Sirius XM Holdings Q2 2024 10-Q Filed

TL;DR

**SIRI 10-Q is IN! Q2 numbers are out, check financials.**

AI Summary

Sirius XM Holdings Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter of 2024. Key financial metrics and business segment information are provided, reflecting the company's ongoing operations in satellite radio broadcasting.

Why It Matters

This filing provides investors with the latest financial results and operational details for Sirius XM, crucial for understanding the company's performance and future outlook.

Risk Assessment

Risk Level: medium — As a publicly traded company, Sirius XM is subject to market fluctuations, competition, and regulatory changes inherent in the broadcasting industry.

Key Numbers

• 2024 Q2 — Reporting Period (Indicates the financial quarter being reported.)
• 12/31 — Fiscal Year End (Specifies the end date of the company's fiscal year.)

Key Players & Entities

• SIRIUS XM HOLDINGS INC. (company) — Filer
• 20240630 (date) — Period of Report
• 20240801 (date) — Filed as of Date
• 0000908937-24-000021 (document_id) — Accession Number

FAQ

Key Financial Figures

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

Filing Documents

• siri-20240630.htm (10-Q) — 1805KB
• exhibit103verbruggejoe-tra.htm (EX-10.3) — 23KB
• exhibit311-20240630.htm (EX-31.1) — 8KB
• exhibit312-20240630.htm (EX-31.2) — 8KB
• exhibit321-20240630.htm (EX-32.1) — 5KB
• exhibit322-20240630.htm (EX-32.2) — 5KB
• 0000908937-24-000021.txt ( ) — 9460KB
• siri-20240630.xsd (EX-101.SCH) — 59KB
• siri-20240630_cal.xml (EX-101.CAL) — 80KB
• siri-20240630_def.xml (EX-101.DEF) — 351KB
• siri-20240630_lab.xml (EX-101.LAB) — 778KB
• siri-20240630_pre.xml (EX-101.PRE) — 563KB
• siri-20240630_htm.xml (XML) — 1420KB

- Financial Information

PART I - Financial Information Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) Consolidated Statements of Comprehensive Income for the three and six months ended J une 3 0 , 2024 and 2023 2 Consolidated Balance Sheets as of June 3 0 , 2024 and December 31, 2023 3 Consolidated Statements of Stockholders' Equity (Deficit) for the three and six months ended June 3 0 , 2024 and 2023 4 Consolidated Statements of Cash Flows for the six months ended June 30 , 2024 and 2023 8 Notes to the Consolidated Financial Statements 10 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 34 Item 3.

Quantitative and Qualitative Disclosures About Market Risks

Quantitative and Qualitative Disclosures About Market Risks 54 Item 4.

Controls and Procedures

Controls and Procedures 54

- Other Information

PART II - Other Information Item 1.

Legal Proceedings

Legal Proceedings 55 Item 1A.

Risk Factors

Risk Factors 55 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 55 Item 3. Defaults Upon Senior Securities 55 Item 4. Mine Safety Disclosures 55 Item 5. Other Information 55 Item 6. Exhibits 55

Signatures

Signatures 57 1 Table of Contents SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) For the Three Months Ended June 30, For the Six Months Ended June 30, (in millions, except per share data) 2024 2023 2024 2023 Revenue: Subscriber revenue $ 1,658 $ 1,725 $ 3,338 $ 3,417 Advertising revenue 443 445 845 819 Equipment revenue 47 47 97 93 Other revenue 30 33 60 65 Total revenue 2,178 2,250 4,340 4,394 Operating expenses: Cost of services: Revenue share and royalties 708 732 1,411 1,432 Programming and content 148 153 305 303 Customer service and billing 108 123 224 246 Transmission 57 50 115 99 Cost of equipment 2 3 5 7 Subscriber acquisition costs 92 93 182 183 Sales and marketing 228 220 457 443 Engineering, design and development 71 83 157 162 General and administrative 108 157 223 303 Depreciation and amortization 133 139 273 275 Impairment, restructuring and acquisition costs 18 18 46 50 Total operating expenses 1,673 1,771 3,398 3,503 Income from operations 505 479 942 891 Other (expense) income: Interest expense ( 102 ) ( 107 ) ( 206 ) ( 213 ) Other income 2 — 14 3 Total other expense ( 100 ) ( 107 ) ( 192 ) ( 210 ) Income before income taxes 405 372 750 681 Income tax expense ( 89 ) ( 62 ) ( 168 ) ( 138 ) Net income $ 316 $ 310 $ 582 $ 543 Foreign currency translation adjustment, net of tax ( 3 ) 7 ( 10 ) 7 Total comprehensive income $ 313 $ 317 $ 572 $ 550 Net income per common share: Basic $ 0.08 $ 0.08 $ 0.15 $ 0.14 Diluted $ 0.08 $ 0.08 $ 0.15 $ 0.14 Weighted average common shares outstanding: Basic 3,848 3,861 3,846 3,875 Diluted 3,855 3,873 3,858 3,892 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) June 30, 2024 December 31, 2023 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 100

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 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 SiriusXM business had approximately 33.3 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 not included in our subscri

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 June 30, 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 June 30, 2024 and for the three and six months ended June 30, 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 re

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: June 30, 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) — $ 8,193 — $ 8,193 — $ 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 June 30, 2024 and December 31, 2023. (3) Restructuring Costs During the three and six months ended June 30, 2024, restructuring costs were $ 3 and $ 15 , respectively. During the six months ended June 30, 2024, we realigned our business to focus on strategic priorities, reducing the size of our workforce, and recorded a charge of $ 15 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 and six months ended June 30, 2023, restructuring costs were $ 5 and $ 35 , respectively. During the six months ended June 30, 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 $ 28 primarily related to severance and other related costs. In addition, we vacated one of our leased locations and recorded an impairment of $ 5 to reduce the carrying value of the related right of use asset to its estimated fair value. Additionally, we accrued expenses of $ 2 for which we will not recognize any future economic benefits. The restructuring and related impairm