TORONTO – SiriusXM Canada credited subscriber growth for its “record” fiscal 2015 third quarter revenue and surge in profits.
For the period ended May 31, 2015, revenue grew 9.4% to $83.1 million from normalized revenue of $76.0 million in Q3 2014, reflecting growth in the self-paying subscriber base and an increase in Self-Pay ARPU. Net income skyrocketed 94.5% to $8.0 million compared to a $4.1 million year-over-year, after normalizing for the one-time after-tax debt refinancing charge and after-tax adjustments due to certain OEM contracts renewals.
Adjusted EBITDA increased by 10.6% to $20.2 million in Q3 FY2015 from $18.3 million, excluding the impact of certain OEM contract renewals, in Q3 FY2014. The year-over-year increase was a result of revenue growth and marketing related cost savings, which were offset, in part, primarily by a higher cost of revenue due to an increase in the company's copyright royalties.
For the Q3 2014 and YTD 2015 periods, there were one-time events that affected the company's results. In Q3 2014, the company redeemed $130.8 million outstanding 9.75% senior notes that were due 2018, resulting in a total pre-tax debt refinancing charge of $16.6 million (after-tax – $12.2 million). In addition, in Q3 2014 the company renewed agreements with two OEM partners, and the changes to these contracts were applied retroactively from the beginning of fiscal 2014 and were fully reflected in the Q3 2014 financial results. As a result, $1.5 million in revenue, $4.1 million in revenue share and royalties and $2.1 million in subsidy costs from previous periods were reversed in Q3 2014.
For the YTD 2015 period, the company recognized a one-time, non-cash $19.1 million income tax expense and a $15.9 million withholding tax expense in Q2 2015 related to Canada Revenue Agency reassessments that it is currently disputing.
Sirius XM Canada saw self-paying subscribers grow 4.0% from 1.80 million at this time last year to 1.90 million this quarter, bringing its total subscriber base to 2.66 million.
President and CEO Mark Redmond said that the completion of the unification of the company’s subscriber management system will allow the company to provide “improved levels of customer service, while also driving more effective and efficient subscriber acquisition, conversion and retention”.
"We set a new revenue record in the quarter, fueled by further expansion of our subscriber base and improvements in self-pay ARPU," said Redmond, in the news release. "Our top-line growth more than offset our higher copyright fees, translating into double-digit year-over-year increases in Adjusted EBITDA and free cash flow. We saw strong subscriber net additions in June, keeping us confident that we are on-track to achieve 2015 net self-pay subscriber growth in the mid-single digits. We firmly believe in our ability to deliver continued growth as well as a supportable dividend."
SiriusXM Canada has partnerships with every major automaker and its radio products are available at more than 2,500 retail locations nationwide.
