🎈 Up Big Today: Find today's biggest gainers with our free screenerTry Stock Screener

Sirius XM forecasts 2025 revenue below expectations, shares dip

Published 12/10/2024, 08:47 AM
© Reuters.
SIRI
-

Sirius XM Holdings Inc. (NASDAQ:SIRI) is set to open lower as the company's revenue projection for 2025 fell short of market expectations. The satellite radio company anticipates revenues of $8.5 billion, which is below the consensus estimate of $8.7 billion. Consequently, shares have decreased by 3.7%.

The company has outlined its strategy for the next few years, focusing on its core subscription business and advertising prowess, while also aiming to improve operational efficiency and prioritize shareholder returns. Sirius XM's CEO, Jennifer Witz, expressed confidence in the company's ability to navigate market challenges and deliver value to shareholders.

In a bid to enhance profitability and cash flow, Sirius XM is concentrating on its dominant automotive subscriber segment, which constitutes 90% of its current subscriber base. The company plans to reallocate resources from high-churn streaming audiences to more stable revenue-generating areas.

Additionally, Sirius XM is set to continue investing in its streaming services as a complement to its in-car offerings. This includes integrating its streaming solution into Tesla (NASDAQ:TSLA)'s IP-enabled operating system, expanding its reach to over two million vehicles.

Content remains a key focus for the company, with plans to invest in its unique music channels, sports coverage, audio talent, and growing podcast network. The advertising aspect of the business will also be enhanced, with investments in adtech and innovative in-car ad experiences.

Efficiency improvements are on the agenda, with Sirius XM targeting an additional $200 million in annualized savings by the end of 2025. This comes after achieving approximately $350 million in savings for 2023 and 2024.

The company's financial strategy includes maintaining a strong balance sheet and optimizing free cash flow. Sirius XM plans to reduce its debt by $700 million in 2025 and maintain its current quarterly dividend of $0.27 per share. The existing $1.166 billion stock repurchase program also remains in effect.

For 2025, Sirius XM anticipates an adjusted EBITDA of $2.6 billion and free cash flow of $1.15 billion, with a target of $1.5 billion in free cash flow by 2027. These figures follow the reaffirmation of its 2024 guidance for total revenue of approximately $8.675 billion.

In line with these strategic updates, Wayne D. Thorsen has been appointed as the new Executive Vice President and Chief Operating Officer, effective December 16. Thorsen brings a wealth of experience from his previous roles at ADT Inc., Google Inc (NASDAQ:GOOGL)., and Social Finance, Inc. Meanwhile, Joseph Inzerillo has departed from his position as Chief Product and Technology Officer.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.