SiriusXM has outlined a new strategic plan that will include $200 million in cost cuts and pivoting resources away from streaming.
“At SiriusXM, we are focusing on the strengths that set us apart – including our strong core subscriber base, our unique position in vehicle, and our unrivaled, curated content — and taking steps to drive profitability and cash flow as we face marketplace headwinds impacting the company’s growth trajectory,” SiriusXM CEO Jennifer Witz said in a statement. “We have a clear path forward and are confident we can deliver for our stockholders.”
The satellite and online radio provider plans to double down on its automotive subscriber segment, where 90% of the company’s subscribers are currently embedded, by focusing its resources on increasing retention. As a result, the company will shift marketing and other resources away from “high-cost, high-churn audiences” in streaming to its “core revenue-generating segments.”
In December 2023, SiriusXM launched a streaming app for listening in a outside of the car. The company said it would “continue to highlight the value-added benefits of the app to its core subscribers,” and will utilize the streaming platform for “automotive distribution where beneficial,” such as Tesla’s 2024 holiday update.
SiriusXM is also targeting $200 million in annualized savings exiting 2025 after delivering approximately $350 million in run rate savings in 2023 and 2024.
“The Company is scrutinizing the lifetime value of subscribers, optimizing marketing efforts for higher returns, aligning content investments with its strategic and profitability goals, and closely monitoring the return on technology investments to drive greater operational efficiency and enhance the listener experience,” SiriusXM said.
SiriusXM plans to continue to invest in human curated and hosted music channels, live sports, its roster of leading audio talent and its growing podcast network. The company will also leverage its position in ad-supported audio to monetized ad-based experiences in its flagship SiriusXM service and prioritize ad-tech investments to simplify campaign planning, purchasing and measurement for advertiser campaigns across its portfolio.
Additionally, SiriusXM’s chief product and technology officer Joseph Inzerillo has stepped down to pursue other opportunities.
Former ADT Inc. executive vice president and chief business officer Wayne Thorsen has also bee appointed to serve as the company’s new EVP and chief operating officer, effective Dec. 16.
Thorsen will oversee SiriusXM’s product and technology functions and be responsible for aspects of its commercial activities, as well as business development, certain consumer marketing activities, and corporate strategy.
Looking ahead to 2025, SiriusXM expects $8.5 billion in revenue, $2.6 billion in adjusted EBITDA and $1.15 billion in free cash flow, following 2024 guidance of $8.675 billion in revenue, $2.7 billion in adjusted EBITDA and $1 billion in free cash flow.
It also anticipates that it will reduce its debt by $700 million in 2025 and achieve a leverage ratio of 3.6 times by the end of 2025. Additionally, SiriusXM is targeting $1.5 billion in free cash flow in 2027.
The company’s board of directors remains committed to the company’s quarterly dividend of 27 cents per share, or $1.08 per share annually, which has returned more than $350 million to shareholders per year. It has also authorized $1.17 billion in stock repurchases. The timing and amount will be determined based on the company’s evaluation of market conditions and other factors and the program may be discontinued or suspended at any time.
