SiriusXM Holdings Inc., the New York-based satellite radio and audio entertainment company, announced its fourth-quarter fiscal results for 2025, unveiling a complex financial picture marked by a continued reduction in its self-pay subscriber base alongside nuanced revenue and earnings movements.
During the quarter, SiriusXM's subscriber-generated revenue stood at $1.626 billion, reflecting a slight decrease from $1.633 billion reported in the same period the previous year. Total quarterly revenue held firm at $2.19 billion, maintaining parity year over year and surpassing analysts' consensus forecasts of $2.17 billion.
On the earnings front, the company reported GAAP earnings per share (EPS) of 24 cents, which fell short of the analyst consensus estimate of 78 cents. However, the adjusted EPS – a key metric that excludes certain non-recurring items – achieved 80 cents, marginally exceeding the anticipated 78 cents.
Advertising revenue contributed positively, rising to $491 million from $477 million year over year, suggesting strength in SiriusXM's ad-supported business segments. Nonetheless, the overall audience metrics revealed some declines, primarily in the subscriber customer base and engagement statistics.
Self-pay subscribers, a critical gauge of the company’s core revenue stream, declined by 301,000 over the full year, reaching a total of 31.35 million subscribers at the end of the fiscal period compared to 31.65 million a year earlier. Monthly churn rates for self-pay customers exhibited minor improvement, standing at 1.4% for the quarter, down slightly from 1.5% in the prior year period.
Segment-specific performance revealed a decrease in SiriusXM's segment revenue by 1% year over year to $1.61 billion for the quarter, primarily attributable to the contraction in self-pay subscribers. This impact was somewhat mitigated by an increase in average revenue per user (ARPU), which rose modestly to $15.17 from $15.11 year over year.
Despite revenue resilience, the SiriusXM segment experienced a 100-basis-point decline in gross margin to 59%, correlated with a 1% fall in gross profit compared to the previous year.
Within the Pandora segment, advertising revenues grew 4% year over year, reaching $450 million during the quarter. However, Pandora's monthly active users (MAUs) decreased to 41.11 million from 43.34 million year over year. Correspondingly, total ad-supported listener hours also dipped to 2.33 billion from 2.39 billion in the previous year’s quarter.
The Pandora segment demonstrated operational improvements, with gross margin expanding by 200 basis points to 36%, driven by an 8% increase in gross profit year over year.
Adjusted EBITDA edged up slightly to $691 million, compared to $688 million in the prior-year quarter, indicating stable operational earnings. Conversely, net income declined significantly to $99 million from $287 million a year ago, reflecting potential one-time costs or other accounting impacts not detailed in the report.
SiriusXM's cash flow generation remained healthy, producing $541 million in free cash flow during the quarter, compared to $516 million in the same period last year. As of December 31, the company held $94 million in cash and cash equivalents.
The company returned capital to shareholders by distributing $91 million in dividends and repurchasing $46 million in shares, cumulatively returning $137 million during the quarter.
In its financial guidance, SiriusXM adjusted its expectations for the upcoming fiscal year. Revenue forecasts were lowered slightly to $8.5 billion from the prior outlook of $8.525 billion, falling short of the analyst consensus estimate of $8.548 billion. The company also trimmed its adjusted EBITDA guidance to $2.6 billion from $2.625 billion, alongside a significant reduction in projected free cash flow to $1.35 billion from a previous guidance of $2.625 billion.
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