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SIRIUS XM HOLDINGS INC. (SIRI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue was $2.14B, down 2% y/y, with Net Income of $205M and diluted EPS of $0.57; Adjusted EBITDA was $668M with a 31% margin, and Free Cash Flow rose 27% y/y to $402M .
  • Revenue modestly beat S&P Global consensus ($2.14B actual vs $2.13B estimate), and S&P Primary EPS (normalized) indicated a beat; GAAP diluted EPS was lower due to legal settlements and restructuring/impairment charges. Management reaffirmed FY25 guidance ($8.5B revenue, $2.6B adj. EBITDA, $1.15B FCF) . Values retrieved from S&P Global.*
  • Positive catalysts: improving subscriber trend (self-pay net adds -68k, +32k y/y), podcast revenue up ~50%, and disciplined cost program with ~$200M gross savings expected in-period this year; continued $0.27 quarterly dividend and $45M buybacks signal capital-return commitment .
  • Key watchouts: Pandora margin compression (29%), advertising RPM down and macro/CTV inventory pressure, higher SAC and G&A from a $28M legal settlement, plus a non-cash ~$100M software write-off to streamline the roadmap .

What Went Well and What Went Wrong

What Went Well

  • Subscriber trends improved: self-pay net adds were -68k, an improvement of 32k y/y; churn remained low at 1.5% as acquisition programs (three-year OEM subscriptions, used-car data, EV expansion) gained traction .
  • Podcast momentum: revenue up nearly 50% y/y, supported by video/social monetization and new creator deals (e.g., Trevor Noah; SmartLess Live with John Mayer), broadening off-platform reach .
  • Strong cash generation and cost discipline: Free Cash Flow of $402M (+27% y/y); sales & marketing and product & technology down ~20% y/y; management expects ~$200M gross savings in OpEx/CapEx in-period this year .
    • “Our renewed strategic focus continued to deliver this quarter... unlocking significant cost efficiencies.” — CEO Jennifer Witz .
    • “We maintained a healthy EBITDA margin, generated strong free cash flow... returned $137M to shareholders.” — CFO Tom Barry .

What Went Wrong

  • Revenue and net income declines: total revenue -2% y/y to $2.138B; net income down to $205M vs $354M in Q2 2024; Adjusted EBITDA down 5% y/y to $668M .
  • Pandora margin compression and RPM pressure: Pandora gross margin fell to 29% (33% prior year); RPM dropped to $85.97 from $98.99 amid competitive pricing and CTV inventory flood; broader ad demand softness in streaming music .
  • Rising SAC and G&A: SAC rose 16% y/y to $107M (SAC/installation $18.04); G&A up 23% on higher legal expenses (legal settlement ~$28M) and lack of prior-year insurance recovery; non-cash write-off of ~$100M capitalized software to streamline strategy .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$2.178 $2.068 $2.138
Net Income ($USD Millions)$354 $204 $205
Diluted EPS ($)$0.74 $0.59 $0.57
Adjusted EBITDA ($USD Millions)$702 $629 $668
Free Cash Flow ($USD Millions)$317 $56 $402

Segment Breakdown

Segment MetricQ2 2024Q1 2025Q2 2025
SiriusXM Revenue ($USD Billions)$1.640 $1.581 $1.614
SiriusXM Gross Profit ($USD Millions)$986 $937 $966
SiriusXM Gross Margin (%)60% 59% 60%
Pandora & Off-Platform Revenue ($USD Millions)$538 $487 $524
Pandora & Off-Platform Gross Profit ($USD Millions)$180 $139 $154
Pandora & Off-Platform Gross Margin (%)33% 29% 29%

KPIs

KPIQ2 2024Q1 2025Q2 2025
Self-Pay Net Adds (SiriusXM, ‘000)(100) (303) (68)
Self-Pay Monthly Churn (%)1.5% 1.6% 1.5%
ARPU ($)$15.24 $14.86 $15.22
SAC per Installation ($)$13.85 $18.86 $18.04
SiriusXM Ending Subscribers (‘000)33,257 32,864 32,797
Trial Funnel (Millions)7.4 7.4 7.6
Pandora MAUs (‘000)45,129 42,357 42,684
Pandora Self-Pay Subs (‘000)5,951 5,705 5,706
Advertising RPM ($ per 1k hrs)$98.99 $87.23 $85.97

Results vs Estimates (S&P Global)

MetricQ2 2024Q1 2025Q2 2025
Revenue Consensus ($)2,194,872,280*2,080,024,030*2,127,648,980*
Actual Revenue ($)2,178,000,000 2,068,000,000 2,138,000,000
Primary EPS Consensus (S&P)0.7648*0.66116*0.76426*
Primary EPS Actual (S&P)0.80*0.67339*0.86787*
GAAP Diluted EPS0.74 0.59 0.57

Values retrieved from S&P Global.*

Notes: S&P “Primary EPS” reflects normalized EPS; GAAP diluted EPS includes legal settlements and restructuring/impairment costs .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025~$8.5B ~$8.5B Maintained
Adjusted EBITDAFY 2025~$2.6B ~$2.6B Maintained
Free Cash FlowFY 2025~$1.15B ~$1.15B Maintained
Dividend per ShareQuarterly$0.27 (declared July 23) $0.27 (payable Aug 27) Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Cost Savings & CapExFY24 adj. EBITDA margin ~31%; set up for ~$200M run-rate savings exiting 2025 Emphasis on $200M run-rate savings; early cost reductions across S&M, product/tech ~$200M gross savings in-period this year; non-satellite CapEx toward low end; next year ~$400M non-satellite CapEx Improving
Advertising Macro/RPMPandora margin improved in FY24 but RPM pressures noted Podcast revenue +33% y/y; programmatic resilience late in quarter RPM down; CTV inventory flood pressures; podcast revenue up ~50%; Innovid MMM integration Mixed
Subscriber Trends/ChurnQ4 self-pay churn 1.5%; net adds +149k Self-pay churn 1.6%; -303k net adds; OEM bundles, used-car data support Self-pay churn 1.5%; -68k net adds; improved acquisition programs; trial funnel 7.6M Improving
Pricing & PackagingAll-in pricing and content adds; ESPN+ bundle March rate increase; ad-supported tier testing planned Rolling out ad-supported “Play”; entry price under $7; most customers choosing $25 package; ARPU trending better in H2 Expanding
AI/TechnologySXM-9 satellite launch; innovation center in Ireland AI (Sierra) in customer service; ad tech investments AI voice replicas via Narrativ; search/semantic improvements; lower costs; 360L ad replacement end-2025 Building
Tariffs/Auto MacroMonitoring; limited direct exposure No material tariff impact expected in 2025; used-car offset Seasonality shift; auto market uncertainty but robust retention; 360L penetration ~50% of new cars Stable
Capital Returns & LeverageReinitiated buybacks; dividend; ND/EBITDA ~3.7x Dividend and buybacks; ND/EBITDA ~3.8x $92M dividends + $45M buybacks; ND/EBITDA ~3.8x; delevering priority Continuing

Management Commentary

  • “We achieved meaningful year-over-year subscriber improvements... accelerated momentum in podcasting... unlocked significant cost efficiencies.” — Jennifer Witz, CEO .
  • “We maintained a healthy EBITDA margin, generated strong free cash flow... returned $137 million to shareholders... on track to meet our full-year guidance.” — Tom Barry, CFO .
  • “We expect to achieve approximately $200 million of gross savings in period this year... and non-satellite CapEx near the low end of $450–$500 million.” — Tom Barry .
  • “Play presents a logical solution for price-sensitive customers... expect Play to be available in almost 100 million vehicles by year-end.” — Jennifer Witz .

Q&A Highlights

  • Free cash flow and guidance: management signaled potential upside to FY25 FCF from tax legislation benefits and lower CapEx; formal update expected in fall .
  • Legal expenses and G&A: ~$28M legal settlement skewed G&A higher; prior-year insurance recovery of ~$10M benefited comps .
  • Podcast strategy and AdTech: podcast revenue up ~50% y/y; expanding programmatic, Innovid MMM integration to better measure ROI and extend audio’s value .
  • Pricing & ARPU: March rate increase well-absorbed due to added content; modular in-car pricing, most customers choosing $25 package; ARPU to trend better in H2 .
  • “Play” roll-out and conversion: ad-supported plan targeted to cohorts with lower conversion; reach to ~100M vehicles by year-end, contribution more visible in 2026 .

Estimates Context

  • Q2 2025 Revenue: $2.138B actual vs $2.128B consensus — modest beat; Q1 2025 revenue was modest miss; Q2 2024 slight miss. Values retrieved from S&P Global.*
  • EPS (S&P Primary/normalized) showed beats/mixed outcomes across periods; GAAP diluted EPS for Q2 2025 was $0.57 reflecting legal settlements ($28M) and restructuring/impairment ($107M) that reduce GAAP results vs normalized figures . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Execution on cost savings is ahead of plan, with ~$200M gross savings in-period and non-satellite CapEx trending lower; supports margin stability and potential FCF upside into fall update .
  • Subscriber trends are improving with low churn, enhanced acquisition programs, and a growing trial funnel; ARPU likely benefits from March pricing as the year progresses .
  • Advertising headwinds persist in streaming music (RPM down), but podcast monetization is a bright spot, aided by video/social expansion and AdTech measurement (Innovid) .
  • The ad-supported “Play” tier should expand addressable market without materially diluting ARPU, with broader reach (~100M vehicles) by year-end; meaningful financial impact expected more in 2026 .
  • Balance sheet and capital returns remain disciplined: dividend ($0.27), opportunistic buybacks ($45M), and leverage ~3.8x ND/EBITDA, with deleveraging prioritized .
  • Watch for advertising market trajectory and CTV competitive dynamics; monitor segment margins, especially Pandora, and RPM trends .
  • Near-term trading: modest beat on revenue and reaffirmed guidance, plus strong FCF print, are supportive; medium-term thesis hinges on cost program delivery, pricing/ARPU momentum, and podcast/AdTech execution .
* Values retrieved from S&P Global.