Sirius XM (NASDAQ:SIRI) reported second-quarter 2026 results marked by modest revenue growth, higher profitability, record-low churn and a substantial increase in free cash flow, prompting the company to raise its full-year financial outlook.
Chief Executive Officer Jennifer Witz said the company returned to positive net subscriber additions during the quarter, increased average revenue per user and recorded the lowest churn rate in its history. The company reported self-pay net additions of 22,000, its strongest second-quarter subscriber performance in four years.
Revenue, Earnings and Cash Flow Rise
Consolidated revenue increased 1% year over year to nearly $2.2 billion. Subscription revenue rose 1% to $1.6 billion, supported by February pricing actions, while advertising revenue increased 5% to $454 million.
Adjusted EBITDA rose 3% to $691 million, and the adjusted EBITDA margin expanded by 1 percentage point to 32%. Net income increased 17% to $239 million, while diluted earnings per share rose 23% to $0.70.
Free cash flow grew 48% from a year earlier to $593 million. Chief Financial Officer Zac Coughlin said the increase reflected higher adjusted EBITDA, lower cash taxes and favorable timing of vendor payments and capital expenditures.
The company raised its 2026 guidance by $25 million each for revenue, adjusted EBITDA and free cash flow. SiriusXM now expects:
- Approximately $8.525 billion in revenue
- Approximately $2.625 billion in adjusted EBITDA
- Approximately $1.375 billion in free cash flow
Coughlin said the outlook incorporates an expected second-half headwind from higher memory costs for hardware modules. Equipment revenue fell 22% year over year to $36 million, which management attributed to increased memory costs tied to broader semiconductor-market conditions.
Subscription Trends and Retention Efforts
SiriusXM’s core segment generated $1.6 billion in revenue, slightly higher than the prior-year period. Subscriber revenue grew 1% to $1.5 billion, while ARPU increased 1% to $15.32.
Self-pay churn was approximately 1.4% during the quarter. Witz said continuous-service initiatives, which reduce friction when customers change vehicles, contributed to the record-low result. She added that underlying churn also improved independently of the initiative because of lower vehicle-related and non-payment churn.
Companion plans contributed 123,000 incremental self-pay net additions during the quarter. Coughlin said more than 80% of users surveyed said the offering increased the value of their subscription, while more than three-quarters said it made them more likely to remain subscribers.
Management nevertheless maintained its expectation for modestly lower full-year self-pay net additions than in 2025. The company expects comparisons to become more difficult in the fourth quarter as it anniversaries the launch of continuous service. SiriusXM is also reducing promotional acquisition offers and discounting in an effort to improve subscriber quality and long-term customer value.
Witz said the company expects churn to remain in a roughly 1.4% to 1.6% range over the longer term, while still seeing opportunities to improve engagement through expanded customer and listening data.
Advertising Momentum and YouTube Opportunity
The company’s Pandora and off-platform segment reported revenue growth of 4% to $543 million. Advertising revenue in the segment increased 5% to $413 million, led by approximately 30% growth in podcasting revenue, 29% growth in programmatic advertising and 20% growth in technology fees. Those gains were partly offset by softer streaming-music advertising.
Podcasting revenue grew 30% companywide, driven by higher CPMs, greater sell-through and advertiser demand, Witz said. SiriusXM also cited advertising demand around its FIFA World Cup coverage, which included sponsorship packages for Bank of America, Lowe’s, Verizon, Xfinity and McDonald’s.
Management expects broader commercialization of YouTube Audio later in 2026 following an early test-and-learn period. Chief Advertising Revenue Officer Scott Walker said the offering is intended to address instances where YouTube users are primarily listening rather than watching, including through YouTube Music, smart speakers and mobile or in-car listening.
Walker said SiriusXM now can claim reach of 255 million monthly active users, or 90% of adults age 13 and older, through the opportunity. However, Coughlin said the company does not expect meaningful financial contribution from the YouTube arrangement during the remainder of 2026 or the first half of 2027. Management expects the opportunity to become more significant in the second half of 2027 as advertiser adoption scales.
Content, Sports and Capital Allocation
Witz highlighted the company’s content investments, including new full-time artist channels for Morgan Wallen and Green Day, expanded news programming, podcast renewals and the launch of WWE Radio. Sports streaming increased 14% year over year, according to the company.
SiriusXM also introduced Sports Pass, a lower-priced sports-focused subscription offering, and announced an agreement with Audacy to add local sports stations from 22 major U.S. markets. President and Chief Content Officer Scott Greenstein said the Audacy partnership is intended to complement SiriusXM’s national sports voices and league programming with local sports-talk coverage.
The company said 360L, its in-car platform, is expanding across nearly every major original equipment manufacturer lineup. OEM subscribers averaged approximately 24 hours of monthly listening, while subscribers who also stream through the SiriusXM app engaged more than twice as much. Listening through personalized artist stations increased 50% year over year.
On costs, Coughlin said SiriusXM captured $74 million year to date toward its target of $100 million in incremental gross cost savings in 2026, including $48 million in operating expense savings and $26 million in capital expenditure savings.
Capital expenditures declined to $130 million from $145 million a year earlier, primarily because of lower satellite investment following the late-June launch of SXM-11. The company expects the planned launch of SXM-12 next year to complete its current satellite investment cycle.
SiriusXM reduced total debt by $292 million during the quarter and returned nearly $97 million to shareholders through dividends and share repurchases. Net leverage ended the quarter at 3.4 times adjusted EBITDA, within the company’s long-term target range of the low to mid-3 times.
Coughlin said share repurchases are expected to become a more important use of excess cash flow, with an increase anticipated in the second half of 2026 and potentially more significant repurchases in 2027. The company had approximately $996 million remaining under its repurchase authorization at quarter-end.
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.
