SIRIUS XM HOLDINGS INC
For the period ended Sep 30, 2024. Filed Oct 31, 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.
Sep 30, 2024 · Filed Oct 31, 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 2024-06-30; filed 2024-08-01.
0000908937-24-000021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0000908937-24-000028
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 237 previous paragraphs and 243 current paragraphs.
126 unchanged; 85 reworded; 31 added; 25 removed; 1 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 (31)
Current report
Risks Related to the Transactions:
Current report
•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;
Current report
•we may determine to forgo certain transactions that might otherwise be advantageous in order to avoid the risk of incurring significant tax-related liabilities;
Current report
•we may not realize the potential benefits from the Transactions in the near term or at all;
Current report
•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 SplitCo on an “as is, where is” basis;
Current report
•we may be a target of securities class action and derivative lawsuits in connection with the Transactions;
Current report
•it may be difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders;
Current report
•we have overlapping directors with Liberty Media, which may lead to conflicting interests;
Current report
•our directors and officers are protected from liability for a broad range of actions;
Current report
•our holding company structure could restrict access to funds of its subsidiaries that may be needed to pay third party obligations;
Current report
•our ability to incur additional indebtedness to fund our operations could be limited, which could negatively impact its operations.
Current report
Liberty Media Transactions
Current report
Sirius XM Holdings Inc., the reporting company under this Quarterly Report on Form 10-Q, is the product of a series of transactions that closed after market close Monday, September 9, 2024.
Current report
On September 9, 2024 at 4:05 p.m., New York City time, Liberty Media Corporation (“Liberty Media” or “Former Parent”) completed its previously announced split-off (the “Split-Off”) of its former wholly owned subsidiary, Liberty Sirius XM Holdings Inc. (“SplitCo”). The Split-Off was accomplished by Liberty Media redeeming each outstanding share of Liberty Media’s Series A, Series B and Series C Liberty SiriusXM common stock, par value $0.01 per share, in exchange for 0.8375 of a share of SplitCo common stock, par value $0.001 per share (the “Redemption”), with cash being paid to entitled record holders of Liberty SiriusXM common stock in lieu of any fractional shares of common stock of SplitCo.
Current report
Following the Split-Off, on September 9, 2024 at 6:00 p.m., New York City time (the “Merger Effective Time”), a wholly owned subsidiary of SplitCo merged with and into Sirius XM Holdings Inc. (“Old Sirius”), with Old Sirius surviving the merger as a wholly owned subsidiary of New Sirius (the “Merger” and together with the Split-Off, the “Transactions”). Upon consummation of the Merger, each share of common stock of Old Sirius, par value $0.001 per share, issued and outstanding immediately prior to the Merger Effective Time (other than shares owned by New Sirius and its subsidiaries) was converted into one-tenth (0.1) of a share of SplitCo common stock, with cash being paid to entitled record holders of Old Sirius common stock in lieu of any fractional shares of common stock of SplitCo.
Current report
At the Merger Effective Time, Old Sirius was renamed “Sirius XM Inc.” and SplitCo was renamed “Sirius XM Holdings Inc.” In connection with the Transactions and by operation of Rule 12g-3(a) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), SplitCo became the successor issuer to Old Sirius and succeeded to the attributes of Old Sirius as the registrant, including Old Sirius's Commission File Number and CIK number.
Current report
The Transactions are intended to generally be tax-free to holders of Liberty SiriusXM common stock and Sirius XM Holdings common stock (except with respect to any cash received by such holders) and the completion of the Transactions was subject to various conditions, including the receipt of opinions of tax counsel.
Current report
Any references to the “Company,” “we,” “us,” or “ours” refers to Sirius XM Holdings Inc. and its consolidated subsidiaries following the Transactions.
Current report
Results of Operations - September 30, 2024 and 2023
Current report
Total Revenue
Current report
Total Revenuefor the three months ended September 30, 2024 and 2023 was $2,171 and $2,271, respectively, a decrease of 4%, or $100. Total Revenue for the nine months ended September 30, 2024 and 2023 was $6,511 and $6,665, respectively, a decrease of 2%, or $154.
