Sirius XM Posts Decent 2022 Start Despite Sub Losses; Auto Supply Issues Should Abate in Second Half

Sirius XM posted a slightly stronger-than-expected start to a challenging 2022 as revenue exceeded and EBITDA met FactSet consensus expectations. The SiriusXM service lost 25,000 self-pay customers in the quarter, in line with the weak annual guidance of only 500,000 net additions, which management reiterated. The net loss was, as expected, due to the constrained auto inventory in the U.S. in the second half of 2021 as churn remained steady at 1.6%. Management continues to expect that most of the net adds for the year will occur in the second half and has seen some improvement in the paid subscriber funnel. We are maintaining our narrow moat and our $8.25 fair value estimate.