Sirius XM raises 2026 guidance, but Q3 revenue misses estimates

Sirius XM Holdings Inc. (SIRI) raised its full-year 2026 guidance for revenue, adjusted EBITDA and free cash flow on Oct. 29, 2026, when it reported results for the third quarter and the nine months ended Sept. 30.

Third-quarter revenue was $2.15 billion, which missed the $2.2 billion consensus estimate compiled by Finnhub. The company said revenue was down slightly from a year earlier, primarily reflecting lower equipment revenue due to higher memory costs.

Net income rose 7% to $317 million. Diluted earnings per share were 78 cents, down from 84 cents a year earlier, reflecting the accounting treatment of convertible notes, including fair value gains and assumed share dilution.

The company operates SiriusXM, Pandora and Off-Platform, and said it reaches approximately 255 million monthly listeners across its platforms.

Here's how the company did:

• Revenue: $2.15 billion vs. $2.16 billion a year earlier, missing the $2.2 billion estimate compiled by Finnhub
• Diluted EPS: 78 cents vs. 84 cents a year earlier
• Net income: $317 million vs. $297 million a year earlier
• Adjusted EBITDA: $694 million vs. $676 million a year earlier
• Free cash flow: $293 million vs. $257 million a year earlier

2026 guidance

The company raised its full-year 2026 guidance for the second consecutive quarter, increasing each of its three financial metrics by $25 million. It now expects total revenue of approximately $8.55 billion, adjusted EBITDA of approximately $2.65 billion and free cash flow of approximately $1.40 billion.

CEO Jennifer Witz said, "We're stabilizing our subscriber base, deepening engagement through differentiated content and experiences, and expanding the reach and capabilities of our advertising platform." She added that the results give the company "the confidence to raise our full-year financial guidance."

Segment results

SiriusXM generated total revenue of $1.60 billion, relatively flat year over year. Subscriber revenue rose to $1.50 billion, and advertising revenue fell 5% to $37 million.

SiriusXM self-pay subscribers increased by approximately 5,000 in the quarter, an improvement of 45,000 from the prior year period. The company said self-pay monthly churn improved to approximately 1.5%.

Pandora and Off-Platform revenue increased modestly to $549 million. Advertising revenue grew 1% to $419 million, while subscriber revenue declined 2% to $130 million. Monthly active users totaled 38.8 million.

Costs and capital returns

Free cash flow totaled $293 million in the quarter, up 14% from $257 million a year earlier. The company cited higher adjusted EBITDA, favorable working capital, lower interest expense and reduced capital expenditures.

During the quarter, the company returned $91 million through dividends and $33 million through share repurchases. It ended the quarter with a net debt-to-adjusted EBITDA ratio of 3.3x.

CFO Zac Coughlin said the company's "more efficient operating model and declining satellite capital expenditures position us to meaningfully accelerate share repurchases in 2027."

In a separate filing, the company said its subsidiary Sirius XM Radio LLC will post a reconciliation of its financial statements to the company's website, to comply with reporting obligations under the indentures governing its outstanding notes.