Current report
For the three months ended September 30, 2024 and 2023, other income (expense), net was $28 and $(51), respectively. For the nine months ended September 30, 2024 and 2023, other income (expense) was $142 and $(17), respectively. For the three and nine months ended September 30, 2024, we recorded unrealized gains on debt measured at fair value, earnings on unconsolidated entity investments, and trading gains associated with the investments held for our Deferred Compensation Plan. For the three months ended September 30, 2023, we recorded unrealized losses on debt measured at fair value and losses associated with bond hedges, partially offset by earnings on unconsolidated entity investments, and trading gains associated with the investments held for our Deferred Compensation Plan. For the nine months ended September 30, 2023, we recorded losses associated with bond hedges, partially offset by unrealized gains on debt measured at fair value, gains associated with the fair value of intergroup interests, earnings on unconsolidated entity investments, and trading gains associated with the investments held for our Deferred Compensation Plan.
Current report
nm - not meaningful
Current report
For the three months ended September 30, 2024 and 2023, adjusted EBITDA was $693 and $747, respectively, a decrease of 7%, or $54. For the nine months ended September 30, 2024 and 2023, adjusted EBITDA was $2,043 and $2,075, respectively, a decrease of 2%, or $32. The decreases were driven by declines in subscriber revenue, partially offset by lower costs of services, personnel-related costs, and general and administrative expenses.
Current report
Cash flows used in financing activities in the nine months ended September 30, 2024 were primarily due to the repayment of $2,797 of debt, partially offset by proceeds from debt borrowings of $2,451. The remaining cash flows used in financing activities related to taxes paid from net share settlements for stock-based compensation and dividends paid. Long-term debt proceeds and repayments are reported gross within the statement of cash flows and primarily relate to the Margin Loan and the Credit Facility.
Current report
Cash flows used in financing activities in the nine months ended September 30, 2023 were primarily due to the repayment of $3,306 of debt and the purchase and retirement of shares of Sirius XM Holdings common stock under its repurchase program of $274, partially offset by proceeds from debt borrowings of $2,601, and settlement of intergroup interests of $273. Long-term debt proceeds and repayments are reported gross within the statement of cash flows and primarily relate to Liberty Media’s 1.375% Cash Convertible Senior Notes due 2023, the Convertible Notes, the Exchangeable Notes, the Margin Loan, and the Credit Facility.
Current report
In connection with the Transactions, holders of the Exchangeable Notes have the right to require us to repurchase the Exchangeable Notes at a purchase price equal to the adjusted principal amount plus accrued and unpaid interest and any final period distribution. We expect to use the proceeds of the Incremental Term Loan to refinance the Exchangeable Notes.
Current report
Stock Repurchase Program
Current report
Prior to the closing of the Transactions, the board of directors of Old Sirius had approved the repurchase of an aggregate of $18,000 of its common stock. As of the closing of the Transactions, Old Sirius' cumulative repurchases since December 2012 under that stock repurchase program totaled 373 shares for $16,834, and $1,166 remained available under that stock repurchase program. The stock repurchase program of Old Sirius was terminated on the closing date of the Transactions.
Current report
Dividend
Current report
(1)Sirius XM Holdings’ free cash flow compared to Old Sirius’ free cash flow is impacted by the additional interest payments related to Liberty Media’s debt attributed to SplitCo as well as corporate costs.
Removed paragraphs (25)
Previous report
This Quarterly Report on Form 10-Q presents information for Sirius XM Holdings Inc. (“Holdings”). The terms “Holdings,” “we,” “us,” “our,” and “our company” as used herein, and unless otherwise stated or indicated by context, refer to Sirius XM Holdings Inc. and its subsidiaries. "Sirius XM" refers to our wholly owned subsidiary Sirius XM Radio Inc. and its subsidiaries. "Pandora" refers to Sirius XM's wholly owned subsidiary Pandora Media, LLC and its subsidiaries. Holdings has no operations independent of Sirius XM and Pandora.
