Sirius XM Holdings Inc.

02/05/2026 | Press release | Distributed by Public on 02/05/2026 08:39

Annual Report for Fiscal Year Ending DECEMBER 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
All amounts referenced in this Item 7 are in millions, except subscriber amounts are in thousands and per subscriber and per installation amounts are in ones, unless otherwise stated.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
Executive Summary
Liberty Media Transactions
Sirius XM Holdings Inc., the reporting company under this Annual Report on Form 10-K, is the product of a series of transactions that closed on Monday, September 9, 2024. Any references to the "Company," "we," "us," or "ours" refers to Sirius XM Holdings Inc. and its consolidated subsidiaries following the Transactions.
On September 9, 2024 at 4:05 p.m., New York City time, Liberty Media Corporation ("Liberty Media" or "Former Parent") completed its previously announced split-off (the "Split-Off") of its former wholly owned subsidiary, Liberty Sirius XM Holdings Inc. ("SplitCo"). The Split-Off was accomplished by Liberty Media redeeming each outstanding share of Liberty Media's Series A, Series B and Series C Liberty SiriusXM common stock ("Liberty SiriusXM common stock"), par value $0.01 per share, in exchange for 0.8375 of a share of SplitCo common stock, par value $0.001 per share (the "Redemption"), with cash being paid to entitled record holders of Liberty SiriusXM common stock in lieu of any fractional shares of common stock of SplitCo.
Following the Split-Off, on September 9, 2024 at 6:00 p.m., New York City time (the "Merger Effective Time"), a wholly owned subsidiary of SplitCo merged with and into Sirius XM Holdings Inc. ("Old Sirius"), with Old Sirius surviving the merger as a wholly owned subsidiary of SplitCo (the "Merger" and together with the Split-Off, the "Transactions"). Upon consummation of the Merger, each share of common stock of Old Sirius, par value $0.001 per share, issued and outstanding immediately prior to the Merger Effective Time (other than shares owned by SplitCo and its subsidiaries) was converted into one-tenth (0.1) of a share of SplitCo common stock, with cash being paid to entitled record holders of Old Sirius common stock in lieu of any fractional shares of common stock of SplitCo.
At the Merger Effective Time, Old Sirius was renamed "Sirius XM Inc." and SplitCo was renamed "Sirius XM Holdings Inc." In connection with the Transactions and by operation of Rule 12g-3(a) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), SplitCo became the successor issuer to Old Sirius and succeeded to the attributes of Old Sirius as the registrant, including Old Sirius's Commission File Number and CIK number. Upon completion of the Transactions, Liberty Media ceased to own any shares of Sirius XM Holdings Inc.
On September 6, 2024, Sirius XM Radio LLC, our wholly owned subsidiary, converted from a Delaware corporation to a Delaware limited liability company.
We operate two complementary audio entertainment businesses - our SiriusXM business and our Pandora and Off-platform business.
SiriusXM
Our SiriusXM business features a wide range of content, including, music, sports, entertainment, comedy, talk and news channels, podcasts and infotainment services, all available in the United States on a subscription fee basis. SiriusXM holds a 70% equity interest and 33% voting interest in Sirius XM Canada Holdings Inc. ("Sirius XM Canada").
The primary source of revenue from the SiriusXM business is subscription fees, with most of its customers subscribing to monthly or annual plans. Additional revenue streams include advertising on select music and non-music channels in certain packages, direct sales of radios and accessories, and other ancillary services. As of December 31, 2025, the SiriusXM business had approximately 32.9 million subscribers in the U.S., while Sirius XM Canada had approximately 2.4 million subscribers. Sirius XM Canada's subscribers are not included in our subscriber count or subscriber-based operating metrics.
In addition to our audio entertainment businesses, we provide connected vehicle services to several automakers. These services are designed to enhance the safety, security and driving experience of consumers. We also offer a suite of data services that includes graphical weather and fuel prices, a traffic information service and real-time weather services in boats and airplanes.
Pandora and Off-platform
Pandora offers a highly personalized audio entertainment platform allowing users to create customized stations and playlists while also enabling on-demand search and playback of songs and albums. The Pandora service leverages advanced content programming algorithms, listener data, and music attributes to predict user music preferences, play content suited to the tastes of each listener, and introduce each listener to music consistent with the consumer's preferences. The Pandora service is available as (1) an ad-supported radio service, (2) a radio subscription service (Pandora Plus) and (3) an on-demand subscription service (Pandora Premium).
