SiriusXM Raises Guidance Again as Cost Cuts Lift Cash Flow 14%

Sirius XM Holdings raised its full-year financial guidance for the second straight quarter on Thursday, as cost cuts lifted profit and cash flow even though revenue slipped, and the satellite radio company returned to self-pay subscriber growth, according to the earnings release it filed with an 8-K.

The company increased each of its three key 2026 targets by $25 million. It now expects revenue of about $8.55 billion, adjusted EBITDA of about $2.65 billion and free cash flow of about $1.40 billion.

Leaner costs, higher profit

Third-quarter revenue dipped slightly from a year earlier to $2.15 billion, mainly because of lower equipment revenue tied to higher memory costs. Net income rose 7% to $317 million, but earnings per diluted share fell 7% to 78 cents from 84 cents, which the company attributed to the accounting treatment of convertible notes, including fair value gains and assumed share dilution.

Adjusted EBITDA grew 3% to $694 million, and adjusted EBITDA margin widened one percentage point to 32%. Free cash flow rose 14% to $293 million from $257 million.

The savings came from several lines. Programming costs fell 6% to $136 million on favorable contract renewals, customer service and billing expenses dropped 6% to $108 million on more automation and fewer calls, and sales and marketing declined 4% to $169 million.

"Our third-quarter performance reflects the progress we're making in building a stronger, more durable SiriusXM," CEO Jennifer Witz said in the release. "We're stabilizing our subscriber base, deepening engagement through differentiated content and experiences, and expanding the reach and capabilities of our advertising platform."

Subscribers stabilize

SiriusXM added about 5,000 self-pay subscribers in the quarter, a 45,000 improvement from the prior-year period. Companion subscriptions contributed 107,000 self-pay net additions, which more than offset lower conversion rates, the company said. Self-pay monthly churn improved to about 1.5%, and the service ended the quarter with about 33 million total subscribers.

SiriusXM segment revenue was relatively flat at $1.60 billion, with average revenue per user largely stable at $15.18. Equipment revenue fell 16%.

At Pandora and Off-Platform, revenue rose modestly to $549 million, with advertising up 1% to $419 million and subscriber revenue down 2% to $130 million. Pandora's monthly active users totaled 38.8 million.

Buybacks set to accelerate

The company returned $91 million in dividends and $33 million in share repurchases during the quarter and ended it with net debt of 3.3 times adjusted EBITDA.

CFO Zac Coughlin said SiriusXM generated about $1.1 billion of free cash flow in the first nine months and "achieved our long-term leverage target." He said the more efficient operating model and declining satellite capital expenditures "position us to meaningfully accelerate share repurchases in 2027."

By the numbers

• $2.15 billion: third-quarter revenue, down slightly
• $694 million: adjusted EBITDA, up 3%
• $293 million: free cash flow, up 14%
• About 5,000: self-pay net additions
• About $8.55 billion: new 2026 revenue guidance

Sources

1. Sirius XM Holdings Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0000908937-26-000027)

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