A letter to shareholders (and filed with the SEC) from SiriusXM’s CEO Jim Meyer painted a rosy picture of the company’s overall status, and reminding them that the pay-radio business closed its 2017 trading year with a record 32.7 million overall subscribers, with record growth, revenues ($5.4 billion) and profits. The company’s AGM is due on June 5th. SiriusXM is 70.56 per cent controlled by Liberty Media.
“We are continuing to win in the new car market. Despite slowing auto sales versus 2016 levels, we still improved new car conversion rates and increased new car penetration to 76.6 per cent. By the end of 2017, the fleet of SiriusXM-enabled cars grew to over 100 million. As it continues to climb, the pool of vehicles from which we can drive reactivations and used car additions will grow as well,” said Meyer.
“Importantly, our used vehicle penetration rate is up to approximately 35 per cent and we believe that over the next decade we can increase that level to match the mid-70’s we currently have in new cars. Our team continues to focus on offering trials at more used car dealerships. We now have arrangements at more than 18,000 franchise dealers and at approximately 12,500 independent dealers to offer trials. The independent dealer market represents a growth opportunity for us.”
Meyer added that SiriusXM had worded with Amazon on its Alexa-powered range of services, and “We’re implementing better smartphone apps, including a new version that will align our mobile experience with 360L in the car, and we will soon introduce a video content offering for the first time.”
“In September, we closed our strategic investment in Pandora Media and David Frear, Greg Maffei and I joined its board. We have long admired Pandora’s massive user base and popular free consumer offering, and we support the company’s efforts to drive toward profitability and cash flow growth. That said, we still have a lot to learn about how our companies might work together in the future, be it on up-selling, cross-selling, sharing content or sharing technology.”
He reminded shareholders that 2018 had started well. “Our business model is working and we are excited about the many opportunities we have in front of us. In 2018, we expect revenue of approximately $5.7 billion, with adjusted EBITDA of approximately $2.15 billion and free cash flow of roughly $1.5 billion. We will also continue to return substantial capital to stockholders through our dividend and share repurchase programme.”