SiriusXM Q3 Revenue Slips, but Subscriber Gains Give Green Flag

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SiriusXM held its first earnings call as a fully independent public company following its recent transaction with Liberty Media, and even as third-quarter revenue sank year-over-year, the satellite broadcaster’s aggressive subscriber push may be turning a corner.

“We are excited to reintroduce our business to the market, showcasing the actions we are taking,” CEO Jennifer Witz said, “Driving toward our long-term targets of 50 million subscribers.” Among those plans is the company’s new free, ad-supported in-car offering – directly competing with AM/FM. Witz praised the new plan alongside a premium interactive bundle, accessible in-car and via the app.

As for financial highlights, the company reported revenue of $2.17 billion for the third quarter, a 4% decrease compared to the same period last year. This was primarily due to a 5% drop in subscriber revenue to $1.65 billion and a 2% decline in advertising revenue to $450 million. However, SiriusXM added 14,000 self-pay net subscribers during the quarter, a significant improvement of 110,000 total compared to the same quarter last year.

To pick up those subscribers, SiriusXM has been making changes, including a new in-car pricing model starting at $9.99, offering access to all music channels with the option to add sports, talk, and news at additional cost.

Witz also flexed SiriusXM’s exclusive $125m agreement with Alex Cooper’s Unwell podcast network, including the flagship show Call Her Daddy. This partnership is expected to bolster advertising offerings and attract younger demographics like millennials and Gen Z.

Looking to the future, CFO Tom Barry says the company is on track to achieve its $200 million cost savings target for the full year 2024, but is lowering its total revenue guidance by $75 million to approximately $8.675 billion, citing softer advertising revenue due to increased competition and market shifts.

“We are spearheading rapid initiatives each quarter to capture demand and retain our base,” Witz concluded. “With subscriber growth for the quarter, consumer excitement around our exclusive programming, and new features and pricing now in the market, we are optimistic about the opportunity ahead.”

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