Sirius XM Holdings Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Sirius XM Holdings Inc. filed its Q1 2024 10-Q report on April 30, 2024.</b>

AI Summary

SIRIUS XM HOLDINGS INC. (SIRI) filed a Quarterly Report (10-Q) with the SEC on April 30, 2024. Sirius XM Holdings Inc. reported financial results for the first quarter of 2024. The filing is a 10-Q, indicating a quarterly report. The report covers the period from January 1, 2024, to March 31, 2024. The company's fiscal year ends on December 31st. The filing was made on April 30, 2024.

Why It Matters

For investors and stakeholders tracking SIRIUS XM HOLDINGS INC., this filing contains several important signals. This filing provides investors with the latest financial performance and operational updates for Sirius XM Holdings Inc. during the first quarter of 2024. Understanding the details within this 10-Q is crucial for assessing the company's current financial health, revenue streams, and any potential risks or opportunities.

Risk Assessment

Risk Level: low — SIRIUS XM HOLDINGS INC. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not appear to contain any immediate red flags or significant negative disclosures.

Analyst Insight

Review the detailed revenue breakdown and key financial metrics in the 10-Q to understand the company's performance trends and inform investment decisions.

Key Numbers

• 2024-03-31 — Period End Date (Quarterly Report)
• 2024-01-01 — Period Start Date (Quarterly Report)
• 2024-04-30 — Filing Date (10-Q Filing)
• 12/31 — Fiscal Year End (Company Fiscal Year)

Key Players & Entities

• SIRIUS XM HOLDINGS INC. (company) — Filer
• 0000908937-24-000014 (filing_id) — Accession Number
• 20240331 (date) — Conformed Period of Report
• 20240430 (date) — Filed As Of Date
• 1290 AVENUE OF THE AMERICAS (address) — Business Address
• NEW YORK (location) — Business Address City
• NY (state) — Business Address State
• 10104 (zip_code) — Business Address Zip

FAQ

Industry Context

Sirius XM Holdings Inc. operates in the radio broadcasting industry, primarily offering satellite radio services.

Regulatory Implications

The company is subject to standard SEC reporting requirements for publicly traded entities, including the filing of quarterly (10-Q) and annual (10-K) reports.

What Investors Should Do

1. Analyze the revenue segments (Subscription, Advertising, Equipment, etc.) for Q1 2024.
2. Examine any changes in operating expenses and their impact on profitability.
3. Review the balance sheet for key financial health indicators like cash, debt, and equity.

Key Dates

• 2024-03-31: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-04-30: Filing Date — Date the 10-Q report was officially filed with the SEC.

Year-Over-Year Comparison

This is the Q1 2024 10-Q filing, providing an update from the previous fiscal year-end report.

Key Financial Figures

• $0.001 — ange on which registered Common stock, $0.001 par value SIRI The Nasdaq Stock Market

Filing Documents

• siri-20240331.htm (10-Q) — 1391KB
• exhibit311-20240331.htm (EX-31.1) — 8KB
• exhibit312-20240331.htm (EX-31.2) — 8KB
• exhibit321-20240331.htm (EX-32.1) — 5KB
• exhibit322-20240331.htm (EX-32.2) — 5KB
• 0000908937-24-000014.txt (&nbsp;) — 8144KB
• siri-20240331.xsd (EX-101.SCH) — 59KB
• siri-20240331_cal.xml (EX-101.CAL) — 80KB
• siri-20240331_def.xml (EX-101.DEF) — 349KB
• siri-20240331_lab.xml (EX-101.LAB) — 682KB
• siri-20240331_pre.xml (EX-101.PRE) — 509KB
• siri-20240331_htm.xml (XML) — 1165KB

- Financial Information

PART I - Financial Information Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) Consolidated Statements of Comprehensive Income for the three months ended March 3 1 , 202 4 and 20 23 2 Consolidated Balance Sheets as of March 31 , 202 4 and December 31, 20 23 3 Consolidated Statements of Stockholders' Equity (Deficit) for the three months ended March 31, 2024 and 2023 4 Consolidated Statements of Cash Flows for the three months ended March 31 , 202 4 and 20 23 6 Notes to the Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risks

Quantitative and Qualitative Disclosures About Market Risks 46 Item 4.

Controls and Procedures

Controls and Procedures 46

- Other Information

PART II - Other Information Item 1.

Legal Proceedings

Legal Proceedings 46 Item 1A.

Risk Factors

Risk Factors 47 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 47 Item 3. Defaults Upon Senior Securities 47 Item 4. Mine Safety Disclosures 47 Item 5. Other Information 47 Item 6. Exhibits 47

Signatures

Signatures 49 1 Table of Contents SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) For the Three Months Ended March 31, (in millions, except per share data) 2024 2023 Revenue: Subscriber revenue $ 1,680 $ 1,691 Advertising revenue 402 375 Equipment revenue 50 46 Other revenue 30 32 Total revenue 2,162 2,144 Operating expenses: Cost of services: Revenue share and royalties 703 700 Programming and content 157 150 Customer service and billing 116 122 Transmission 59 49 Cost of equipment 2 3 Subscriber acquisition costs 90 90 Sales and marketing 229 224 Engineering, design and development 86 79 General and administrative 115 147 Depreciation and amortization 140 136 Impairment, restructuring and acquisition costs 28 32 Total operating expenses 1,725 1,732 Income from operations 437 412 Other (expense) income: Interest expense ( 104 ) ( 107 ) Other income 12 3 Total other expense ( 92 ) ( 104 ) Income before income taxes 345 308 Income tax expense ( 80 ) ( 75 ) Net income $ 265 $ 233 Foreign currency translation adjustment, net of tax ( 7 ) — Total comprehensive income $ 258 $ 233 Net income per common share: Basic $ 0.07 $ 0.06 Diluted $ 0.07 $ 0.06 Weighted average common shares outstanding: Basic 3,845 3,889 Diluted 3,865 3,939 See accompanying notes to the unaudited consolidated financial statements. 2 Table of Contents SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in millions, except per share data) March 31, 2024 December 31, 2023 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 71 $ 216 Receivables, net 614 709 Related party current assets 33 36 Prepaid expenses and other current assets 360 310 Total current assets 1,078 1,271 Property and equipment, net 1,820 1,754 Intangible assets, net 2,882 2,905 Goodwill 3,249 3,249 Equity method investments 1,465 526 Deferred tax assets 155 155 Operating lease righ

