Sirius XM: Pandora Ad Revenue Growth Is Helping on Sirius XM’s Top and Bottom Lines

There is still room for digital transition in advertising, especially in the audio medium, as shown by Sirius XM’s third-quarter results. Advertising revenue growth in Pandora and off-platform, the firm’s streaming segment, mostly offset the continuing weakness in overall broadcast audio advertising, which contributed to a slight decline in the Sirius XM segment revenue. While Sirius XM platform subscribers declined slightly, the increase in trial funnel listeners from last year, albeit with no change from the previous quarter, indicates a slowdown in subscriber losses. We expect this to continue, which, with increasing streaming advertising revenue, bodes well for Sirius XM. Management maintained its full-year revenue, adjusted EBITDA, and free cash flow guidance. Our fair value estimate remains at $7.50.