Previous report
Risks Related to our Capital and Ownership Structure:
Previous report
•we are a “controlled company” within the meaning of the NASDAQ listing rules and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements;
Previous report
•our principal stockholder has significant influence, including over actions requiring stockholder approval, and its interests may differ from the interests of other holders of our common stock;
Previous report
•the Transactions may adversely affect our business and financial condition; and
Previous report
Sirius XM
Previous report
As of June 30, 2024, Liberty Media beneficially owned, directly and indirectly, 83.3% of the outstanding shares of our common stock. As a result, we are a “controlled company” for the purposes of the NASDAQ corporate governance requirements.
Previous report
On December 11, 2023, Holdings entered into definitive agreements whereby, subject to the terms thereof, Liberty Sirius XM Holdings Inc., a Delaware corporation and a wholly owned subsidiary of Liberty Media (“New Sirius”), would split-off from Liberty Media. The transactions would be effectuated by means of a redemptive split-off of New Sirius (the “Split-Off”), which will own all of the assets and liabilities attributed to Liberty Media’s Series A Liberty SiriusXM common stock (“LSXMA”), Series B Liberty SiriusXM common stock (“LSXMB”) and Series C Liberty SiriusXM common stock (“LSXMK”, together with the LSXMB and LSXMA stock, the “Liberty SiriusXM Group”). Following the Split-Off, New Sirius will combine with Holdings through the merger of Radio Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of New Sirius (“Merger Sub”), with Holdings, with Holdings becoming a wholly owned subsidiary of New Sirius (the “Merger” and, together with the Split-Off, the “Transactions”). As part of the Merger, New Sirius will be renamed “Sirius XM Holdings Inc.”
Previous report
To effect the Transactions, on December 11, 2023, Liberty Media entered into (i) a Reorganization Agreement (the “Reorganization Agreement”) with Holdings and New Sirius, and (ii) an Agreement and Plan of Merger (the “Merger Agreement”) with New Sirius, Holdings and Merger Sub.
Previous report
In connection with the Merger Agreement and the Reorganization Agreement, on December 11, 2023, certain trusts related to Dr. John C. Malone (collectively, the “Malone Stockholders”) entered into a voting agreement (the “Voting Agreement”) with Liberty Media, Holdings and New Sirius, pursuant to which, among other things, the Malone Stockholders agreed, subject to the terms of the Voting Agreement, to vote their respective shares of Liberty Media’s LSXMA and LSXMB in favor of the Split-Off.
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Results of Operations
Previous report
Total Consolidated Revenue
Previous 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.
Previous report
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 report
Sirius XM
Previous 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.
Previous report
Cash flows used in financing activities in the six months ended June 30, 2024 were primarily due to repayments under our Credit Facility of $1,002, the repayment of Sirius XM's Incremental Term Loan of $500, the payment of cash dividends of $205, and payment of $20 for taxes in lieu of shares issued for share-based compensation, partially offset by borrowings under our Credit Facility of $1,352. Cash flows used in financing activities in the six months ended June 30, 2023 were primarily due to repayments under our Credit Facility of $974, the payment of cash dividends of $188, the repurchase of $173 in principal amount of Pandora's 1.75% Convertible Senior Notes due 2023, the purchase and retirement of shares of our common stock under our repurchase program for $199, and payment of $18 for taxes in lieu of shares issued for share-based compensation, partially offset by borrowings under our Credit Facility of $1,117.
Previous report
Capital Return Program
Previous report
As of June 30, 2024, our board of directors had authorized for repurchase an aggregate of $18,000 of our common stock. As of June 30, 2024, our cumulative repurchases since December 2012 under our stock repurchase program totaled
Reworded paragraphs (85)
Previous wording
All amounts referenced in this Item 2 are in millions, except subscriber amounts are in thousands and per subscriber and per installation amounts are in ones, unless otherwise stated.
