SiriusXM announced second quarter 2014 financial and operating results, including revenue of $1.035 billion, up 10% from the second quarter 2013. Net income was $120 million, or $0.02 per diluted share, in the second quarter of 2014.
Adjusted net income climbed 60% to $131 million in the second quarter of 2014 from $82 million in the second quarter of 2013. Adjusted EBITDA for the second quarter of 2014 reached a record $370 million, up 31% from $283 million in the second quarter of 2013.
"SiriusXM once again posted outstanding results in the second quarter by adding 475,000 total net new subscribers, including 380,000 net new self-pay subscribers. We set new records for trial conversions to self-pay, adjusted EBITDA and adjusted EBITDA margin in the quarter, and we are raising our 2014 guidance for revenue, adjusted EBITDA, and free cash flow," stated Jim Meyer, Chief Executive Officer, SiriusXM.
"Our extraordinary operating performance supported the buyback of over 350 million shares in the quarter, or approximately 6% of our outstanding stock. Perhaps more importantly, we improved our superior content by adding even more channels and shows created with major brands and personalities, such as Joel Osteen, NBC's TODAY Show, and YouTube, and we expanded the range and depth of our commercial-free music programming with the introduction of three new channels in the categories of country, women's pop, and dance," added Meyer. "As the leader in audio entertainment, we never rest in searching for new content that our subscribers will love."
Additional financial and operating highlights of the second quarter include:
Subscribers Exceed 26.3 Million. Net subscriber additions in the second quarter of 2014 were 475,472. The total paid subscriber base reached a record 26.3 million, up 5% from a year earlier. Self-pay net subscriber additions were 379,711, and the self-pay subscriber base reached a record high of 21.6 million, up 7% from the second quarter of 2013. Paid and unpaid trials combined to produce a total trial funnel of 7.3 million at the end of the second quarter of 2014, the largest in our history.
Adjusted EBITDA and Adjusted EBITDA Margin Highest Ever. Adjusted EBITDA climbed 31% from the second quarter of 2013 to a record quarterly amount of $370 million. The Company's adjusted EBITDA margin reached a record 35.7% in the second quarter of 2014, up approximately 570 basis points from the second quarter of 2013.
Free Cash Flow Per Share Climbs 47%. Free cash flow in the second quarter of 2014 was $335 million, up 42% from $237 million in the second quarter of 2013. Free cash flow per diluted share was 5.4 cents in the second quarter of 2014, up 47% from 3.7 cents in the second quarter of 2013.
"Since we launched our capital return program in late 2012, we have returned approximately $3.75 billion to stockholders in less than two years," noted David Frear, Chief Financial Officer, SiriusXM.
"On July 15th, our Board of Directors increased our cumulative share repurchase authorization to $6 billion. Total debt-to-adjusted EBITDA at the end of the second quarter 2014 was 3.5 times, and our $1.25 billion revolving credit was undrawn, leaving us ample liquidity to return capital to shareholders and pursue strategic opportunities as they arise," added Frear.