SiriusXM Grows Subs in Fourth Quarter, Faces “Challenging” Economy and “Material Investments”

Audio entertainment giant SiriusXM, the home of Howard Stern, reported on Thursday that it added 162,000 self-pay subscribers in its satellite radio unit in the fourth quarter, but expects a “modest” drop this year amid economic and car industry challenges.

SiriusXM also said its paid promotional subscribers decreased by 28,000 in the final quarter of 2022. In the year-ago period, it had added 55,000 self-pay customers and lost 286,000 paid promotional users.

The total gain of 134,000 subscribers in the latest period compared with a loss of 231,000 in the year-ago period. As of the end of 2022, Sirius’ self-pay subscriber base stood at 32.4 million, with its total users reaching 34.3 million.

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At its Pandora streaming business, the company lost 52,000 net self-pay subscribers in the final quarter of 2022, compared with a year-ago loss of 128,000. The company ended December with around 6.2 million total self-pay customers at Pandora.

The company’s quarterly advertising revenue dropped from $495 million in the year-ago period to $480 million. Monthly active users (MAUs) at Pandora of 47.6 million were down from 52.3 million in the prior-year period. Total ad-supported listener hours hit 10.9 billion, down from 11.5 billion, but average monthly listening hours per ad-supported user rose 4 percent to 20.6.

SiriusXM has been investing in and focusing on evolving the listening experience both in and outside the car and is planning to relaunch its app later in 2023.

“2022 was a strong year for SiriusXM, as we continued to focus on bringing consumers the best in audio
entertainment both in-car and on the go, reaching record high revenue and record low churn,” said CEO Jennifer Witz. “Our strong operating and financial performance in 2022 are a testament to our resilient
business model and growing contribution from streaming, which helped us deliver 348,000 net new self-pay subscribers. In 2023, we expect SiriusXM to deliver strong operating performance and generate significant cash, even as we face a challenging economic environment and continue to make material investments in our technology infrastructure.”

CFO Sean Sullivan warned: “While we are not issuing subscriber guidance today, we anticipate modestly negative self-pay net adds for the year as economic and demand uncertainty persists, auto sales remain soft, and we reduce marketing ahead of our planned launch of a new streaming experience later this year.”

But he also noted: “SiriusXM met all of its financial guidance in 2022 – a notable accomplishment in a tough year.”

In pre-market trading, SiriusXM shares were down 1.9 percent.