Wednesday, March 12, 2025

SiriusXM Radio Facing Financial Headwinds


Recent financial updates and market reactions suggest SiriusXM is facing significant challenges that have impacted its revenue and stock performance, which might be interpreted as a collapse in certain contexts.

SiriusXM has been navigating a tough period marked by declining subscriber numbers and revenue pressures. For the full year of 2024, the company reported total revenue of approximately $8.7 billion, a 3% decrease from $8.96 billion in 2023. This decline was driven largely by a 4% drop in subscriber revenue within its core SiriusXM segment, which fell to $6.6 billion from $6.88 billion the previous year. The company lost 296,000 self-pay subscribers in 2024, though this was an improvement over the 445,000 lost in 2023, thanks to some recovery in the fourth quarter. 

Meanwhile, its Pandora and off-platform segment saw a modest 2% revenue increase to $2.15 billion, buoyed by growth in podcasting and advertising, but this wasn’t enough to offset the broader downturn.

Jennifer Witz
For 2025, SiriusXM has projected further revenue erosion, forecasting $8.5 billion—a drop of about 2% from 2024’s $8.675 billion guidance. This downward revision, announced in December 2024, disappointed Wall Street, leading to a sharp stock decline. Shares of Sirius XM Holdings Inc. fell as much as 9.8% on December 10, 2024, after the company issued this outlook, which fell short of analyst expectations. By the end of 2024, the stock had already slid 53% year-to-date, underperforming the S&P 500’s 28% gain. This stock drop reflects investor concerns over stagnant growth and "marketplace headwinds," as noted by CEO Jennifer Witz.

Several factors contribute to these challenges. The company’s core in-car subscription business, which accounts for 90% of its subscribers, has been hit by a softening automotive market. Fewer new and used car sales mean fewer trial subscriptions, a key funnel for converting listeners to paying customers.

 Additionally, SiriusXM’s 2023 streaming app launch, intended to attract younger users and compete with Spotify, failed to deliver the hoped-for growth. By late 2024, the company pivoted away from this strategy, refocusing on its in-car base and cutting marketing for the "high-cost, high-churn" streaming audience. Advertising revenue also remained flat in 2024, adding to the pressure, and posts on X from early March 2025 suggest ongoing softness in ad sales may have further spooked investors.

In response, SiriusXM has implemented aggressive cost-cutting. It delivered $350 million in savings across 2023 and 2024 and plans to slash an additional $200 million in annualized costs by the end of 2025.

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