer sales and lower shipping costs.
Current wording
For the three months ended June 30, 2024 and 2023, cost of equipment was $2 and $3, respectively, a decrease of 33%, or $1, and decreased as a percentage of total Sirius XM revenue. For the six months ended June 30, 2024 and 2023, cost of equipment was $5 and $7, respectively, a decrease of 29%, or $2, and decreased as a percentage of total Sirius XM revenue. The decreases were driven by fewer sales and lower shipping costs.
Previous wording
We expect our Pandora and Off-platform revenue share and royalties to increase with the growth in our podcast revenue and higher royalty rates from increases in the Consumer Price Index.
Current wording
We expect our Pandora and Off-platform revenue share and royalties to increase with the growth in our podcast revenue and higher royalty rates, including as a result of increases in the Consumer Price Index.
Previous wording
Pandora and Off-platform Programming and Content includes costs to produce live listener events and promote content.
Current wording
Pandora and Off-platform Programming and Content includes costs to produce owned and operated podcasts, live listener events and promote content.
Previous wording
We expect our Pandora and Off-platform programming and content costs to decrease due to lower personnel-related costs.
Current wording
We expect our Pandora and Off-platform programming and content costs to remain relatively flat as higher costs associated with producing podcasts and listener events are offset by lower personnel-related costs.
Previous wording
We expect our Pandora and Off-platform customer service and billing costs to decrease driven by lower expected bad debt expense.
Current wording
We expect our Pandora and Off-platform customer service and billing costs to remain relatively flat.
Previous wording
We expect subscriber acquisition costs to fluctuate with automaker installations. We intend to continue to offer subsidies and other incentives to induce automakers to include our technology in their vehicles.
Current wording
We expect subscriber acquisition costs to increase driven by growth in penetration with certain automakers as well as higher subsidies and other incentives offered to induce automakers to include our latest technology in their vehicles.
Previous wording
For the three months ended March 31, 2024 and 2023, sales and marketing expenses were $229 and $224, respectively, an increase of 2%, or $5, and increased as a percentage of total revenue. The increase was primarily due to an increase in brand and content marketing.
Current wording
For the three months ended June 30, 2024 and 2023, sales and marketing expenses were $228 and $220, respectively, an increase of 4%, or $8, and increased as a percentage of total revenue. For the six months ended June 30, 2024 and 2023, sales and marketing expenses were $457 and $443, respectively, an increase of 3%, or $14, and increased as a percentage of total revenue. The increases were primarily due to an increase in brand and content marketing.
Previous wording
We anticipate that sales and marketing expenses to decline primarily due to lower personnel-related costs driven by cost optimization efforts implemented in 2023 and 2024.
Current wording
We expect sales and marketing expenses to remain relatively flat.
Previous wording
For the three months ended March 31, 2024 and 2023, engineering, design and development expenses were $86 and $79, respectively, an increase of 9%, or $7, and increased as a percentage of total revenue. The increase was driven by higher personnel-related and cloud hosting costs.
Current wording
For the three months ended June 30, 2024 and 2023, engineering, design and development expenses were $71 and $83, respectively, a decrease of 14%, or $12, and decreased as a percentage of total revenue. For the six months ended June 30, 2024 and 2023, engineering, design and development expenses were $157 and $162, respectively, a decrease of 3%, or $5, and decreased as a percentage of total revenue. The decreases were driven by higher capitalized personnel-related costs, partially offset by higher personnel-related and cloud hosting costs.
Previous wording
For the three months ended March 31, 2024 and 2023, general and administrative expenses were $115 and $147, respectively, a decrease of 22%, or $32, and decreased as a percentage of total revenue. The decrease was primarily driven by lower personnel-related costs as well as lower legal costs resulting from litigation insurance recoveries and reduced legal reserves.
Current wording
For the three months ended June 30, 2024 and 2023, general and administrative expenses were $108 and $157, respectively, a decrease of 31%, or $49, and decreased as a percentage of total revenue. For the six months ended June 30, 2024 and 2023, general and administrative expenses were $223 and $303, respectively, a decrease of 26%, or $80, and decreased as a percentage of total revenue. The decreases were primarily driven by lower personnel-related costs as well as lower legal costs resulting from litigation insurance recoveries and reduced legal reserves, including amounts associated with settlement of certain litigation matters of $24 during the three months ended June 30, 2023.
