Sirius XM NASDAQ: SIRI executives highlighted improved subscriber trends, rising advertising momentum and strong cash flow generation during the company’s first-quarter 2026 earnings call, while also fielding investor questions on a newly announced YouTube partnership and the long-term potential of its spectrum holdings.
First-quarter results: revenue up 1%, adjusted EBITDA up 6%
Chief Financial Officer Zac Coughlin said SiriusXM delivered “a solid start to the year” with revenue of $2.09 billion, up 1% year-over-year. Subscription revenue totaled $1.6 billion, also up about 1%, reflecting the February price increase and the carryover impact of a 2025 rate adjustment, partially offset by a smaller average subscriber base.
Advertising revenue increased 3% to $407 million, which Coughlin said was driven by strengthened podcasting, higher programmatic demand, and technology fees, more than offsetting softer demand in streaming music advertising.
Adjusted EBITDA increased about 6% to $666 million, and margin expanded 140 basis points to 31.9%, supported by revenue growth and cost discipline. Coughlin said SiriusXM captured $45 million toward its incremental $100 million gross cost savings target for 2026, including $27 million of operating expense run-rate savings and $18 million in capital expenditure savings.
Net income rose 20% to $245 million, while earnings per diluted share increased 22% to $0.72. Free cash flow more than tripled year-over-year to $171 million, which Coughlin attributed primarily to higher adjusted EBITDA and lower capital expenditures. Capital expenditures were $105 million, down from $189 million in the prior-year period, reflecting lower satellite spend and timing of capitalized software and hardware investments.
Subscriber metrics: churn at 1.5% and companion subscriptions lift net adds
Chief Executive Officer Jennifer Witz said the company began 2026 “executing with focus and discipline” on its priorities, and pointed to subscriber performance and retention as standout items in the quarter. Witz said self-pay net additions improved year-over-year to negative 111,000, an improvement of 192,000.
Coughlin said the improvement was driven in part by “growing adoption of companion subscriptions,” which contributed 124,000 incremental self-pay net additions in the quarter. Witz said companion subscriptions expand access across a household and have shown higher retention among participating households, helping support pricing actions.
Churn improved to approximately 1.5% despite the February price increase, which contributed to a 1% year-over-year increase in average revenue per user (ARPU) to $14.99. Witz said the company recorded “the lowest first quarter churn and highest subscriber satisfaction scores in our history,” adding that the latest customer study showed improvement across satisfaction, perceived value, likelihood to continue, likelihood to recommend, and “essentialness of our service.” She also said much of the satisfaction increase was driven by Gen X and millennials.
Witz and Coughlin both cautioned that the auto market remains a factor. Witz said management remains mindful of a “more measured auto sales environment” that could impact trial volumes, while Coughlin noted headwinds to trial starts amid a softer auto environment. In Q&A, Witz said conversion rates have faced pressure from mix shifts (younger purchasers and used vehicles), but added that SiriusXM with 360L has shown better conversion rates than non-360L vehicles and that the rollout is expected to rise from about 55% of sales to about 70% by year-end.
Advertising: podcasting surge and a new YouTube partnership
Management emphasized acceleration in advertising, especially podcasting. Witz said advertising revenue grew 3% to nearly $407 million, driven by a 37% increase in podcasting ad revenue. She cited traction in video and social via the company’s Creator Connect strategy and growth in programmatic demand, including revenue that more than doubled year-over-year through Google’s DV360.
Witz called the company’s YouTube relationship a “landmark partnership,” saying SiriusXM Media will serve as the exclusive U.S. advertising representative for YouTube’s audio inventory. She said the agreement expands reach to 255 million monthly listeners, “nearly 90% of the U.S. population aged 13 and older,” and is expected to begin this fall with expanded inventory, targeting, and measurement.
