SiriusXM announced its financial results for the first quarter of 2023 during a Thursday morning earnings call. CEO Jennifer Witz highlighted the company’s performance alongside outgoing CFO Sean Sullivan while introducing incoming CFO Tom Barry.
Revenue for Q1 2023 reached $2.14 billion, representing a 2% decrease compared to the same period last year. SXM reported a net income of $233 million, down from $309 million in Q1 2022, with net income per diluted common share at $0.06, compared to $0.08 the previous year. Adjusted EBITDA stood at $625 million, and free cash flow amounted to $144 million.
Witz emphasized that SiriusXM outperformed expectations, crediting better-than-expected ad revenue from self-service and programmatic channels. While the company aims to focus more on streaming, in-car entertainment remains its largest revenue generator. Trial startups saw a 3% decrease in new cars and a 7% decrease in used cars during Q4, resulting in fewer conversion opportunities in Q1. However, trial startups overall were up by 7% in the first quarter. The company experienced a subscription churn rate of 1.6%.
SiriusXM also experienced a boost in podcast ad revenue, which increased by 34% during the first quarter, demonstrating the positive momentum in the podcasting industry.
SiriusXM still expects “modestly negative” growth in new subscriptions for the year, but anticipates a stronger performance in the latter half of 2023. They aim to attract more customers through the widespread launch of their data-driven platform, 360L, which is currently available in 30% of new cars and is projected to reach 40% by the end of the year. The company also boasted a new partnership with Mercedes.
During the call, the recent Walmart+ bundle deal was discussed, highlighting strategic partnerships that contribute to SiriusXM’s growth. Tom Barry, the incoming CFO, shared that his primary focus is on driving growth, emphasizing the importance of cautious and disciplined decision-making, considering that the majority of free cash flow is expected to come in the second half of the year.
