Sirius XM Holdings Q3 2024 10-Q Filing

TL;DR

SIRI 10-Q filed: Q3 2024 financials out. Check for subscriber numbers and revenue trends.

AI Summary

Sirius XM Holdings Inc. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the third 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 and analysts with the latest financial and operational data for Sirius XM Holdings, crucial for understanding the company's performance and future outlook.

Risk Assessment

Risk Level: medium — The company operates in a competitive media landscape and faces risks related to subscriber retention and technological changes.

Key Numbers

• 0.1 — Fiscal Year End (Indicates the company's fiscal year closes on December 31st.)
• 0.0296947 — Share Value (Represents a specific share-related metric for the reporting period.)
• 0.0116023 — Share Value (Represents another specific share-related metric for the reporting period.)

Key Players & Entities

• SIRIUS XM HOLDINGS INC. (company) — Filer
• 20240930 (date) — Period of Report
• 20241031 (date) — Filed as of Date
• 1290 AVENUE OF THE AMERICAS (address) — Business Address
• 212-584-5100 (phone_number) — Business Phone

FAQ

Key Financial Figures

• $0.001 — ange on which registered Common stock, $0.001 par value SIRI The Nasdaq Stock Market
• $0.01 — iberty SiriusXM common stock, par value $0.01 per share, in exchange for 0.8375 of a

Filing Documents

• siri-20240930.htm (10-Q) — 2057KB
• exhibit311-20240930.htm (EX-31.1) — 10KB
• exhibit312-20240930.htm (EX-31.2) — 10KB
• exhibit32-20240930.htm (EX-32) — 7KB
• 0000908937-24-000028.txt ( ) — 10557KB
• siri-20240930.xsd (EX-101.SCH) — 67KB
• siri-20240930_cal.xml (EX-101.CAL) — 85KB
• siri-20240930_def.xml (EX-101.DEF) — 427KB
• siri-20240930_lab.xml (EX-101.LAB) — 732KB
• siri-20240930_pre.xml (EX-101.PRE) — 573KB
• siri-20240930_htm.xml (XML) — 1725KB

- Financial Information

PART I - Financial Information Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 2 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 3 Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 4 Consolidated Statements of Equity for the three and nine months ended September 30, 2024 and 2023 5 Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 9 Notes to the Consolidated Financial Statements 11 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 39 Item 3.

Quantitative and Qualitative Disclosures About Market Risks

Quantitative and Qualitative Disclosures About Market Risks 59 Item 4.

Controls and Procedures

Controls and Procedures 59

- Other Information

PART II - Other Information Item 1.

Legal Proceedings

Legal Proceedings 59 Item 1A.

Risk Factors

Risk Factors 60 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 63 Item 3. Defaults Upon Senior Securities 63 Item 4. Mine Safety Disclosures 64 Item 5. Other Information 64 Item 6. Exhibits 64

Signatures

Signatures 67 1 Table of Contents SIRIUS XM HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months Ended September 30, For the Nine Months Ended September 30, (in millions, except per share data) 2024 2023 2024 2023 Revenue: Subscriber revenue $ 1,645 $ 1,729 $ 4,983 $ 5,146 Advertising revenue 450 460 1,295 1,278 Equipment revenue 43 49 140 142 Other revenue 33 33 93 99 Total revenue 2,171 2,271 6,511 6,665 Operating expenses: Cost of services: Revenue share and royalties 707 731 2,118 2,162 Programming and content 150 153 456 456 Customer service and billing 110 116 335 363 Transmission 57 54 172 153 Cost of equipment 2 3 7 10 Subscriber acquisition costs 90 87 272 270 Sales and marketing 217 237 675 680 Engineering, design and development 68 72 224 234 General and administrative 138 139 378 468 Depreciation and amortization 145 145 455 460 Impairment, restructuring and other costs 3,388 6 3,441 56 Total operating expenses 5,072 1,743 8,533 5,312 (Loss) income from operations ( 2,901 ) 528 ( 2,022 ) 1,353 Other income (expense), net Interest expense ( 124 ) ( 134 ) ( 379 ) ( 404 ) Gain on extinguishment of debt — 27 — 27 Other income (expense), net 28 ( 51 ) 142 ( 17 ) Total other expense ( 96 ) ( 158 ) ( 237 ) ( 394 ) (Loss) income before income taxes ( 2,997 ) 370 ( 2,259 ) 959 Income tax benefit (expense) 39 ( 79 ) ( 103 ) ( 199 ) Net (loss) income ( 2,958 ) 291 ( 2,362 ) 760 Less net (loss) income attributable to noncontrolling interests ( 502 ) 57 ( 410 ) 146 Net (loss) income attributable to Sirius XM Holdings Inc. $ ( 2,456 ) $ 234 $ ( 1,952 ) $ 614 Net (loss) income per common share: Basic $ ( 8.74 ) $ 0.86 $ ( 7.01 ) $ 2.24 Diluted $ ( 8.74 ) $ 0.82 $ ( 7.01 ) $ 2.12 Weighted average common shares outstanding: Basic 339 337 337 339 Diluted 339 360 337 360 See accompanying notes to the unaudited consolidated financial statements. 2 Table of Contents SIRIUS XM HOLDING

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars and shares in millions, except per share amounts or otherwise stated) (1) Business & Basis of Presentation Liberty Media Transactions 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 on Monday, September 9, 2024. 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. 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 SplitCo (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 SplitCo 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. At the Merger Effective Time, Old Sirius was renamed "Sirius XM Inc." and SplitCo was renamed "Sirius

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (UNAUDITED) (Dollars and shares in millions, except per share amounts or otherwise stated) 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 resources to an individual segment and in assessing performance of the segment. We have determined that we have two reportable segments as our chief operating decision maker, who is the Chief Executive Officer of Sirius XM Holdings, assesses performance and allocates resources based on the financial results of these segments. Refer to Note 16 for information related to our segments. We have evaluated events subsequent to the balance sheet date and prior to the filing of this Quarterly Report on Form 10-Q and have determined that no events have occurred that would require adjustment to our unaudited consolidated financial statements. Disclosure of relevant subsequent events have been included throughout these unaudited consolidated financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Estimates, by their nature, are based on judgment and available information. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the accompanying unaudited consolidated financial statements include asset impairment, fair value measurement of non-financial instruments, depreciable lives of our satellites, share-based payment expense and income taxes.

Business

Business Sirius XM Holdings operates 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". Sirius XM 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 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 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. 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 satellite radios and accessories, and other ancillary services. As of September 30, 2024, the Sirius XM business had approximately 33.2 million subscribers. In addition to the audio entertainment businesses, Sirius XM Holdings provides connected vehicle services to several automakers. These services are designed to enhance the safety, security and driving experience of consumers. Sirius XM Holdings 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. Sirius XM holds a 70 % equity interest and 33 % voting interest in Sirius XM Canada Holdings Inc. ("Sirius XM Canada")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (UNAUDITED) (Dollars and shares in millions, except per share amounts or otherwise stated) 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. Effects of the Transactions Prior to the closing of the Transactions, a portion of Liberty Media's general and administrative expenses, including certain legal, tax, accounting, t