The majority of revenue from Pandora is generated from advertising on Pandora's ad-supported radio service. Pandora also derives subscription revenue from its Pandora Plus and Pandora Premium subscribers. Our Pandora and Off-platform business also sells advertising on other audio platforms and in widely distributed podcasts, which we consider to be off-platform services. As of December 31, 2025, Pandora had approximately 41.1 million monthly active users and 5.6 million subscribers.
SiriusXM also sells advertising on other audio platforms and in widely-distributed podcasts, which it considers to be off-platform services. SiriusXM has an arrangement with SoundCloud Holdings, LLC ("SoundCloud") to be its exclusive ad sales representative in the U.S. and certain European countries and offer advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms. It also has arrangements to serve as the ad sales representative for certain podcasts. In addition, through AdsWizz Inc., SiriusXM provides a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.
The information contained in this Annual Report on Form 10-K represents a combination of the historical information of SplitCo (now renamed Sirius XM Holdings Inc.) prior to the Merger Effective Time and Old Sirius.
Results of Operations - December 31, 2025 and 2024
Set forth below are our results of operations for the year ended December 31, 2025 compared with the year ended December 31, 2024. Refer to our Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission ("SEC") on January 30, 2025 for our results of operation for the year ended December 31, 2024 compared with the year ended December 31, 2023. The results of operations are presented for each of our reporting segments for revenue and cost of services and on a consolidated basis for all other items.
For the Years Ended December 31, 2025 vs 2024 Change
(in millions)
2025 2024 Amount %
Revenue
SiriusXM:
Subscriber revenue $ 5,960 $ 6,076 $ (116) (2) %
Advertising revenue 157 167 (10) (6) %
Equipment revenue 178 182 (4) (2) %
Other revenue 122 128 (6) (5) %
Total SiriusXM revenue
6,417 6,553 (136) (2) %
Pandora and Off-platform:
Subscriber revenue 526 540 (14) (3) %
Advertising revenue 1,615 1,606 9 1 %
Total Pandora and Off-platform revenue 2,141 2,146 (5) - %
Total revenue
8,558 8,699 (141) (2) %
Cost of services
SiriusXM:
Revenue share and royalties 1,542 1,565 (23) (1) %
Programming and content 555 550 5 1 %
Customer service and billing 375 369 6 2 %
Transmission 162 190 (28) (15) %
Cost of equipment 9 10 (1) (10) %
Total SiriusXM cost of services
2,643 2,684 (41) (2) %
Pandora and Off-platform:
Revenue share and royalties 1,308 1,270 38 3 %
Programming and content 64 61 3 5 %
Customer service and billing 74 79 (5) (6) %
Transmission 29 35 (6) (17) %
Total Pandora and Off-platform cost of services 1,475 1,445 30 2 %
Total cost of services
4,118 4,129 (11) - %
Subscriber acquisition costs 414 369 45 12 %
Sales and marketing 760 894 (134) (15) %
Product and technology
263 296 (33) (11) %
General and administrative 549 497 52 10 %
Depreciation and amortization 547 578 (31) (5) %
Impairment, restructuring and other costs 436 3,453 (3,017) (87) %
Total operating expenses 7,087 10,216 (3,129) (31) %
Income (loss) from operations 1,471 (1,517) 2,988 nm
Other income (expense), net
Interest expense (459) (496) 37 7 %
Gain on extinguishment of debt
- 12 (12) nm
Other income (expense), net 44 136 (92) (68) %
Total other expense (415) (348) (67) (19) %
Income (loss) before income taxes 1,056 (1,865) 2,921 nm
Income tax expense (251) (210) (41) (20) %
Net income (loss) $ 805 $ (2,075) $ 2,880 139 %
nm - not meaningful
SiriusXM Revenue
SiriusXM Subscriber Revenue includes fees charged for self-pay and paid promotional subscriptions, U.S. Music Royalty Fees and other ancillary fees.
For the years ended December 31, 2025 and 2024, subscriber revenue was $5,960 and $6,076, respectively, a decrease of 2%, or $116. The decrease was primarily attributed to a reduction in self-pay revenue resulting from a decline in the average number of subscribers and an increase in self-pay subscribers on promotional plans, partially offset by rate increases on certain self-pay plans.
We expect SiriusXM subscriber revenues to remain relatively flat with higher average revenue per user ("ARPU") offset by declines in the number of average subscribers.
SiriusXM Advertising Revenue includes the sale of advertising on SiriusXM's non-music channels and select music channels within ad-supported plans.
For the years ended December 31, 2025 and 2024, advertising revenue was $157 and $167, respectively, a decrease of 6%, or $10. The decrease was primarily due to lower advertising demand for news and sports channels.
