With the majority of the broadcast media industry’s second quarter earnings reports due to arrive over the next two weeks, could the widely diverse fiscal health results seen from a variety of companies today be a harbinger of what to expect? Baxter Pharmaceuticals shares tumbled by nearly 20% in morning trading as Hurricane Helene recovery efforts continued to impact revenue. In contrast, Microsoft Corp. shares were up by more than 5% as the company blew past its Q2 targets.
Then, there’s Sirius XM. Its earnings per share missed expectations by more than 26%.
What led shareholders to sell of shares of the Nasdaq GlobalSelect-traded “SIRI” on Thursday morning, sending it down by more than 8%?
It wasn’t losing fewer subscribers thanks to notable strength in its podcast business. Rather, an increase in operating expenses coupled with a slight year-over-year revenue decline resulted in net income attributable to Sirius XM Holdings Inc. of $205 million ($0.57 per diluted share). This declined from $304 million ($0.74 per share).
The Zacks Consensus Estimate was for Sirius XM to enjoy EPS of $0.79 in Q2 2025.
For CEO Jennifer Witz, addressing the core revenue drivers for Sirius XM will likely be a chief C-Suite priority. Subscriber revenue declined to $1.63 million, from $1.66 million; advertising revenue slipped to $432 million, from $443 million. As such, total revenue when factoring in equipment and other unspecified dollar generators slipped to $2.14 billion, from $2.18 billion.
While that’s a challenge, so is the cost of its revenue share and royalty agreements. In Q2, those expenses widened to $722 million, from $708 million.
Then, there are programming and talent costs, including the hefty paycheck veteran host Howard Stern collects. Those costs totaled $151 million, rising from $148 million in the second quarter of 2024.
Subscriber acquisition costs were also up, moving to $107 million from $92 million.
Meanwhile, Sirius XM took a non-cash charge of $107 million for “impairment, restructuring and other costs” in Q2 2025.
With the advertising-plus-lower subscriber cost model dominating the video space, it is proving to be challenging in the audio space, with Spotify also experiencing growth frustrations in Q2. For the three month period ending June 30, 2025, Sirius XM’s Pandora and off-platform advertising revenue declined by 2%, to $394 million.
The decrease, Sirius XM noted, was primarily driven by reduced advertiser demand in streaming music, partially offset by revenue generated from podcasts and higher tech fees.
“We expect Pandora and Off-platform advertising revenue to slightly increase due to growth in off-platform monetization, including through podcasts, as well as higher technology fees,” the company said in a SEC filing.
Adjusted EBITDA was $668 million in Q2 2025, compared to $702 million in the same period last year. “The year-over-year change reflects the effects of the modest revenue decline partially offset by disciplined cost management,” Sirius XM said, as the adjusted EBITDA margin for the second quarter of 2025 was 31%.
Witz took a positive tone in offering her prepared comments on the lackluster quarter for Sirius XM.
“Our renewed strategic focus continued to deliver this quarter,” she said. “We achieved meaningful year-over-year subscriber improvements, signed exciting new content agreements, accelerated momentum in podcasting, and unlocked significant cost efficiencies. We’re seeing deeper engagement from our most loyal listeners, early traction from sustained strength across key performance metrics and operational improvements. We’re becoming a more focused, more flexible company—centered on delivering real and increasing value to our listeners and driving long-term growth for our business.”
For Sirius XM Chief Financial Officer Tom Barry, the company’s Q2 results “demonstrate the balance we’re achieving between disciplined cost control and strategic investment. We maintained a healthy EBITDA margin, generated strong free cash flow, and delivered significant cost savings—all while reallocating capital to areas with the greatest potential impact. These efforts are already contributing to improved subscriber trends, enhancing our performance and reinforcing our ability to navigate external headwinds. In addition, we returned $137 million to shareholders during the quarter, including $92 million in dividends and $45 million in share repurchases. As we look ahead, we remain confident in our strategy and are on track to meet our full-year guidance.”
Meanwhile, in communication to RBR+TVBR received midday Thursday, a company spokesperson highlighted how Sirius XM beat expectations on revenue (despite a $4 million year-over-year decrease), EBITDA, and Free Cash Flow.
Adjusted EBITDA was $668 million in the second quarter of 2025, compared to $702 million in the same period last year.
SiriusXM generated $402 million in free cash flow in Q2, an increase of $85 million — or 27% driven by timing of payments, lower capital expenditures, and the elimination of Liberty-level overhead.
PODCASTS: SIRIUS’ SHINING STAR
In the second quarter, podcasts were a strong performer — and the highlight for Sirius XM in the three-month period. Revenue was up nearly 50% year-over-year as former Daily Show host Trevor Noah signed a multi-year deal to launch an original podcast spanning comedy, culture, and current events. Live shows such as SmartLess with John Mayer “continued to boost engagement and branded opportunities,” Sirius XM noted.
Alas, that growth alone can’t mask the fact that Sirius XM lost 68,000 self-pay subscribers in the second quarter. Yes, that is better than a decrease of 303,000 in the January-March period and better than estimated losses of 176,840 by Visible Alpha. But declines are declines, and with investors hungry for growth across multiple industries, the frustration is clearly being demonstrated on Wall Street.
As of 12:30pm Pacific neared, “SIRI” was down by 8.4% to $21 on volume of 11.14 million against average volume of 3.31 million.
READY TO PLAY
Speaking during Sirius XM’s earnings call for analysts and advertisers, Witz played up SiriusXM Play. That’s the new in-car and in-app ad-supported plan, taking a page from OTT players such as Netflix and Amazon Prime.
“As we look to highlight our unique differentiators to new potential customers and thoughtfully grow our subscriber base, we are building additional packages to meet their needs,” she said, noting that SiriusXM expects Play to be available in almost 100 million vehicles by the end of this year.
How many elect for the plan is one more question analysts and investors may be ready to ask as those pesky macroeconomic forces continue to meddle with profit generation — even though royalty payments continue to hobble both Sirius XM and Spotify to the enrichment of a recording industry adamant on squeezing more dollars from broadcast radio.
On the call, Witz noted, “We continue to see challenges in the ad market due to economic, consumer, and tariff uncertainty, ranging from budget pullbacks to dollars shifting to lower-funnel channels to drive short term sales, with categories such as retail more adversely impacted.”
Additionally, Sirius XM is seeing “pricing pressure in streaming from an excess of [Connected TV] inventory and audio competitors reacting. Podcasting, however, remains a bright spot.”
