This is going to be a big month -- and a big year -- for Sirius XM Holdings (NASDAQ:SIRI). The satellite radio provider offered up a sneak peek of some of its fourth-quarter performance metrics and initiated guidance for the year ahead shortly after Tuesday's market close. Pandora (NYSE:P) investors are also set to vote on Sirius XM's acquisition offer in three weeks, on the morning of Jan. 29.
Sirius XM closed out 2018 with 28.9 million self-pay subscribers, 1.4 million more than it had when the year began. Total paid subscribers rose 1.3 million over the past 12 months to hit 34 million. Sirius XM didn't blurt out its actual financial metrics, but it did announce that it expects to meet or exceed its earlier guidance for revenue, adjusted EBITDA, and free cash flow. In short, there shouldn't be any bombshells going off when it makes the numbers official in a few weeks.
These go to eleven
Sirius XM shares have been surprisingly resilient. Investors have been treated to 10 consecutive years of positive returns, and 2019 is off to a strong start. The stock has moved 11% higher through the first five trading days of the new year.
- 2009: Up 383.3%
- 2010: 170.7%
- 2011: 12.1%
- 2012: 58.5%
- 2013: 22.9%
- 2014: 0.3%
- 2015: 16.3%
- 2016: 9.5%
- 2017: 21.5%
- 2018: 7.3%
- 2019: 11.2% (so far)
It's fair to say that the first five years of this rally were far more lucrative than the last five years. The stock's biggest year over the past five is the rather modest 21.5% it scored in 2017. Only one of the first five years delivered a lower return than that. However, there's a creature comfort to the stock's stability these days. The stock's five-year beta clocks in at a yawn-inducing 1.07, with its one-year beta checking in at an even more pedestrian 0.91.
Sirius XM sees another year of slow-yet-steady growth on all fronts in 2019. The guidance it initiated on Tuesday afternoon is calling for $6.1 billion in revenue, $2.3 billion in adjusted EBITDA, and $1.6 billion in free cash flow, rising 6.6%, 2.5%, and 6.7%, respectively, off its latest 2018 outlook.
Sirius XM also said it expects self-pay net additions to approach 1 million in 2019, a number that may be disheartening to anyone who doesn't have a sense for how things tend to play out for the media giant. Sirius XM was also targeting net additions of self-pay accounts to decelerate to 1 million in 2018 when the year began. It wound up blasting through that target by 40% to hit 1.4 million. Conservative guidance has been the default setting at the satellite radio monopoly over the years, and it's paid off for investors who haven't experienced a down year in more than a decade now. The odds favor another winning year for Sirius XM, and it's already taken a few big steps in that direction this young month.
Check out the latest Sirius XM earnings call transcript.