Sirius XM Reports Mixed Q2 and Reiterates 2022 Outlook Despite Lower Net Add Guidance

Sirius XM posted a mixed second quarter as revenue met and EBITDA missed FactSet consensus expectations. The SiriusXM service added 23,000 self-pay customers in the quarter, taking the 2022 total to a loss of 1,000 subscribers. However, management downgraded its full-year guidance to "positive" net additions from 500,000 net additions. The net loss was, as expected, due to constrained auto inventory in the United States in the second half of 2021 as churn dropped slightly to 1.5%. Despite the lower net addition guidance, the firm reiterated its financial targets for 2022, with cost-cutting expected to offset any impact from the potential loss of ad revenue. We are maintaining our narrow moat rating and $8.25 fair value estimate.