Sirius XM Stock Drops After Flat Q2 Revenue, Self-pay Subs at 34M

Sirius XM Holdings Inc SIRI reported a flat second-quarter FY23 revenue growth year-on-year to $2.250 billion, in-line the consensus of $2.253 billion.

Subscriber revenue growth remained flattish Y/Y at $1.73 billion. Advertising revenue decreased by 1.5% Y/Y to $445 million.

SiriusXM self-pay subscribers decreased by 132,000, reaching 34 million total subscribers. Self-pay monthly churn remained at 1.5%.

SiriusXM segment revenue was flattish Y/Y to $1.7 billion as ARPU decreased by 0.3% to $15.66. The gross margin was flat at 61%.

Pandora segment advertising revenue decreased 1% Y/Y to $400 million. 

Monthly Active Users (MAUs) at Pandora were 47.4 million, down from 50.5 million in the prior year period. Total ad-supported listener hours were 2.73 billion, down from 2.84 billion year-over-year.

The gross margin contracted by 200 bps to 29% on higher music royalties.

Adjusted EPS of $0.08 was in line with the consensus. Sirius generated $323 million in free cash flow and held $51 million in cash and equivalents.

CEO Jennifer Witz said, "Our focus remains on reinforcing SiriusXM's distinct and leading position in the audio entertainment industry with new curated live content and by enhancing control and discovery across our platforms. We made significant advancements this quarter in building our next-generation platform and are excited to announce a preview event to come this fall." 

FY23 Outlook: Sirius XM reiterated revenue of $9.0 billion (consensus $8.99 billion). It expects adjusted EBITDA of $2.75 billion.

Price Action: SIRI shares traded higher by 2.17% at $4.99 on the last check Tuesday.