Sirius XM Ends Strong 2021 on a Positive Note; Auto Inventory Issues Will Weigh on 2022 Growth

Sirius XM posted a slightly stronger than expected end to 2021 as revenue met and EBITDA exceeded FactSet consensus expectations. The SiriusXM service added 55,000 self-pay customers in the fourth quarter, in line with weak guidance. Even with the anemic end to the year, the service added a very impressive 1.152 million new subscribers in 2021 despite the ongoing impact of the pandemic on commuting and travel. Management provided new customer guidance of only 500,000 for 2022, which would be the weakest net add year since Sirius and XM merged in 2010. The modest guidance is driven by the expected large drop in paid promotional subscribers due to the constrained auto inventory in the U.S. We think the number is back-half weighted with an expectation of a slowly improving inventory situation.