SiriusXM Posts 4% Drop in Subscriber Revenue Amid Streaming App Struggles
Declines in subscriber and advertising revenue in 2024 reinforce the company's pivot away from streaming and towards a focus on core in-car listeners.
staff
SiriusXM reported revenue from subscribers fell by nearly 4%, while ad revenue held flat for the full year in 2024, as the satellite radio company’s nascent streaming app failed to jump-start its subscribers as hoped.
The company generated $8.7 billion in revenue and adjusted EBITDA of $2.73 billion last year, representing declines of 3% and 2% respectively from 2023 figures. Subscriber revenue declines were the biggest contributing factor to the ho-hum year, but it was partially offset by the company lowering costs by cutting marketing, business expenses and staff.
“At the end of 2024, we took significant steps to refocus on SiriusXM’s core strengths and enhance operational efficiency,” Sirius Chief Executive Officer Jennifer Witz said in a statement. “By prioritizing our core in-car subscription business, leveraging our streaming capabilities, and growing our leadership in ad-supported audio, we are well-positioned to deliver long-term value. Looking ahead, we are energized by the opportunities to build on this strategy and continue offering unparalleled audio experiences through our platforms.”
SiriusXM announced in December that was shifting marketing and other resources away from the streaming app it launche in Dec. 2023 to prioritize its subscribers who pay to listen to its music, sports and news radio and podcasts in vehicles.
Sirius is the dominant provider of audio entertainment subscriptions in vehicles in the U.S. but concerns over softening subscriber revenue and an eagerness to attract more younger subscribers pushed the launch of a streaming app last December.
The company met its 2024 financial targets–adjusted EBITDA of $2.73 billion and a margin of 31%–but its executives were peppered by questions about disappointing advertising revenue and internal guidance that 2025 will see sharper declines in adjusted EBITDA than they saw in 2024.
The company has a complicated business model, part of which hinges on customers choosing to start paying for their service after first trying a free trial subscription. Witz told analysts on their earnings call they expect to stabilize conversion rates this year for certain product lines like its 360L, a new premium in-vehicle audio platform with more channels. That said, she advised the number of net new subscribers in 2025 is again expected to decline.
The company said it is expecting $8.5 billion in total revenue in 2025, with $1.15 billion in free cash flow and $2.6 billion in adjusted EBITDA.
Here are the main take-aways from SiriusXM’s fourth quarter and annual earnings report:
- The SiriusXM segment of the overall company–which doesn’t include Pandora–reported 2024 revenue of $6.6 billion, down 4% from 2023. The decline was driven by lower susbcriber, equipment and other revenue and a smaller average base of self-pay subscribers.
- Average revenue per user in 2024 of $15.21 fell 35 cents from the prior year because of declining ad revenue, lower rates the company gets paid from automakers to offer promotional plans in their cars, and more people subscribing only for the streaming app, which has a lower price than the in-car subscription.
- SiriusXM self-pay subscribers fell by 296,000 in 2024. The company had 33 million total subscribers as of Dec. 31, 2024.
- SiriusXM gross profit totaled $3.9 billion in 2024, 6% lower than 2023, but with a gross margin of 60%, roughly flat from 2023.
- Pandora and Off-platform self-pay subscribers decreased by 101,000 in the fourth quarter to end the year at 5.8 million in total.
- Pandora and off-platform revenue totaled $2.15 billion in 2024, up 2% from 2023, helped by increased revenues from subscribers, advertising, podcasting and programmatic sales.