Chief Advertising Revenue Officer Scott Walker said the primary inventory includes YouTube Music’s ad-supported tier and “the YouTube main app, where users of YouTube are primarily listening versus watching,” including scenarios such as lyric or static image videos, YouTube use in cars via Android Auto or CarPlay, and long-form content such as podcasts on smart speakers. Walker referenced Edison Research indicating the reach of YouTube’s “listening first audience” at 212 million monthly listeners, and said the company’s combined network reach totals 255 million monthly users.
Executives said the partnership is expected to ramp over time. Witz told analysts she does not expect it to have a meaningful impact on 2026 results, with more impact anticipated in 2027 and beyond. On accounting, Witz said it will be treated “like our other ad representation deals” and will be included in the Pandora and off-platform segment.
Walker also addressed why YouTube would partner rather than sell the audio inventory internally, arguing that audio is a distinct channel requiring specialized sales relationships, creative and measurement expertise, and noting SiriusXM’s track record in digital audio monetization. He said the companies are “co-developing proprietary technology” to integrate with Google’s ad platform.
Cost savings, satellite depreciation, refinancing, and capital returns
On efficiency efforts, Witz said the company is expanding margins with a focus on efficiency and has already captured $45 million toward its $100 million cost savings target for 2026. Coughlin said the quarter included a $6 million charge for restructuring and severance, compared with $48 million a year earlier.
Coughlin also discussed higher depreciation tied to satellite planning. He said the company began decommissioning and planning the deorbit of its FM-6 satellite, reducing its useful life from 15 to 13 years because “with SXM-10 now in service, this capacity is no longer needed.” He said SiriusXM expects roughly $60 million of incremental non-cash depreciation in 2026, including $3 million in the first quarter, which will reduce reported net income and EPS but not affect free cash flow.
On the balance sheet, Coughlin said SiriusXM completed a $1.25 billion refinancing to retire all 2026 notes and redeem $250 million of 2027 notes. He said the company expects to reach its target leverage range of low-to-mid 3x by year-end; SiriusXM ended the first quarter at 3.6x. The company returned capital through $91 million in dividends and $21 million in share repurchases.
Spectrum optionality and 2026 outlook reaffirmed
In response to questions about spectrum monetization, Witz said the company controls 35 MHz of contiguous spectrum in the 2 GHz band, with 25 MHz supporting satellite radio operations, and noted the recent acquisition of 10 MHz of WCS C and D block licenses. She and Chief Operating Officer Wayne Thorsen said the company is in discussions with potential partners, but would not comment on specifics. Thorsen emphasized protecting core services, meeting regulatory commitments, and the likelihood of a multi-year path shaped by the company’s installed base, technology migration (including next-generation chipsets and 360L hybrid radios), and regulatory obligations. Thorsen said SiriusXM expects the footprint of vehicles with its new chipset to grow to more than 65 million by 2029.
Witz also briefly addressed recent media speculation, saying SiriusXM does not comment on rumors and asked analysts to focus on operating and financial performance.
Looking ahead, Witz and Coughlin reaffirmed full-year 2026 guidance for relatively flat revenue and stable adjusted EBITDA. Coughlin reiterated expectations for modestly lower self-pay net additions versus 2025 and free cash flow growth to approximately $1.35 billion in 2026, with “a path to $1.5 billion in 2027.” Executives said they are monitoring the auto environment and broader macro backdrop, but pointed to strong churn, engagement and early-year execution as support for the outlook.
About Sirius XM NASDAQ: SIRI
Sirius XM Holdings Inc is a leading audio entertainment company specializing in subscription-based satellite and streaming radio services. Formed in 2008 through the merger of Sirius Satellite Radio and XM Satellite Radio, the company delivers a broad range of programming across music, sports, news, talk and comedy channels. Sirius XM's offerings include exclusive live sports play-by-play, artist-curated music channels, news coverage from major networks and original talk and entertainment series.
Headquartered in New York City, Sirius XM serves listeners throughout the United States and Canada, reaching tens of millions of subscribers.
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