NEW YORK - SiriusXM Holdings Inc. (NASDAQ:SIRI) shares dropped 2.5% after the satellite radio company provided a lower-than-expected revenue outlook for 2025, overshadowing its reaffirmed 2024 guidance and long-term free cash flow targets.
SiriusXM forecasts 2025 total revenue of $8.5 billion, falling short of analyst estimates of $8.71 billion. The company expects adjusted EBITDA of $2.6 billion and free cash flow of $1.15 billion for 2025. SiriusXM anticipates its free cash flow conversion to improve from approximately 37% in 2024 to about 44% in 2025.
The company reaffirmed its 2024 guidance, projecting revenue of about $8.675 billion, adjusted EBITDA of approximately $2.7 billion, and free cash flow of around $1 billion. Looking further ahead, SiriusXM aims to achieve $1.5 billion in free cash flow by 2027.
"We are focused on driving operational efficiencies and enhancing our financial performance," said Jennifer Witz, CEO of SiriusXM. "Our strategic initiatives are expected to yield $200 million in annualized savings by the end of 2025."
In a leadership change, SiriusXM announced that Wayne Thorsen, former Chief Business Officer of ADT, will serve as the company's new Chief Operating Officer.
The satellite radio provider's stock decline reflects investor concerns about the company's growth trajectory, despite its efforts to improve profitability and cash flow generation in the coming years.
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