Pandora Sees Slight Ad Revenue Growth as Sirius XM Prepares for Future Expansion

Sirius XM Holdings Inc (NASDAQ: SIRI) reported a flat fourth-quarter FY23 revenue growth year-on-year to $2.287 billion, marginally missing the consensus of $2.290 billion. Adjusted EPS of $0.09 beat the consensus of $0.08. 

Subscriber revenue growth remained flattish Y/Y at $1.72 billion in the quarter. Advertising revenue remained steady Y/Y at $479 million.

For the year, SiriusXM self-pay subscribers decreased by 445,000 to 34 million total subscribers, a 1% decline Y/Y, and the self-pay monthly churn remained low at 1.6%. SiriusXM added approximately 131,000 new self-pay subscribers in the fourth quarter of 2023.

SiriusXM segment revenue was flattish Y/Y to $1.72 billion during the quarter as ARPU decreased slightly to $15.56. SiriusXM segment gross margin declined from 62% to 61% Y/Y for the quarter.

Pandora segment advertising revenue increased 1% Y/Y to $436 million for the quarter. 

Monthly Active Users (MAUs) at Pandora were 46.0 million, down from 47.6 million in the prior year in 2023. The total number of ad-supported listener hours was 10.48 billion in 2023, down from 10.88 billion Y/Y. 

The Pandora segment gross margin improved to 34% for the quarter from 32% a year ago.

The adjusted EBITDA declined by 4% Y/Y to $715 million.

Sirius generated $445 million in free cash flow in the fourth quarter, down from $529 million in the prior year. It held $224 million in cash and equivalents.

“In 2023, SiriusXM laid the groundwork for future growth through the successful launch of our next-generation platform and the new SiriusXM app,” said Jennifer Witz, Chief Executive Officer. 

FY24 Outlook: Sirius XM disclosed revenue outlook of $8.75 billion, versus the consensus of $9.10 billion. It also projected an adjusted EBITDA of $2.70 billion and free cash flow of $1.20 billion.

Price Action: SIRI shares traded higher by 2.56% at $5.22 premarket on the last check Thursday.

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