SiriusXM kicked off 2025 with revenue of $2.07 billion, down 4% year-over-year, and net income of $204 million, according to its Q1 2025 earnings release. The company reported free cash flow of $56 million, a 36% drop compared to Q1 2024, citing timing of payments, lower cash receipts, and higher capital expenditures.

While the company saw another quarterly decline in subscribers—losing 303,000 self-pay customers—it marked a 16% improvement over the same quarter last year. Monthly self-pay churn also ticked down to 1.6%, from 1.7% a year ago, aided by stronger retention and new programs including multi-year OEM bundles and integration in Tesla vehicles.

“We’re building a more focused, more efficient SiriusXM—aligned around what matters most to our listeners and our business,” said CEO Jennifer Witz. “I’m pleased with how we’ve started the year.”

Adjusted EBITDA landed at $629 million, down 3%, but margins held steady at 30%. The company reaffirmed full-year guidance, including expected revenue of $8.5 billion, $2.6 billion in adjusted EBITDA, and $1.15 billion in free cash flow.

Advertising Growth Offsets Some Subscriber Pressures

SiriusXM’s podcast business was a standout, with ad revenue in the category jumping 33% year-over-year. The company now reaches 70 million monthly podcast listeners and recorded nearly 1 billion podcast downloads in Q1 alone.

Total advertising revenue across all channels fell slightly to $394 million, but social and video ad bookings in the first quarter exceeded full-year 2024 totals, driven by the company’s new Creator Connect platform and exclusive deals with creators like Alex Cooper and Fantasy Footballers.

Cost Discipline Sharpens Amid Platform Consolidation

Total operating expenses dropped 4%, led by notable reductions in sales and marketing (down 19%) and product and technology (down 15%). Executives reiterated that SiriusXM is on track to deliver $200 million in annualized cost savings by year-end, while maintaining investment in core initiatives like 360L expansion, AI-based support tools, and new content.

On the automotive front, SiriusXM signed a multi-year agreement with Mitsubishi to bring 360L to new vehicles through 2030. The platform is now expected to be in more than half of new cars sold with SiriusXM this year.

INSIDER TAKE

SiriusXM’s Q1 2025 results show a company in controlled transition: subscriber declines remain, but the pace is slowing; revenue is soft, but margin discipline is holding. This is a management team leaning hard into cost optimization and advertising diversification as traditional self-pay subscription growth plateaus.

The bet on podcasting and creator-led ad formats appears to be paying off, with social and video sales now outpacing traditional display. And the low-cost, ad-supported tier expected later this year may provide a hedge against further subscriber erosion—especially as consumers grow more price-sensitive.

Yet risk remains. The ARPU decline to $14.86—driven by promotional pricing—suggests that the value equation still needs work. And while retention improved slightly, SiriusXM must demonstrate it can convert trial funnels and stabilize the base while scaling new monetization channels.

If the company can keep margins intact while shifting from legacy bundles to modern, multi-channel monetization, it may emerge more nimble than it entered the year. But with 360L, Tesla, and podcasting doing the heavy lifting, Q2 will be a crucial test of whether the strategy can scale.