Current wording
The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with the accompanying unaudited consolidated financial statements and the notes thereto. All amounts referenced in this section are in millions, except subscriber amounts are in thousands and per subscriber and per installation amounts are in ones, unless otherwise stated.
Previous wording
The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in forward-looking statements made in this Quarterly Report on Form 10-Q and in other reports and documents published by us from time to time. Any statements about our beliefs, plans, objectives, expectations, assumptions, future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection” and “outlook.” Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this Quarterly Report on Form 10-Q and in other reports and documents published by us from time to time, including the risk factors described under “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2023, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein and in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in forward-looking statements made in this Quarterly Report on Form 10-Q and in other reports and documents published by us from time to time. Any statements about our beliefs, plans, objectives, expectations, assumptions, future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection” and “outlook.” Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this Quarterly Report on Form 10-Q and in other reports and documents published by us from time to time, including the risk factors described under Item 1A “Risk Factors” in Part II of this Quarterly Report on Form 10-Q.
Previous wording
•we may be exposed to liabilities that other entertainment service providers would not customarily be subject to; and
Current wording
•we may be exposed to liabilities that other entertainment service providers would not customarily be subject to;
Previous wording
•while we currently pay a quarterly cash dividend to holders of our common stock, we may change our dividend policy at any time.
Current wording
•while we currently pay a quarterly cash dividend to holders of our common stock, we may change our dividend policy at any time; and
Previous wording
•we have a significant amount of indebtedness, and our debt contains certain covenants that restrict our operations;
Current wording
•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
Previous wording
Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any of these forward-looking statements. In addition, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which the statement is made, to reflect the occurrence of unanticipated events or otherwise, except as required by law. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Current wording
Because the risk factors referred to in Item 1A “Risk Factors” in Part II of this Quarterly Report on Form 10-Q could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any of these forward-looking statements. In addition, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which the statement is made, to reflect the occurrence of unanticipated events or otherwise, except as required by law. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying unaudited consolidated financial statements and the notes thereto and our audited combined financial statements for the year ended December 31, 2023 in the Registration Statement.
Previous 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”.
Current wording
We operate two complementary audio entertainment businesses -one of which it refers to as “Sirius XM” and the second of which it refers to as “Pandora and Off-platform”.
Previous wording
Our Sirius XM business features music, sports, entertainment, comedy, talk, news, traffic and weather channels and other content, as well as podcasts and infotainment services, in the United States on a subscription fee basis. Sirius XM's packages include live, curated and certain exclusive and on demand programming. The Sirius XM service is distributed through our two proprietary satellite radio systems and streamed via applications for mobile devices, home devices and other consumer electronic equipment. Satellite radios are primarily distributed through automakers, retailers and our website. Our Sirius XM service is also available through our in-car user interface, which we call “360L,” that combines our satellite and streaming services into a single, cohesive in-vehicle entertainment experience.
Current wording
The Sirius XM business features music, sports, entertainment, comedy, talk and news channels and other content, as well as podcasts and infotainment services, in the United States on a subscription fee basis. Sirius XM's packages include live, curated and certain exclusive and on demand programming. The Sirius XM service is distributed through Sirius XM’s two proprietary satellite radio systems and streamed via applications for mobile devices, home devices and other consumer electronic equipment. Satellite radios are primarily distributed through automakers, retailers and Sirius XM’s website. The
Previous 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.
Current wording
The primary source of revenue from the Sirius XM business is subscription fees, with most of its customers subscribing to monthly or annual plans. Sirius XM also derives 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 September 30, 2024, the Sirius XM business had approximately 33.2 million subscribers.
Previous wording
In addition to our audio entertainment businesses, we provide connected vehicle services to several automakers. These services are designed to enhance the safety, security and driving experience of consumers. We also offer a suite of data services that includes graphical weather and fuel prices, a traffic information service, and real-time weather services in boats and airplanes.