Previous wording
For the three months ended March 31, 2024 and 2023, impairment, restructuring and acquisition costs were $28 and $32, respectively. During the three months ended March 31, 2024, we recorded costs associated with the Transactions of $15, a charge of $12 associated with severance and other employee costs, and impairments, primarily related to terminated software projects of $1. During the three months ended March 31, 2023, we recorded a charge of $23 associated with severance and other employee costs and $9 primarily related to a vacated office space.
Current wording
For each of the three months ended June 30, 2024 and 2023, impairment, restructuring and acquisition costs were $18. For the six months ended June 30, 2024 and 2023, impairment, restructuring and acquisition costs were $46 and $50, respectively. During the three months ended June 30, 2024, we recorded costs associated with the Transactions of $14, a charge of $3 associated with severance and other employee costs, and impairments, primarily related to vacated office space, of $1. During the six months ended June 30, 2024, we recorded costs associated with the Transactions of $29, a charge of $15 associated with severance and other employee costs, and impairments, primarily related to terminated software projects and vacated office space of $2. During the three months ended June 30, 2023, we recorded impairments primarily related to terminated software projects of $10, restructuring costs of $5, and a cost-method investment impairment, of $2. During the six months ended June 30, 2023, we recorded a charge of $23 associated with severance and other employee costs, impairments, primarily related to terminated software projects, of $13, vacated office space impairments of $7, restructuring costs of $5, and a cost-method investment impairment of $2.
Previous wording
For the three months ended March 31, 2024 and 2023, interest expense was $104 and $107, respectively. The decrease was driven by higher capitalized interest and a lower average outstanding debt balance, partially offset by higher interest rates under our the Credit Facility and Incremental Term Loan.
Current wording
For the three months ended June 30, 2024 and 2023, interest expense was $102 and $107, respectively. For the six months ended June 30, 2024 and 2023, interest expense was $206 and $213, respectively. The decreases were driven by a lower average outstanding debt balance and higher capitalized interest.
Previous wording
For the three months ended March 31, 2024 and 2023, other income was $12 and $3, respectively. For the three months ended March 31, 2024, we recorded our share of Sirius XM Canada's net income as well as trading gains associated with the investments held for our Deferred Compensation Plan. For the three months ended March 31, 2023, we recorded trading gains associated with the investments held for our Deferred Compensation Plan as well as our share of Sirius XM Canada's net income, partially offset by our share of SoundCloud's net losses.
Current wording
For the three months ended June 30, 2024 and 2023, other income was $2 and $0, respectively. For the six months ended June 30, 2024 and 2023, other income was $14 and $3, respectively. For each of the three and six months ended June 30, 2024, we recorded our share of Sirius XM Canada's net income as well as trading gains associated with the investments held for our Deferred Compensation Plan, partially offset by our share of SoundCloud's net losses.
Previous wording
For the three months ended March 31, 2024 and 2023, income tax expense was $80 and $75, respectively.
Current wording
For the three months ended June 30, 2024 and 2023, income tax expense was $89 and $62, respectively. For the six months ended June 30, 2024 and 2023, income tax expense was $168 and $138, respectively.
Previous wording
Our effective tax rate for the three months ended March 31, 2024 and 2023 was 23.2% and 24.4%, respectively. The effective tax rate for each of the three months ended March 31, 2024 and March 31, 2023 was negatively impacted by shortfalls related to share-based compensation. We estimate our effective tax rate for the year ending December 31, 2024 will be approximately 22%.
Current wording
Our effective tax rate for the three months ended June 30, 2024 and 2023 was 22.0% and 16.7%, respectively. Our effective tax rate for the six months ended June 30, 2024 and 2023 was 22.4% and 20.3%, respectively. The effective tax rate for the three months ended June 30, 2024 and June 30, 2023 was negatively impacted by tax losses related to share-based compensation. The effective tax rate for the three and six months ended June 30, 2023 was primarily impacted by the release of valuation reserves against state net operating losses we now expect to realize. We estimate our effective tax rate for the year ending December 31, 2024 will be approximately 22%.
Previous wording
Our Non-GAAP financial measures should be viewed in addition to, and not as an alternative for or superior to, our reported results prepared in accordance with GAAP. In addition, our Non-GAAP financial measures may not be comparable to similarly-titled measures by other companies. Please refer to the Glossary for a further discussion of such Non-GAAP financial and operating performance measures and reconciliations to the most directly comparable GAAP measure (where applicable). 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.
