Key Points
Sirius XM (NASDAQ: SIRI) has faced recent challenges, with revenue declining from $9.0 billion in 2022 to $8.7 billion in 2024, primarily due to reduced subscriber revenue. Additionally, adjusted EBITDA contracted from $2.8 billion to $2.7 billion during the same period. This decline raises concerns about whether the issue is structural or cyclical, especially as younger audiences shift towards platforms like Spotify and YouTube Music.
Despite the decline in growth, Sirius XM reported $1.0 billion in free cash flow on $8.7 billion in revenue for 2024, maintaining a margin of about 11%. The company has made significant cost-cutting efforts, achieving $350 million in savings in 2023 and 2024, with plans for an additional $200 million in 2025. Sirius XM has also repurchased approximately $0.9 billion in shares between 2022 and 2024, signaling financial flexibility despite the current stagnation.
Investors should note that while Sirius XM isn’t positioned to be a growth leader like Spotify or Netflix, its ability to generate reliable cash flow and its disciplined capital return strategy make it appealing for value-focused investors. However, long-term growth concerns remain as listener behavior evolves.
