Sirius XM(US:SIRI)2025-07-31 14:24Part I - Financial Information This section presents the unaudited financial statements, management's analysis, market risks, and internal controls Item 1. Financial Statements (unaudited) This section presents the unaudited consolidated financial statements, including statements of operations, balance sheets, cash flows, and comprehensive notes, for the periods ended June 30, 2025 and 2024 Consolidated Statements of Operations Total revenue and net income attributable to Sirius XM Holdings Inc. declined for both the three and six months ended June 30, 2025, compared to the prior year Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $2,138 | $2,178 | $4,206 | $4,340 | | Income from operations | $365 | $471 | $752 | $880 | | Net income | $205 | $354 | $409 | $595 | | Net income attributable to Sirius XM | $205 | $304 | $409 | $503 | | Diluted EPS | $0.57 | $0.74 | $1.16 | $1.37 | Consolidated Balance Sheets As of June 30, 2025, total assets slightly decreased, while total liabilities declined and total stockholders' equity increased compared to December 31, 2024 Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,045 | $1,149 | | Total assets | $27,326 | $27,521 | | Total current liabilities | $2,570 | $2,731 | | Long-term debt | $10,136 | $10,314 | | Total liabilities | $15,997 | $16,447 | | Total stockholders' equity | $11,329 | $11,074 | Consolidated Statements of Cash Flows Net cash provided by operating activities increased, while net cash used in investing activities decreased, and net cash used in financing activities rose for the six months ended June 30, 2025 Consolidated Cash Flow Highlights (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $788 | $753 | | Net cash used in investing activities | $(397) | $(550) | | Net cash used in financing activities | $(461) | $(314) | | Net decrease in cash, cash equivalents and restricted cash | $(70) | $(111) | Notes to the Consolidated Financial Statements This section details accounting policies, business structure, segment reporting, debt, equity, commitments, and legal proceedings, providing context for the financial statements - The company operates two reportable segments: 'SiriusXM' (satellite radio and connected vehicle services) and 'Pandora and Off-platform' (streaming music, comedy, and podcasts) 4547 - As of June 30, 2025, the SiriusXM business had approximately 32.8 million subscribers, while Pandora had 5.7 million subscribers 50 - The company is the product of a series of transactions with its former parent, Liberty Media, which closed on September 9, 2024 3334 - This involved a split-off and a merger, resulting in the current public company structure 35 Debt Summary as of June 30, 2025 (in millions) | Debt Instrument | Principal Amount | Carrying Value | | :--- | :--- | :--- | | 3.75% Convertible Senior Notes due 2028 | $575 | $596 | | Incremental Term Loan | $900 | $900 | | 3.125% Senior Notes due 2026 | $1,000 | $997 | | 5.00% Senior Notes due 2027 | $1,500 | $1,496 | | 4.00% Senior Notes due 2028 | $2,000 | $1,990 | | 5.500% Senior Notes due 2029 | $1,250 | $1,243 | | 4.125% Senior Notes due 2030 | $1,500 | $1,491 | | 3.875% Senior Notes due 2031 | $1,500 | $1,489 | | Total Long-Term Debt | | $10,136 | Contractual Cash Commitments as of June 30, 2025 (in millions) | Commitment Type | Total | 2025 (remaining) | 2026 | 2027 | | :--- | :--- | :--- | :--- | :--- | | Debt obligations | $10,233 | $31 | $1,059 | $2,318 | | Cash interest payments | $1,729 | $228 | $452 | $402 | | Programming and content | $831 | $190 | $289 | $190 | | Royalties, minimum guarantees and other | $1,825 | $410 | $486 | $364 | | Total | $15,240 | $1,025 | $2,496 | $3,383 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes financial results, including revenue trends, operating expenses, key performance metrics, liquidity, capital resources, and capital return programs Results of Operations Total revenue and operating income declined for Q2 2025 and the six-month period, primarily due to lower subscriber revenue and increased impairment costs Revenue by Segment (in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | SiriusXM | $1,614 | $1,640 | (2)% | | Pandora and Off-platform | $524 | $538 | (3)% | | Total Revenue | $2,138 | $2,178 | (2)% | - SiriusXM subscriber revenue decreased 1% in Q2 2025 due to