Sirius XM’s first quarter results were met with a negative market reaction, as revenue declined year-over-year and fell short of Wall Street expectations. Management attributed the softness to lower subscriber and equipment revenue, modest advertising trends, and ongoing macroeconomic uncertainty. CEO Jennifer Witz highlighted a significant improvement in in-car subscriber churn and stable customer satisfaction, noting that “churn improved 18 basis points, rounding to 1.6% in the first quarter,” even after recent price increases. The company’s core in-car business offset declines in streaming-only subscribers, while advertising revenue remained essentially flat, weighed down by softness in travel, auto, and retail sectors.
Is now the time to buy SIRI? Find out in our full research report (it’s free).
Sirius XM (SIRI) Q1 CY2025 Highlights:
- Revenue: $2.07 billion vs analyst estimates of $2.08 billion (4.3% year-on-year decline, 0.6% miss)
- Adjusted EPS: $0.67 vs analyst estimates of $0.66 (1.8% beat)
- Adjusted EBITDA: $629 million vs analyst estimates of $608.5 million (30.4% margin, 3.4% beat)
- The company reconfirmed its revenue guidance for the full year of $8.5 billion at the midpoint
- EBITDA guidance for the full year is $2.6 billion at the midpoint, above analyst estimates of $2.58 billion
- Operating Margin: 18.7%, down from 20.2% in the same quarter last year
- Subscribers: 8.19 million
- Market Capitalization: $7.59 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Sirius XM’s Q1 Earnings Call
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Sebastiano Petti (JP Morgan) asked why full-year EBITDA guidance did not reflect upside given cost savings and easier ARPU comparisons. CFO Tom Barry reiterated that cost initiatives are on target but savings may be reinvested later in the year, and that guidance reflects current subscriber and revenue trends.
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Kutgun Maral (Evercore ISI) pressed for more detail on subscriber churn improvements. CEO Jennifer Witz emphasized high satisfaction among the core subscriber base and said there were no concerning trends in voluntary or non-payment churn despite recent price increases.
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Steven Cahall (Wells Fargo) requested clarification on the margin impact and strategic intent of the new ad-supported tier. COO Wayne Thorsen and Witz explained it will be tested in targeted segments, with expectations that it will be margin neutral to accretive, and will ramp more meaningfully next year.
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Jessica Reif Ehrlich (Bank of America) asked about changes to the advertising sales approach and podcast monetization. Witz described a growing focus on cross-channel ad packages and self-serve tools, with podcasting a strong revenue growth area.
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Barton Crockett (Rosenblatt Securities) inquired about Sirius XM’s tariff exposure and auto market risk. Witz and Barry said tariff impacts are limited due to the company’s recurring revenue model and strong presence in the used car market, with only indirect supply chain exposure.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely watch (1) the adoption and early performance of Sirius XM’s new ad-supported subscription tier, (2) progress toward achieving targeted cost savings and sustaining margin improvements, and (3) the trajectory of the advertising and podcasting businesses amid shifting macro conditions. Additional attention will be paid to subscriber engagement trends and developments in automotive partnerships.
Sirius XM currently trades at $22.55, up from $21.40 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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