Core Viewpoint - Sirius XM, a long-term holding of Berkshire Hathaway, has underperformed but may see better prospects in 2026 due to management strategies and market conditions [1][3]. Company Performance - Sirius XM is currently Berkshire's 13th-largest stock holding, with a market cap of $6.9 billion and a stock price of $20.51, down from a pandemic peak of $70 [2][4]. - The stock has seen a significant decline due to a drop in self-pay subscribers and overall revenue, alongside a substantial net debt of $10 billion [4][6]. Subscriber and Revenue Trends - The decline in subscribers and revenue is attributed to competition from streaming services and sluggish car sales, which are crucial for new customer acquisition [6][7]. - Despite these challenges, self-pay subscribers and revenue fell only 1% last quarter, indicating potential stabilization [8]. Advertising Revenue Growth - Advertising revenue increased by 1% last quarter, reflecting a shift towards lower-cost, ad-supported services [9]. - Sirius is experimenting with new ad-supported plans, including Sirius Free Access and SiriusXM Play, to attract more users [10]. Cost Management and Capital Expenditures - Management has achieved $200 million in cost savings and is continuing to restructure for further efficiency [13]. - Capital expenditures are projected to decline significantly, with satellite launch spending expected to decrease from $200 million to $115 million by 2026 [14]. Future Outlook - Even with flat revenue, profits and cash flow are expected to increase, with a target of $1.50 billion in free cash flow by 2027 [15]. - If auto sales recover and advertising tiers succeed, Sirius XM's revenue could stabilize and return to growth, potentially improving its stock valuation [17][19].