Sirius XM Earnings: Stability Persists as Innovation Mitigates Declining Core

Key Morningstar Metrics for Sirius XM Holdings

• Fair Value Estimate: $31.00
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: Very High

What We Thought of Sirius XM Holdings’ Earnings

After raising full-year guidance following the third quarter, Sirius XM Holdings’ SIRI fourth-quarter revenue, EBITDA, and free cash flow all exceeded the heightened expectations. Free cash flow increased 24% in 2025, to $1.3 billion, while full-year revenue and EBITDA were both down about 2%.

Why it matters: Sirius XM’s stock is priced for perpetual decline, but we’ve long seen a clear path to free cash flow growth despite our view that its subscriber base will keep shrinking and legacy subscription prices are too high, portending a decline in average revenue per user, or ARPU.

• The firm is now nearing the end of a satellite upgrade cycle and long past the peak capital spending associated with it. As long as operating performance remains somewhat stable, the firm should continue to generate material cash.
• Advertising was a bright spot—with fourth-quarter ad revenue up 3% year over year—and it has room to continue growing, as most of this revenue comes from consumption of programming off of SiriusXM’s platforms, notably in podcasts.

The bottom line: We raised our fair value estimate to $31 per share from $30, and our long-term forecast is unchanged.

Big picture: We are clear-eyed that SiriusXM’s traditional business is in long-term decline and is competitively disadvantaged against music streaming services, hence our no-moat rating. However, creative solutions are softening the core business’s decline, and off-platform prospects are bright.

• In the fourth quarter, SiriusXM added 110,000 self-paying subscribers, after it introduced Companion Plans for households with multiple vehicles and continuous service to avoid interruption and customer losses when subscribers get new vehicles.
• These alternatives, along with new and lower-priced subscription alternatives, are the types of creative solutions that help mitigate subscriber losses, but we still expect long-term decline. Many of these are also the types of solutions that weigh on ARPU.