SiriusXM today announced first quarter 2019 operating and financial results — the first since the company completed its acquisition of Pandora Media on Feb. 1 — and its quarterly profit was down 44% from the previous year. It attributed that drop to approximately $76 million of acquisition and other costs related to the Pandora deal, a $31 million one-time benefit to other income in the prior year period and a higher tax rate.
Total revenue of $1.7 billion increased 27% compared to the prior year period, while the company’s net income totaled $162 million in the first quarter, compared to $289 million in the prior year period, according to the announcement. Net income per diluted common share was $0.03 in the first quarter, compared to $0.06 in the prior year period.
Pro forma revenue increased 10% to $1.9 billion in the first quarter, up from $1.7 billion in the prior year period. Adjusted EBITDA grew 27% to $567 million in the first quarter and resulted in an adjusted EBITDA margin of 30.5%, growing over 400 basis points from 26.3% in the first quarter 2018. The adjusted EBITDA margin in the quarter was driven primarily by revenue growth across the combined businesses and cost efficiencies in subscriber acquisition costs and revenue share and royalties, the announcement says.
“We are right where we want to be and moving very fast,” said CEO Jim Meyer (pictured above) on the earnings call. “It’s still the first inning, but I’m pleased with the progress we’ve made so far,” he added, noting that the “hunt for Pandora cost synergies is going better than expected.”
Those synergies include the creation of Pandora’s first-ever content team and the production of the companies’ first joint offering, Pandora NOW, a full-time SiriusXM channel and Pandora station and playlist, curated from Pandora data of the top-trending artists. The companies also announced an array of SiriusXM’s top sports, comedy and talk hosts’ shows are now available as podcasts on Pandora.
Other bright spots cited in the report include the company adding 132,000 net subscribers, with more than 34.2 million total SiriusXM subscribers at the end of the quarter. The company’s first quarter revenue of $1.5 billion grew 8% compared to the prior year period, and gross profit in the quarter totaled $926 million, increasing 8% over the first quarter of 2018, and produced a gross margin of 62%, approximately flat compared to the prior year period.
It also noted that Pandora advertising revenue reached a first quarter record of $231 million, growing 7% over the first quarter of 2018, although monthly active users were down to 66.0 million in the first quarter from 72.3 million in the prior year period.