Company Reports

Sirius XM offers two different listening platforms to consumers: SiriusXM and Pandora. SiriusXM makes up 75% of total company revenue and 85% of gross profit. The firm also owns a podcast network, which licenses its podcasts to other platforms, and an advertising platform that sells advertising on and off Sirius’ platforms.

With 1% year-over-year revenue growth, SiriusXM increased its second-quarter EBITDA margin by 1 percentage point and expanded free cash flow substantially. The firm modestly raised its 2026 outlook.

Sirius XM's first-quarter sales grew 1% year over year, marking the best quarter on the top line since 2022. Much-improved levels of subscriber losses at SiriusXM and positive pricing trends led to the result. Off-platform ad revenue growth is accelerating and is becoming material to results.

Sirius XM offers two different listening platforms to consumers: SiriusXM and Pandora. SiriusXM makes up 75% of total company revenue and 85% of gross profit. The firm also owns a podcast network, which licenses its podcasts to other platforms, and an advertising platform that sells advertising on and off Sirius’ platforms.

After raising full-year guidance following the third quarter, Sirius XM's fourth-quarter revenue, EBITDA, and free cash flow all exceeded the heightened expectations. Free cash flow increased 24% in 2025, to $1.3 billion, while full-year revenue and EBITDA were both down about 2%.

In our view, SiriusXM is fighting an uphill battle, as the technology that once gave it a unique offering and an advantage over competitors is no longer necessary for a subscription service in vehicles. We now see SiriusXM’s primary competition as streaming music providers that rely on internet connectivity rather than terrestrial radio, and we believe those services offer a better value proposition for most consumers.

Sirius XM saw areas of improvement but still reported third-quarter sales and profit declines along with subscriber losses. Advertising remained a bright spot, and free cash flow was good and is set for growth acceleration. Management also said it was looking to unlock value in its spectrum assets.

Sirius XM continues to optimize its SiriusXM strategy—to some benefit—and see strength in podcasting. However, "success" with SiriusXM merely means slowing the long-term decline, and strength in podcasting has been more than offset by weakness at Pandora, which we expect to continue.

In our view, Sirius XM is fighting an uphill battle as the technology that once gave it a unique offering and an advantage over competition is no longer necessary to offer a subscription service in vehicles. We now see Sirius XM’s primary competition as streaming music providers that rely on internet connectivity rather than terrestrial radio stations, and we believe those services provide the better value proposition for most consumers.

Sales metrics remained weak at Sirius XM in the first quarter. The firm lost another 303,000 self-pay SiriusXM subscribers, average revenue per subscriber continued its descent, and the firm again cited a weak advertising market. Total sales were down 4%, while adjusted EBITDA was down 3%.

In our view, Sirius XM is fighting an uphill battle as the technology that once gave it a unique offering and an advantage over competition is no longer necessary to offer a subscription service in vehicles. We now see Sirius XM’s primary competition as streaming music providers that rely on internet connectivity rather than terrestrial radio stations, and we believe those services provide the better value proposition for most consumers.

Sirius XM's revenue again declined at a mid-single-digit clip in the fourth quarter. The firm grew its SiriusXM subscriber base for the first time in six quarters, but average revenue per user continues to drop. Margins were flat as cost savings have been reinvested in the business.

In our view, Sirius XM is fighting an uphill battle as the technology that once gave it a unique offering and an advantage over competition is no longer a necessity to offer a subscription service in vehicles. We now see Sirius XM’s primary competition coming from streaming music providers that rely on internet connectivity rather than from terrestrial radio stations, and we believe those services provide the better value proposition for most consumers.

Sirius XM is undertaking several initiatives to drive subscribers back to its SiriusXM service, and it saw encouraging results on that front in the third quarter. Monetization is a different story, with the firm’s revenue decline accelerating and management reducing its full-year outlook. We believe the balance between growing subscribers and offering attractive prices will remain Sirius XM’s primary challenge. It faces competition from streaming music providers while having no discernible moat, in our view, to give it an edge without competing on price and paying up for content rights. We maintain our $30 fair value estimate.

We are updating our moat ratings for Spotify and Sirius XM, with Spotify going to a narrow moat from none previously and Sirius XM going to no-moat from narrow.

In our view, Sirius XM is fighting an uphill battle as the technology that once gave it a unique offering and an advantage over competition is no longer a necessity to offer a subscription service in vehicles. We now see Sirius XM’s primary competition coming from streaming music providers that rely on internet connectivity rather than from terrestrial radio stations, and we believe those services provide the better value proposition for most consumers.

While Sirius XM has made progress with cost efficiencies, it continues to struggle with sales and retaining subscribers at its core SiriusXM business. The firm is pursuing several initiatives that we think hold promise, but we don’t expect these to be near-term solutions to a declining customer base, and we expect Sirius to face a tough competitive environment. We are maintaining our $5 fair value estimate.

SiriusXM's first quarter was not bad, but revenue remains stagnant, and the SiriusXM subscriber base has continued to contract. With investment in content and technology to improve the SiriusXM streaming app and integration into vehicles, management expects subscriber growth to pick up. However, we are now forecasting slower long-term growth, and we're reducing our fair value estimate from $7.50 to $5.

Sirius XM Holdings consists of two businesses: SiriusXM and Pandora. SiriusXM transmits music, talk shows, sports, and news via its satellite radio network, primarily to consumers who pay a subscription fee, often tied to a vehicle. Its radios come preinstalled on a wide range of cars and trucks in the US. Most of the stations on the SiriusXM network are proprietary, differentiating the service from streaming music and terrestrial radio.

Sirius XM Holdings consists of two businesses: SiriusXM and Pandora. SiriusXM transmits music, talk shows, sports, and news via its satellite radio network, primarily to consumers who pay a subscription fee, often tied to a vehicle. Its radios come preinstalled on a wide range of cars and trucks in the US. Most of the stations on the SiriusXM network are proprietary, differentiating the service from streaming music and terrestrial radio.