Sirius Q2 Earnings: What Are We Watching?

Sirius XM (NASDAQ: SIRI), a leading provider of satellite radio, is scheduled to announce its fiscal second-quarter results on Tuesday, August 1. We expect Sirius XM stock to likely see little movement with revenue beating market expectations and earnings coming in line. It should be noted that the media company benefits from a historically meager churn rate, with an implied average life for new car purchases of around five years – thanks to its solid business model. By taking advantage of the advertising reach it receives through radio, Sirius XM could likely push Pandora into podcasting for further growth opportunities in the coming quarters. It should be noted that the company’s self-pay subscribers of the Pandora Plus and Pandora Premium services fell by 2% year-over-year (y-o-y) to end Q1 at 6.2 million, while SiriusXM self-pay subscribers remained flat at 32 million. In comparison, the company had 30 million self-pay subscribers at the start of 2020. A reduced marketing spend, particularly around streaming, contributed to the negative subscriber growth in Q1 2023. High car prices and lofty gas prices also weighed on Q1 results.

For the full-year 2023, the company expects total revenue of approximately $9.0 billion, adjusted EBITDA of approximately $2.75 billion, and free cash flow of approximately $1.1 billion in FY 2023 (compared to $1.55 billion in 2022).