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SiriusXM Loses 94K Satellite Radio and 109K Pandora Subs, Eyes “Further Cost Efficiencies”

Audio entertainment giant SiriusXM, the home of Howard Stern, reported Thursday that it added 131,000 self-pay subscribers in its satellite radio unit in the fourth quarter after a 96,000 loss in the third, a 132,000 drop in the second and a 347,000 loss in the first quarter. In the year-ago period, the firm had added 162,000 such customers. But SiriusXM also lost 225,000 paid promotional subscribers in the latest period after a year-ago loss of 28,000.

That meant a total net drop of 94,000 subscribers in the latest quarter, compared with a gain of 134,000 in the fourth quarter of 2022.

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For all of 2023, SiriusXM lost 430,000 customers, driven by a drop of 445,000 among self-pay subscribers, while paid promotional users grew by 15,000. As of the end of 2023, Sirius’ self-pay subscriber base stood at more than 31.9 million, with its total users standing at nearly 33.9 million. Earlier in the year, the firm, led by CEO Jennifer Witz, had said that it expected a “modest” user drop for the full year 2023 amid economic and car industry challenges.

At its Pandora streaming business, SiriusXM lost 109,000 subscribers in the fourth quarter, compared with a year-ago loss of 52,000. Over the past year, the firm lost 207,000 users. The company ended 2023 with just above 6.0 million total self-pay customers at Pandora.

SiriusXM also recorded quarterly advertising revenue in its Pandora and Off-Platform unit of $479 million, down minimally from $480 million in the year-ago period.

SiriusXM’s total revenue for the fourth quarter amounted to $2.29 billion, while for the full year 2023 it hit $8.95 billion. Both figures were hardly changed from the year-ago period. Net income of $352 million in the fourth quarter was down 4 percent from $365 million, while the full-year $1.26 billion was up 4 percent from $1.21 billion in 2022. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), another profitability metric, fell 4 percent to $715 million in the fourth quarter and 2 percent for the full year 2023 to $2.79 billion.

For 2024, the company predicted revenue of approximately $8.75 billion, down from 2023, and adjusted EBITDA of approximately $2.70 billion, also down from last year.

“In 2023, SiriusXM laid the groundwork for future growth through the successful launch of our next-generation platform and the new SiriusXM app,” said Witz. “Our commitment to growth was
also demonstrated by strategic content investments that expanded our reach to new listeners and by staying true to our identity as a hub for curated, live and on-demand audio experiences. As we look to 2024, our guidance reflects substantial efforts and investments to enhance the value proposition of our subscription and advertising businesses, which we believe will strengthen our long-term growth profile.”

The fourth-quarter results “speak volumes about our resilient performance,” argued CFO Tom Barry. “In the year ahead, we see opportunities for further cost efficiencies and to streamline our business in new and innovative ways.” He didn’t immediately provide details.

On an earnings conference call, Witz was asked about bundling opportunities. “In terms of the true sort of hard bundle with content, I think an interesting opportunity, obviously, is going to come through when we launch Audible,” she said in reference to an upcoming partnership with the audio books provider. “We’re trying to find ways to really make it integrated in terms of having content on one another’s platforms and also a trial offer. So we’ll be able to experiment with different types of offers this year and bundles.” She added: “We’re very attractive to a number of potential partners given our very low churn.”

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