Current wording
In addition to the audio entertainment businesses, Sirius XM provides connected vehicle services to several automakers. These services are designed to enhance the safety, security and driving experience of consumers. Sirius XM also offers a suite of data services that includes graphical weather and fuel prices, a traffic information service, and real-time weather services in boats and airplanes.
Previous wording
Sirius XM also holds a 70% equity interest and 33% voting interest in Sirius XM Canada. Sirius XM Canada's subscribers are not included in our subscriber count or subscriber-based operating metrics.
Current wording
Sirius XM holds a 70% equity interest and 33% voting interest in Sirius XM Canada Holdings Inc. (“Sirius XM Canada”). Sirius XM Canada's subscribers are not included in our subscriber count or subscriber-based operating metrics.
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 June 30, 2024, Pandora had approximately 45.1 million monthly active users and 6.0 million subscribers.
Current wording
The 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 September 30, 2024, Pandora had approximately 43.7 million monthly active users and 5.9 million subscribers.
Previous wording
The majority of revenue from Pandora is generated from advertising on our Pandora ad-supported radio service which is sold under the SiriusXM Media brand. We also derive subscription revenue from our Pandora Plus and Pandora Premium subscribers.
Current wording
The majority of revenue from Pandora is generated from advertising on Pandora's ad-supported radio service which is sold under the SiriusXM Media brand. Pandora also derives subscription revenue from its Pandora Plus and Pandora Premium subscribers.
Previous wording
We also sell advertising on other audio platforms and in widely distributed podcasts, which we consider to be off-platform services. We have an arrangement with SoundCloud Holdings, LLC ("SoundCloud") to be its exclusive ad sales representative in the US and certain European countries and offer advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms. We also have arrangements to serve as the ad sales representative for certain podcasts. In addition, through AdsWizz Inc., we provide a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.
Current wording
Sirius XM also sells advertising on other audio platforms and in widely distributed podcasts, which it considers to be off-platform services. Sirius XM has an arrangement with SoundCloud Holdings, LLC (“SoundCloud”) to be its exclusive ad sales representative in the US and certain European countries and offer advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms. It also has arrangements to serve as the ad sales representative for certain podcasts. In addition, through AdsWizz Inc., Sirius XM provides a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.
Previous 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.
Current wording
Set forth below are our results of operations for the three and nine months ended September 30, 2024 compared with the three and nine months ended September 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 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.
Current wording
For the three months ended September 30, 2024 and 2023, subscriber revenue was $1,510 and $1,597, respectively, a decrease of 5%, or $87. For the nine months ended September 30, 2024 and 2023, subscriber revenue was $4,576 and $4,757, respectively, a decrease of 4%, or $181. The decreases were primarily driven by a reduction in self-pay revenue resulting from a decline in average subscribers as well as a lower ARPU driven by an increase in subscribers on self-pay promotional and streaming-only self-pay subscription plans and a reduction in paid promotional revenue.
Previous wording
We expect subscriber revenues to decrease due to a decrease in average subscribers as well as a decline in the average price of our subscriptions.
Current wording
We expect subscriber revenues to decrease due to a decline in average subscribers as well as the average price of our subscriptions.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, advertising revenue was $41 and $42, respectively, a decrease of 2%, or $1. For the nine months ended September 30, 2024 and 2023, advertising revenue was $124 and $126, respectively, a decrease of 2%, or $2. Lower revenue from entertainment channels was partially offset by higher revenue earned on news channels.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, equipment revenue was $43 and $49, respectively, a decrease of 12%, or $6. For the nine months ended September 30, 2024 and 2023, equipment revenue was $140 and $142, respectively, a decrease of 1%, or $2. The decreases were driven by a transition to higher cost next generation chipsets. For the nine month period, the decrease was partially offset by increased chipset production.
Previous wording
We expect equipment revenue to decrease as we transition to our next generation chipset at higher costs partially offset by increased production.
Current wording
We expect equipment revenue to remain flat as higher costs associated with the transition to our next generation chipset are anticipated to offset increased production.
Previous 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.
