Even after a short squeeze scare last week ahead of Tuesday’s earnings release, SiriusXM narrowly outperformed market revenue predictions for Q2 2023. The satellite broadcaster reported quarterly revenue of $2.25 billion, surpassing the estimated $2.24 billion. Despite the revenue win, which held flat year-over-year for the quarter, Sirius faced higher operating costs as well, finishing the quarter with a net income of $310 million.
Additionally, the company’s adjusted profit of 8 cents per share beat analysts’ average estimate of 7 cents per share. This still marked a significant improvement from SXM’s Q1. The revenue uptick is attributed to strategic partnerships with automotive manufacturers, attracting customers to its audio services.
SiriusXM’s main growth came from the automobile sector, as more cars on the road include satellite receivers. During the earnings call, CEO Jennifer Witz took the opportunity to brag about the recently expanded collaboration with Volvo on SXM’s 360L entertainment system being incorporated into the Swedish carmaker’s new EVs. The company’s audio services remain the default offering across Volvo’s vehicle range.
The company did see a loss in paying subscribers, down 132,000 year-over-year, but significantly better than the decline of 347,000 in the first quarter.
When it comes to the future of Sirius, Witz stated, “Our focus remains on reinforcing SiriusXM’s distinct and leading position in the audio entertainment industry with new curated live content and by enhancing control and discovery across our platforms. We made significant advancements this quarter in building our next generation platform and are excited to announce a preview event to come this fall.”
Chief Financial Officer Thomas Barry added, “Our solid second quarter performance and greater visibility into full-year cash taxes and working capital leads us to increase our 2023 free cash flow outlook to $1.15 billion. We also expect to continue to see improving financial and operating performance in the second half of the year. Our team continues to focus on cost levers and operational efficiencies while reinvesting savings in enhanced technology, including our consumer app set to launch in the fall and an all-new commerce and identity platform.”
