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Audio entertainment giant SiriusXM, the home of Howard Stern, said Thursday that it added 23,000 self-pay subscribers in its satellite radio unit in the first quarter, while paid promotional subscribers increased by 54,000.
Total subscribers stood at 34 million at the end of the latest financial quarter on June 30, with self-pay subscribers coming in at 32 million. Revenue in the second quarter rose 4 percent to $2.25 billion as SiriusXM pointed to headwinds from an “uncertain economic environment” threatening consumer spending, especially around new and used car sales.
“While we are confident that we can deliver positive self pay subscriber growth, we no longer expect to attain our prior subscriber guidance due to challenges and uncertainty in new and used auto sales. However, with strong predictable subscriber driven revenue, we are able to reiterate all of our financial guidance,” Jennifer Witz, CEO of SiriusXM, told analysts during a morning call.
SiriusXM saw growth tied to in-car subscriptions impacted by slowness in overall domestic auto sales, while it pointed to stronger uptake of streaming-only subscriptions as streaming plans are expected to be a bigger part of the company’s business going forward.
SiriusXM saw earnings fall to $292 million in the second quarter, compared to $433 million in the year-ago period when SiriusXM recorded a $140 million gain in satellite insurance recoveries.
Advertising revenue in the Pandora and off-platform segment rose 5 percent to $403 million. Off-platform advertising, including the company’s podcast business, increasied 50 percent year over year to $119 million in the second quarter of 2022.
Looking to the current third quarter, Witz pointed to headwinds in the advertising business. “There have been some cancellations and deferrals. And we expect some continuation of that and we’ve incorporated all that in the numbers,” she said.
Wells Fargo analyst Steven Cahall in a first reaction report noted: “Sirius lowered its 2022 SiriusXM self-pay net adds guide from around 500,000 to ‘positive’ versus our around 250,000 estimate and Street (estimate of) about 327,000 to better reflect a lack of new car inventory, which has resulted in a meaningful slowdown in new/used car sales with no clear evidence of a notable recovery over the near term.”
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