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars and shares in millions, except per share amounts) (1) Business & Basis of Presentation This Quarterly Report on Form 10-Q presents information for Sirius XM Holdings Inc. and its subsidiaries (collectively "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.

Business

Business 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". SiriusXM Our SiriusXM 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. SiriusXM packages include live, curated and certain exclusive and on demand programming. The SiriusXM 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. The primary source of revenue from our SiriusXM 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 SiriusXM business had approximately 33.4 million subscribers. 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. SiriusXM also holds a 70 % equity interest and 33 % voting interest in Sirius XM Canada Holdings Inc. ("Sirius XM Canada"). Sirius XM Canada's subscribers are no

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (UNAUDITED) (Dollars and shares in millions, except per share amounts) which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions. Liberty Media As of March 31, 2024, Liberty Media Corporation ("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. Refer to Note 10 for more information regarding related parties. Basis of Presentation The accompanying unaudited consolidated financial statements of Holdings have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). All significant intercompany transactions have been eliminated in consolidation. Certain numbers in our prior period unaudited consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation. In the opinion of our management, all normal recurring adjustments necessary for a fair presentation of our unaudited consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 have been made. Interim results are not necessarily indicative of the results that may be expected for a full year. This Quarterly Report on Form 10-Q should be read together with our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 1, 2024. Public companies are required to disclose certain information about their reportable operating segments. Operating segments are defined as significant components of an enterprise for which separate financial information is available and is evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resourc

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (UNAUDITED) (Dollars and shares in millions, except per share amounts) (2) Summary of Significant Accounting Policies Recent Accounting Pronouncements Accounting Standard Update 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09") . In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are evaluating the disclosure requirements related to the new standard. Accounting Standard Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07") . In November 2023, the FASB issued ASU 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We are evaluating the disclosure requirements related to the new standard. Recently Adopted Accounting Policies In March 2023, the FASB issued ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method , which expands the population of investments for which an investor may elect to apply the proportional amortization method. Under this ASU, an investor in a tax equity investment may elect the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (UNAUDITED) (Dollars and shares in millions, except per share amounts) Our liabilities measured at fair value were as follows: March 31, 2024 December 31, 2023 Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Liabilities: Debt (a) — $ 8,478 — $ 8,478 — $ 8,523 — $ 8,523 (a) The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm. Refer to Note 11 for information related to the carrying value of our debt as of March 31, 2024 and December 31, 2023. (3) Restructuring Costs During the three months ended March 31, 2024, we further realigned our business to focus on strategic priorities, reducing the size of our workforce, and recorded a charge of $ 12 primarily related to severance and other related costs. The restructuring charges were recorded to Impairment, restructuring and acquisition costs in our unaudited consolidated statements of comprehensive income. During the three months ended March 31, 2023, we initiated measures to pursue greater efficiency and to realign our business and focus on strategic priorities. As part of these measures, we reduced the size of our workforce by approximately 475 roles, or 8 %. We recorded a charge of $ 23 primarily related to severance and other employee costs. In addition, we vacated one of our leased locations. We assessed the recoverability of the carrying value of the operating lease right of use asset related to this location and determined that the carrying value of the asset was not recoverable. As a result, we recorded an impairment of $ 5 to reduce the carrying value of the asset to its estimated fair value. Additionally, we accrued expenses of $ 2 for which we will not recognize any future economic benefits, and we wrote off fixed assets of less than $ 1 in connection with furniture and equipment located at the impaired office space. The total restructuring and related i

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (UNAUDITED) (Dollars and shares in millions, except per share amounts) Common stock equivalents of 143 and 162 for the three months ended March 31, 2024 and 2023, respectively, were excluded from the calculation of diluted net income per common share as the effect would have been anti-dilutive. For the Three Months Ended March 31, 2024 2023 Numerator: Net Income available to common stockholders for basic net income per common share $ 265 $ 233 Effect of interest on assumed conversions of convertible notes, net of tax — 1 Net Income available to common stockholders for dilutive net income per common share $ 265 $ 234 Denominator: Weighted average common shares outstanding for basic net income per common share 3,845 3,889 Weighted average impact of assumed convertible notes — 32 Weighted average impact of dilutive equity instruments 20 18 Weighted average shares for diluted net income per common share 3,865 3,939 Net income per common share: Basic $ 0.07 $ 0.06 Diluted $ 0.07 $ 0.06 (5) Receivables, net Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables. We do not have any customer receivables that individually represent more than ten percent of our receivables. Customer accounts receivable, net, includes receivables from our subscribers and advertising customers, including advertising agencies and other customers, and is stated at amounts due, net of an allowance for doubtful accounts. Our allow