Sirius XM Holdings Inc. (NASDAQ:SIRI) released its December quarter earnings this morning before opening bell. The satellite radio provide reported sales of $1 billion for the quarter, an increase from $892.42 million in the same quarter a year ago. Net income fell, however, to $65.2 million. The company reported earnings of 1 cent per share, a slight miss on expectations.
Analysts had been expecting Sirius XM to report earnings of 2 cents per share on revenue of $981.92 million for the quarter.
Breaking down Sirius XM’s earnings
Sirius XM Holdings Inc. (NASDAQ:SIRI reported record revenue for the full year of 2013. It was $3.8 billion, a 12% increase. Full-year net income was $377 million. The company also reported that adjusted EBITDA climbed 27% during the full year to $1.17 billion, while free cash flow for the full year rose 31% to $927 million. For the fourth quarter, Sirius XM Holdings Inc. (NASDAQ:SIRI) reported a 41% increase in EBITDA for the fourth quarter and several major milestones for the company.
“The fourth quarter of 2013 capped a year of records and milestones for SiriusXM. We delivered our first ever billion dollar revenue quarter, and our first ever quarter with adjusted EBITDA and free cash flow each over $300 million,” said Sirius XM Holdings Inc. (NASDAQ:SIRI) CEO Jim Meyer in a statement. “Our adjusted EBITDA margin of 32.5% in the fourth quarter was the highest in the history of the Company. We remain excited about continuing our track record of delivering profitable growth in 2014, with the goal of enhancing free cash flow while making investments in key long-term initiatives.”
Examining Sirius XM’s key metrics
For the fourth quarter, Sirius XM Holdings Inc. (NASDAQ:SIRI) reported a decline in subscriber acquisition costs, which fell to $124 million to 12% of the company’s adjusted revenue. Sirius said that’s the lowest percentage in its history. The decline was driven by lower per-vehicle subsidy rates. Subscriber acquisition costs per gross addition were $44, a record low and a 19% decline compared to the same quarter of last year.
In addition, Sirius XM Holdings Inc. (NASDAQ:SIRI) reported a new all-time high in self-pay subscribers as it added 411,484 net subscribers, ending the year with 21.1 million subscribers. Paid promotional subscribers declined sequentially, however, as major manufacturers shifted to unpaid trials during the quarter.
For the full year, Sirius XM Holdings Inc. (NASDAQ:SIRI) reported continued subscriber growth with more than 1.6 million total net additions, with total paid subscribers totaling 25.6 million at the end of the year—a 7% increase from 2012.
Sirius XM reiterates guidance for 2014
Sirius XM Holdings Inc. (NASDAQ:SIRI) also reiterated its 2014 guidance for more than $4 billion in revenue and about 1.25 million net subscriber additions. It also guided for adjusted EBITDA of about $1.38 billion and free cash flow of nearly $1.1 billion.