Q4 2023 Earnings Summary
Reported on Feb 1, 2024 (Before Market Open)
Pre-Earnings Price$50.90Last close (Jan 31, 2024)
Post-Earnings Price$52.40Open (Feb 1, 2024)
Price Change
$1.50(+2.95%)
- Sirius XM is achieving significant cost savings, having realized approximately $140 million of cost optimizations in 2023 and targeting an additional $200 million in savings in 2024. These savings are spread throughout the business, including marketing, programming, and customer service, which will improve profitability and free cash flow.
- Strengthening position in podcasting: Sirius XM has secured a major deal with SmartList Media, including popular podcasters Will Arnett, Jason Bateman, and Sean Hayes. This enhances their content offerings, brings exclusive benefits to subscribers, and strengthens their advertising business by representing major podcast content in the industry.
- Leading position in podcasting industry: Sirius XM now has 3 or 4 of the top 10 podcasts, averaging about 175 million monthly downloads. This strong portfolio positions them well to capitalize on the growing podcasting industry and attract new talent and listeners, thereby driving growth in both subscription and advertising revenues.
- Lower 2024 Revenue and Adjusted EBITDA Guidance Due to Flat Subscriber Growth and Softer ARPU: Sirius XM projects 2024 revenue of approximately $8.75 billion, down from $8.95 billion in 2023, and adjusted EBITDA of approximately $2.7 billion, compared to $2.79 billion in 2023. This decline is influenced by "roughly level subscriber numbers and a modestly softer ARPU," partly due to a more diverse subscriber base with more streaming-only subscriptions.
- Shift to Lower-Priced Streaming Subscriptions May Pressure ARPU and Cannibalize In-Car Subscribers: The introduction of a $9.99 streaming-only plan aims to attract younger audiences but raises concerns about potential cannibalization of higher-priced in-car subscriptions, leading to lower ARPU. Management acknowledges the need to "look and watch for cannibalization," though they believe it's not a concern today. ,
- Reliance on Significant Cost-Saving Initiatives May Reflect Operational Challenges and Could Impact Service Quality: Sirius XM achieved approximately $140 million in cost savings in 2023 and is targeting nearly $200 million in additional cost savings in 2024 by optimizing resources in marketing, programming, and customer service. This aggressive cost-cutting may indicate pressure to maintain margins amid revenue challenges and could potentially affect service quality. ,
Research analysts covering SIRIUS XM HOLDINGS.