Sirius XM Holdings Inc (NASDAQ: SIRI) experienced a slight dip in revenue during the fiscal third quarter of 2024, reporting a 4% year-over-year decline to $2.17 billion. While this missed analyst consensus expectations of $2.19 billion, the company’s adjusted earnings per share (EPS) of $1.17 surpassed estimates at $0.78.
Despite the revenue decline, Sirius XM’s subscriber base remained relatively stable. Subscriber revenue reached $1.65 billion in the quarter, a decrease from $1.73 billion in the same period last year. This was attributed to a decrease in self-pay subscribers, which fell by 314,000 to 31.5 million total subscribers, representing a 1% decline year-over-year. However, it’s important to note that the self-pay monthly churn rate remained steady at 1.6% for the quarter, and Sirius XM saw an increase of 110,000 self-pay subscribers during the period.
The Sirius XM segment revenue also experienced a decline of 5% year over year to $1.63 billion. This was primarily driven by the lower average base of self-pay subscribers and a decrease in average revenue per user (ARPU) by $0.53 compared to the previous year. ARPU dropped to $15.16 from $15.69. Additionally, the Sirius XM segment gross margin decreased by 100 basis points to 60% year-over-year.
On the advertising front, the Pandora segment saw a 2% year-over-year decrease in advertising revenue, reaching $409 million for the quarter. Pandora’s Monthly Active Users (MAUs) fell to 43.72 million, down from 46.50 million in 2023. Total ad-supported listener hours were 2.47 billion in the quarter, a decline from 2.64 billion year-over-year. Despite this, the Pandora segment gross margin improved to 34% for the quarter, up from 33% a year ago, while the gross profit saw a 4% year-over-year increase.
Adjusted EBITDA for the quarter declined by 7% year over year to $693 million, primarily due to lower subscriber revenue. Notably, the company reported a net loss of $2.96 billion, largely attributed to an impairment charge of $3.36 billion associated with the Liberty Media transaction.
In September, Liberty Media Corp (FWONA, FWONK) and Sirius XM Holdings announced the completion of their split-off of Liberty Sirius XM Holdings. Shortly after, a subsidiary of New Sirius merged with Sirius XM Inc (formerly Sirius XM Holdings, ‘Old Sirius’), with Old Sirius continuing as a wholly owned subsidiary of New Sirius. These transactions led to New Sirius becoming an independent public company, fully separated from Liberty Media and renamed Sirius XM Holdings Inc.
The company generated $93 million in free cash flow during the quarter, down from $258 million in the prior year due to transaction-related expenses. As of September 30, 2024, Sirius XM held $127 million in cash and equivalents.
For the full fiscal year 2024, Sirius XM anticipates revenue of $8.675 billion, slightly lower than its previous estimate of $8.75 billion and below analyst consensus of $8.75 billion. However, the company maintained its adjusted EBITDA target of $2.70 billion and expects a free cash flow of $1.00 billion, down from its previous forecast of $1.20 billion.
Sirius XM stock has experienced a significant decline of 51% year-to-date. At the last check on Thursday, SIRI stock was down 0.93% at $27.14.