Current wording
Our Non-GAAP financial measures should be viewed in addition to, and not as an alternative for or superior to, our reported results prepared in accordance with GAAP. In addition, our Non-GAAP financial measures may not be comparable to similarly-titled measures by other companies. Please refer to the Glossary for a further discussion of such Non-GAAP financial and operating performance measures and reconciliations to the most directly comparable GAAP measure (where applicable). 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 the Cloud Cover music programming service are now included in Pandora's subscriber count.
Previous wording
The following table contains our Non-GAAP financial and operating performance measures which are based on our adjusted results of operations for the three months ended March 31, 2024 and 2023.
Current wording
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 six months ended June 30, 2024 and 2023.
Previous wording
(1) ARPU for Sirius XM excludes subscriber revenue from our connected vehicle services of $41 and $39 for the three months ended March 31, 2024 and 2023, respectively.
Current wording
(1) ARPU for Sirius XM excludes subscriber revenue from our connected vehicle services of $41 and $43 for the three months ended June 30, 2024 and 2023, respectively, and $82 for each of the six months ended June 30, 2024 and 2023.
Previous wording
Subscribers. At March 31, 2024, Sirius XM had approximately 33,430 subscribers, a decrease of 594, from the approximately 34,024 subscribers as of March 31, 2023. Our self-pay subscriber base declined as a result of lower vehicle conversion rates and higher vehicle related churn, and we saw a decrease in paid promotional subscribers as certain automakers transitioned from paid promotional subscriptions to unpaid.
Current wording
Subscribers. At June 30, 2024, Sirius XM had approximately 33,257 subscribers, a decrease of 806, from the approximately 34,063 subscribers as of June 30, 2023. Our self-pay subscriber base declined as a result of lower vehicle conversion rates and higher vehicle related churn, and we saw a decrease in paid promotional subscribers as certain automakers transitioned from paid promotional subscriptions to unpaid.
Previous wording
For the three months ended March 31, 2024 and 2023, net subscriber additions were (445) and (281), respectively, a decrease of 164. Paid promotional net additions decreased 152 as certain automakers transitioned from paid promotional subscriptions to unpaid. Self-pay net additions decreased 12 primarily due to higher vehicle-related churn, and lower conversion rates, partially offset by higher new and used trial conversion opportunities.
Current wording
For the three months ended June 30, 2024 and 2023, net subscriber additions were (173) and 39, respectively, a decrease of 212. For the six months ended June 30, 2024 and 2023, net subscriber additions were (618) and (242), respectively, a decrease of 376. Paid promotional net additions decreased compared to the prior year periods as certain automakers transitioned from paid promotional subscriptions to unpaid. Self-pay net additions declined less compared to the prior year periods primarily due to lower voluntary churn as well as higher automaker volumes, partially offset by higher vehicle related churn as well as lower vehicle conversion rates and streaming net additions.
Previous wording
Sirius XM Canada Subscribers. At March 31, 2024, Sirius XM Canada had approximately 2,600 subscribers, an increase of 13, or 1%, from the approximately 2,587 Sirius XM Canada subscribers as of March 31, 2023.
Current wording
Sirius XM Canada Subscribers. At June 30, 2024, Sirius XM Canada had approximately 2,586 subscribers, a decrease of 42, or 2%, from the approximately 2,628 Sirius XM Canada subscribers as of June 30, 2023.
Previous wording
For the three months ended March 31, 2024 and 2023, our average self-pay monthly churn rate was 1.7% and 1.6%, respectively. The increase was primarily driven by higher vehicle related churn.
Current wording
For each of the three months ended June 30, 2024 and 2023, our average self-pay monthly churn rate was 1.5%. For each of the six months ended June 30, 2024 and 2023, our average self-pay monthly churn rate was 1.6%.
Previous wording
For the three months ended March 31, 2024 and 2023, ARPU was $15.36 and $15.29, respectively. The increase was driven by increases in certain subscription rates, partially offset by an increase in subscribers on promotional and streaming-only self-pay subscription plans and a reduction in rates associated with paid promotional plans from automakers.
Current wording
For the three months ended June 30, 2024 and 2023, ARPU was $15.24 and $15.66, respectively. For the six months ended June 30, 2024 and 2023, ARPU was $15.30 and $15.47, respectively. The decreases were driven by an increase in subscribers on promotional and streaming-only self-pay subscription plans.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
3,731 shares for $16,834, and $1,166 remained available for additional repurchases under our existing stock repurchase program authorization. During the six months ended June 30, 2024, we did not repurchase any shares of our common stock.