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Sirius XM Holdings Inc SIRI

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SiriusXM Reports Strong Q2 Net Adds; Content Depth Helps Stave Off Streaming Competitors

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Sirius XM posted another strong quarter, as revenue and EBITDA exceeded FactSet consensus expectations for the second quarter. The company added 355,000 self-pay SiriusXM customers in the quarter, taking the total over the last 12 months to an impressive 1,057,000 despite the impact of the pandemic on commuting and travel. The strong self-pay conversion along with the continued improvement in churn to a record low of 1.5% reinforces our belief that SiriusXM is holding its own versus its streaming competitors, which are gaining more traction in and out of cars. Management increased its 2021 guidance with satellite radio net adds to hit 1.1 million versus 800,000 previously. We are maintaining our narrow moat rating and plan to modestly raise our $7 fair value estimate to account for the improved guidance.

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Company Profile

Business Description

SiriusXM Holdings is now composed of two businesses: SiriusXM and Pandora. SiriusXM transmits music, talk shows, sports, and news via its two satellite radio networks, primarily to consumers in vehicles who pay a subscription fee. The firm’s radios come preinstalled on a wide range of light vehicles in the U.S. and Canada. The firm acquired Pandora Media in February 2019 via an all-stock transaction. Pandora is a streaming music platform that offers an ad-supported radio option and a paid on-demand service. Liberty Media owns 68% of SiriusXM, traded through its Liberty SiriusXM Group tracking stock.

1221 Avenue of the Americas, 35th Floor
New York, NY, 10020
T +1 212 584-5100
Sector Communication Services
Industry Broadcasting
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 5,726