Current wording
For each of the three months ended September 30, 2024 and 2023, other revenue was $33. For the nine months ended September 30, 2024 and 2023, other revenue was $93 and $99, respectively, a decrease of 6%, or $6. The decrease for the nine month period was driven by lower royalty revenue from Sirius XM Canada.
Previous wording
We expect other revenue to continue to decrease primarily due to lower revenue from Sirius XM Canada and our connected vehicle services.
Current wording
We expect other revenue to continue to decrease primarily due to lower revenue from our connected vehicle services.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, Pandora and Off-platform subscriber revenue was $135 and $132, respectively, an increase of 2%, or $3. For the nine months ended September 30, 2024 and 2023, Pandora and Off-platform subscriber revenue was $407 and $389, respectively, an increase of 5%, or $18. The positive results were driven by rate increases on Pandora subscription plans, partially offset by a decline in the subscriber base.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, Pandora and Off-platform advertising revenue was $409 and $418, respectively, a decrease of 2%, or $9. For the nine months ended September 30, 2024 and 2023, Pandora and Off-platform advertising revenue was $1,171 and $1,152, respectively, an increase of 2%, or $19. The decrease for the three month period was driven by a number of factors, including lower streaming demand due to new supply entering the market. The increase for the nine month period was primarily driven by higher podcasting revenue and technology fees as well as higher sell-through on the Pandora ad-supported service, partially offset by the market factors described above.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, revenue share and royalties were $390 and $406, respectively, a decrease of 4%, or $16, but increased as a percentage of total Sirius XM revenue. For the nine months ended September 30, 2024 and 2023, revenue share and royalties were $1,176 and $1,201, respectively, a decrease of 2%, or $25, but increased as a percentage of total Sirius XM revenue. The decreases were driven by lower subscription revenue, partially offset by higher web streaming royalty rates.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, programming and content expenses were $137 and $136, respectively, an increase of 1%, or $1, and increased as a percentage of total Sirius XM revenue. For the nine months ended September 30, 2024 and 2023, programming and content expenses were $412 and $407, respectively, an increase of 1%, or $5, and increased as a percentage of total Sirius XM revenue. The increases were driven by higher personnel-related costs.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, customer service and billing expenses were $91 and $96, respectively, a decrease of 5%, or $5, but increased as a percentage of total Sirius XM revenue. For the nine months ended September 30, 2024 and 2023, customer service and billing expenses were $276 and $300, respectively, a decrease of 8%, or $24, and decreased as a percentage of total Sirius XM revenue. The decreases were primarily driven by lower call center costs, transaction and payment processing fees, bad debt expense, and personnel-related costs.
Previous wording
We expect our Sirius XM customer service and billing expenses to decline due to lower call center and personnel-related costs.
Current wording
We expect our Sirius XM customer service and billing expenses to increase as a result of higher subscriber management system transitional costs, partially offset by lower call center and personnel-related costs.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, transmission expenses were $48 and $44, respectively, an increase of 9%, or $4, and increased as a percentage of total Sirius XM revenue. For the nine months ended September 30, 2024 and 2023, transmission expenses were $147 and $126, respectively, an increase of 17%, or $21, and increased as a percentage of total Sirius XM revenue. The increases were primarily driven by higher hosting costs associated with our streaming platform as well as higher consulting costs.
Previous wording
We expect our Sirius XM transmission expenses to increase as costs associated with consumers using our new platforms rise and investments in internet streaming grow.
Current wording
We expect our Sirius XM transmission expenses to fluctuate as rising costs associated with consumers using our new platforms are offset by investments in internet streaming.
Previous 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.
Current wording
For the three months ended September 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 nine months ended September 30, 2024 and 2023, cost of equipment was $7 and $10, respectively, a decrease of 30%, or $3, and decreased as a percentage of total Sirius XM revenue. The decreases were driven by fewer sales of satellite radios as well as related components and lower shipping costs.