a decline in the average number of subscribers 239 - Pandora subscriber revenue fell 6% due to a smaller subscriber base, partially offset by rate increases 248 - Impairment, restructuring and other costs increased significantly to $107 million in Q2 2025, primarily due to a $97 million charge for impairments related to terminated software projects 287 - Sales and marketing expenses decreased 19% YoY to $185 million in Q2 2025, driven by lower brand, streaming, and in-car marketing costs 279 Key Financial and Operating Performance Metrics SiriusXM subscribers and Pandora monthly active users declined, while Adjusted EBITDA decreased and Free Cash Flow increased for Q2 2025 Key Operating Metrics as of June 30 | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | SiriusXM Ending Subscribers (thousands) | 32,797 | 33,257 | (1)% | | - Self-pay subscribers | 31,275 | 31,484 | (1)% | | Pandora Monthly Active Users (thousands) | 42,684 | 45,129 | (5)% | | Pandora Self-pay Subscribers (thousands) | 5,706 | 5,951 | (4)% | Key Financial Metrics (Q2) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | SiriusXM ARPU | $15.22 | $15.24 | (0.1)% | | SiriusXM Avg. Self-pay Monthly Churn | 1.5% | 1.5% | 0% | | Adjusted EBITDA (millions) | $668 | $702 | (5)% | | Free Cash Flow (millions) | $402 | $317 | 27% | Liquidity and Capital Resources The company maintains liquidity through cash, operating cash flow, and a credit facility, utilizing funds for dividends and stock repurchases under an authorized program - The company expects to fund operating expenses, capital expenditures, debt service, and capital returns with existing cash, cash flow from operations, and borrowings under its credit facility 321 - A new stock repurchase program for $1,166 million was authorized on September 9, 2024 327 - As of June 30, 2025, $1,090 million remained available under this authorization 327 - On July 23, 2025, the board declared a quarterly dividend of $0.27 per share, payable on August 27, 2025 328 Item 3. Quantitative and Qualitative Disclosures About Market Risks The company manages its primary market risk exposure to interest rate changes by maintaining a balanced mix of fixed and variable rate debt - The company's primary market risk exposure is to interest rate changes 345 - This is managed through a mix of fixed and variable rate debt 346 Debt Structure by Rate Type (as of June 30, 2025) | Debt Type | Principal Amount (millions) | Weighted Average Interest Rate | | :--- | :--- | :--- | | Variable Rate Debt | $900 | 6.1% | | Fixed Rate Debt | $9,325 | 4.3% | Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective 348 - No changes occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting 349 Part II - Other Information This section covers legal proceedings, risk factors, and details on equity security sales and use of proceeds Item 1. Legal Proceedings The company is involved in various legal proceedings, including lawsuits regarding subscription practices, royalty fees, and a 'Do-Not-Call' litigation settlement - The company is defending a lawsuit from the New York Attorney General alleging violations related to its subscription cancellation processes 168169 - Multiple class actions and mass arbitrations are pending, alleging false advertising and lack of disclosure regarding the 'U.S. Music Royalty Fee' 173 - In July 2025, the company agreed to a $28 million settlement for a putative class action lawsuit alleging violations of the Telephone Consumer Protection Act's 'Do-Not-Call' provisions, to be paid in 2026 subject to court approval 179 Item 1A. Risk Factors No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, were reported - No material changes to risk factors were reported since the filing of the Annual Report on Form 10-K for the year ended December 31, 2024 352 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company's board-authorized stock repurchase program has $1.09 billion remaining, with 2.1 million shares repurchased for $45 million during Q2 2025 - As of June 30, 2025, $1.09 billion remained available for share repurchases under the current board authorization 354 Share Repurchases for the Quarter Ended June 30, 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 850,821 | $20.64 | | May 2025 | 661,843 | $21.74 | | June 2025 | 600,954 | $21.96 | | Total | 2,113,618 | $21.36 |