Q3 2023 Earnings Summary
Reported on Jan 7, 2025 (Before Market Open)
Pre-Earnings Price$41.80Last close (Oct 30, 2023)
Post-Earnings Price$42.60Open (Oct 31, 2023)
Price Change
$0.80(+1.91%)
- Launch of next-generation streaming apps and platform: SiriusXM is set to launch new streaming apps later this year, which will address key pain points in discovery, control, and pricing to attract younger users and improve conversion rates. This initiative aims to tap into the approximately 25% of the adult audio listening market that seeks premium audio experiences.
- Record-high EBITDA of $747 million in Q3 2023: The company achieved a record-high EBITDA of $747 million in the third quarter, highlighting strong profitability and the effectiveness of cost optimization efforts. This includes $40 million in net optimization savings during the quarter, with expectations for more savings in the future.
- Increasing penetration of the 360L platform and strong free cash flow outlook: The 360L platform is now in about 35% of current vehicle sales and is expected to grow over time, enhancing the in-car user experience and driving subscriber growth. Additionally, with satellite CapEx expected to trend towards zero by 2028, SiriusXM anticipates a strong free cash flow profile going forward.
- SiriusXM is facing challenges in attracting younger users, with concerns about whether the new streaming app launch will effectively address this issue. The company acknowledges the need to improve content discovery and control to appeal to younger audiences.
- There is uncertainty about sustaining subscriber growth, particularly whether conversions to self-pay subscribers will offset increasing vehicle-related churn. The company admits that improved conversion rates may not immediately reverse this trend.
- Advertising revenue remains unpredictable, with the expected recovery not materializing as anticipated. The company notes uncertainty in meeting revenue targets, especially since the fourth quarter is traditionally their largest for ad revenue.