Previous wording
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 wording
For the three months ended September 30, 2024 and 2023, revenue share and royalties were $317 and $325, respectively, a decrease of 2%, or $8, and decreased as a percentage of total Pandora and Off-platform revenue. For the nine months ended September 30, 2024 and 2023, revenue share and royalties were $942 and $961, respectively, a decrease of 2%, or $19, and decreased as a percentage of total Pandora and Off-platform revenue. The decrease for the three month period was primarily due to lower sound recording royalties. The decrease for the nine month period was primarily due to lower revenue share related to podcasts.
Previous wording
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 wording
For the three months ended September 30, 2024 and 2023, programming and content expenses were $13 and $17, respectively, a decrease of 24%, or $4, and decreased as a percentage of total Pandora and Off-platform revenue. For the nine months ended September 30, 2024 and 2023, programming and content expenses were $44 and $49, respectively, a decrease of 10%, or $5, and decreased as a percentage of total Pandora and Off-platform revenue. The decreases were primarily attributable to lower personnel-related costs, license fees, and event costs.
Previous wording
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 wording
For the three months ended September 30, 2024 and 2023, customer service and billing expenses were $19 and $20, respectively, a decrease of 5%, or $1, and decreased as a percentage of total Pandora and Off-platform revenue. For the nine months ended September 30, 2024 and 2023, customer service and billing expenses were $59 and $63, respectively, a decrease of 6%, or $4, and decreased as a percentage of total Pandora and Off-platform revenue. The decreases were driven by lower bad debt expense.
Previous wording
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 wording
For the three months ended September 30, 2024 and 2023, transmission expenses were $9 and $10, respectively, a decrease of 10%, or $1, and decreased as a percentage of total Pandora and Off-platform revenue. For the nine months ended September 30, 2024 and 2023, transmission expenses were $25 and $27, respectively, a decrease of 7%, or $2, and decreased as a percentage of total Pandora and Off-platform revenue. The decreases were driven by lower bandwidth costs.
Previous wording
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 wording
For the three months ended September 30, 2024 and 2023, subscriber acquisition costs were $90 and $87, respectively, an increase of 3%, or $3, and increased as a percentage of total revenue. For the nine months ended September 30, 2024 and 2023, subscriber acquisition costs were $272 and $270, respectively, an increase of 1%, or $2, and increased as a percentage of total revenue. The increases were driven by contractual changes with certain automakers, partially offset by lower hardware subsidies driven by installations as well as lower commission and hardware subsidy rates.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, sales and marketing expenses were $217 and $237, respectively, a decrease of 8%, or $20, and decreased as a percentage of total revenue. For the nine months ended September 30, 2024 and 2023, sales and marketing expenses were $675 and $680, respectively, a decrease of 1%, or $5, but increased as a percentage of total revenue. The decreases were primarily due to lower streaming, in-car, and programming marketing as well as personnel-related costs. The decrease for the nine month period was partially offset by higher brand and content marketing.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, engineering, design and development expenses were $68 and $72, respectively, a decrease of 6%, or $4, and decreased as a percentage of total revenue. For the nine months ended September 30, 2024 and 2023, engineering, design and development expenses were $224 and $234, respectively, a decrease of 4%, or $10, and decreased as a percentage of total revenue. The decreases were primarily driven by higher capitalized personnel-related costs, partially offset by higher cloud hosting costs.
Previous 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.
Current wording
For the three months ended September 30, 2024 and 2023, general and administrative expenses were $138 and $139, respectively, a decrease of 1%, or $1, but increased as a percentage of total revenue. For the nine months ended September 30, 2024 and 2023, general and administrative expenses were $378 and $468, respectively, a decrease of 19%, or $90, and decreased as a percentage of total revenue. The decreases were primarily driven by 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 as well as lower Former Parent operating costs.
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Current report — wording carried from elsewhere
Sirius XM service is also available through an in-car user interface, called “360L,” that combines Sirius XM’s satellite and streaming services into a single, cohesive in-vehicle entertainment experience.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Among the significant factors that could cause our actual results to differ materially from those expressed in the forward-looking statements are: