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SiriusXM (SIRI) Reaches More Than 30M Subscribers in 2019

Zacks Equity Research

SiriusXM Holdings SIRI added 1.063 million self-pay subscribers in 2019, to reach a user base of more than 30 million. The company had anticipated adding almost 1 million self-pay net subscribers. Moreover, the total paid subscriber base reached 34.9 million, which is a record in the company’s history.

SiriusXM also expects to meet or exceed its 2019 guidance for revenues, adjusted EBITDA and free cash flow. Notably, revenues are expected to be approximately $7.85 billion, while adjusted EBITDA to be $2.4 billion. Free cash flow is expected to be $1.625 billion.

Further, SiriusXM provided the initial 2020 guidance. The company expects to add more than 0.9 million self-pay net subscribers. Total revenues are anticipated to be $8.1 billion, while adjusted EBITDA to be $2.5 billion. Free cash flow is expected to be $1.7 billion.

Strong Content Lineup Aids Subscriber Growth

SiriusXM's focus on strengthening its content portfolio is aiding subscriber growth. Throughout 2019, the company added content from talk shows and sports, apart from music, to boost user engagement.

The company’s strategy of collaborating with artists and organizations has paid well. Partnerships with the likes of Rolling Loud, popular rock band U2, Marvel, Drake, Howard Stern and Senator Al Franken to create exclusive content for SiriusXM subscribers have been successful in attracting subscribers.
 

Sirius XM Holdings Inc. Revenue (TTM)

Sirius XM Holdings Inc. Revenue (TTM)

Sirius XM Holdings Inc. revenue-ttm | Sirius XM Holdings Inc. Quote

SiriusXM rebranded its Hip Hop Nation channel, Rolling Loud Radio, post the collaboration with the largest Hip Hop festival brand in the world. With U2, the company launched U2X Radio. The Marvel deal includes new scripted series, unscripted podcasts and regular talk shows, including a celebrity show.

Moreover, the availability of SiriusXM and Pandora contents on Amazon AMZN Alexa and Echo devices as well as Alphabet’s GOOGL Google Assistant helped attract more subscribers.

Further, SiriusXM’s partnership with NBA to broadcast the 2019-20 season, offering live play-by-play of every game along with in-depth talk and analysis, has been a major growth driver. The company also collaborated with NFL Films for a podcast on NFL 100 Greatest, hosted by James Brown.

SiriusXM further strengthened its footprint in basketball-related content after Mike Krzyzewski, the Hall of Fame head coach of the Duke University Blue Devils, inked a multi-year extension to continue hosting his exclusive show, Basketball and Beyond with Coach K.  

Additionally, renowned artists like Rock Band Mumford & Sons, Taylor Swift, Dave Matthews, Billie Eilish and Halsey performed exclusively for SiriusXM and Pandora listeners in 2019. Notably, the company recently announced that Coldplay will perform “an intimate invitation-only stripped down set for SiriusXM and Pandora listeners” on Jan 15.

Automotive Deals to Boost Top Line

Furthermore, automotive deals with General Motors GM and Nissan are key catalysts. Notably, General Motors will put SiriusXM with 360L into nearly one million selected 2020 Chevrolet, Buick, GMC and Cadillac vehicles.

Moreover, Nissan North America extended its partnership with SiriusXM through the 2028 model year. Per the deal, Nissan and INFINITI vehicles offer SiriusXM with 360L. Additionally, customers purchasing properly equipped Nissan and INFINITI vehicles will receive a three-month subscription to the SiriusXM Traffic and SiriusXM Travel Link infotainment services.

Zacks Rank

SiriusXM currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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