We expect our SiriusXM advertising revenue to grow as we continue to leverage co-selling initiatives across our brands and platforms.
SiriusXM Equipment Revenueincludes revenue and royalties from the sale of satellite radios, components and accessories.
For the years ended December 31, 2025 and 2024, equipment revenue was $178 and $182, respectively, a decrease of 2%, or $4. The decrease was driven by the transition to higher cost next generation chipsets as well as lower chipset production.
We expect equipment revenue to decline due to higher costs associated with the transition to our next generation chipset.
SiriusXM Other Revenue includes service fee revenue from Sirius XM Canada, revenue from our connected vehicle services and ancillary revenues.
For the years ended December 31, 2025 and 2024, other revenue was $122 and $128, respectively, a decrease of 5%, or $6. The decrease was driven by lower revenue from our connected vehicle services as well as lower royalty revenue from Sirius XM Canada.
We expect other revenue to remain relatively flat.
Pandora and Off-platform Revenue
Pandora and Off-platform Subscriber Revenue includes fees charged for Pandora Plus and Pandora Premium.
For the years ended December 31, 2025 and 2024, Pandora and Off-platform subscriber revenue was $526 and $540, respectively, a decrease of 3%, or $14. The decrease was driven by a decline in the subscriber base, partially offset by the full-year impact of prior year price increases on Pandora subscription plans.
We anticipate Pandora and Off-platform subscriber revenues to remain relatively flat.
Pandora and Off-platform Advertising Revenue is generated primarily from audio, display and video advertising from on-platform and off-platform advertising.
For the years ended December 31, 2025 and 2024, Pandora and Off-platform advertising revenue was $1,615 and $1,606, respectively, an increase of 1%, or $9. The increase was driven by revenue generated from podcasts, programmatic and higher technology fees; partially offset by reduced advertiser demand in streaming music.
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.
Total Revenue
Total Revenue for the years ended December 31, 2025 and 2024 was $8,558 and $8,699, respectively, a decrease of 2%, or $141.
SiriusXM Cost of Services
SiriusXM Cost of Services includes revenue share and royalties, programming and content, customer service and billing, transmission and equipment expenses.
SiriusXM Revenue Share and Royalties include royalties for transmitting content, including streaming royalties, as well as revenue share agreements with automakers, content providers and advertisers.
For the years ended December 31, 2025 and 2024, revenue share and royalties were $1,542 and $1,565, respectively, a decrease of 1%, or $23, but increased as a percentage of total SiriusXM revenue. The decrease was driven by lower subscription revenue, partially offset by higher webcasting royalties.
We expect our SiriusXM revenue share and royalty costs to remain flat as a percentage of total SiriusXM revenue.
SiriusXM Programming and Content includes costs to acquire, create, promote and produce content. We have entered into agreements with third parties for music and non-music programming that require us to pay license fees and other amounts.
For the years ended December 31, 2025 and 2024, programming and content expenses were $555 and $550, respectively, an increase of 1%, or $5, and increased as a percentage of total SiriusXM revenue. The increase was driven by higher personnel-related costs.
We expect our SiriusXM programming and content expenses to decline due to lower costs to obtain certain content.
SiriusXM Customer Service and Billing includes costs related to the operation and management of internal and third-party customer service centers, our subscriber management systems, billing and collection processes, bad debt expense, and transaction fees.
For the years ended December 31, 2025 and 2024, customer service and billing expenses were $375 and $369, respectively, an increase of 2%, or $6, and increased as a percentage of total SiriusXM revenue. The increase was driven by higher subscriber management system and transaction costs, partially offset by lower call center costs and bad debt expense.
We expect our SiriusXM customer service and billing expenses to decrease as a result of reductions in call center and personnel-related costs, partially offset by higher costs associated with subscriber management systems and transaction costs.
SiriusXM Transmission consists of costs associated with the operation and maintenance of our terrestrial repeater networks; satellites; satellite telemetry, tracking and control systems; satellite uplink facilities; studios and delivery of our Internet and 360L streaming and connected vehicle services.
For the years ended December 31, 2025 and 2024, transmission expenses were $162 and $190, respectively, a decrease of 15%, or $28, and decreased as a percentage of total SiriusXM revenue. The decrease was driven primarily by lower hosting costs associated with our streaming platform.
We expect our SiriusXM transmission expenses to remain relatively flat.
SiriusXM Cost of Equipment includes costs from the sale of satellite radios, components and accessories and provisions for inventory allowance attributable to products purchased for resale in our direct to consumer distribution channels.
For the years ended December 31, 2025 and 2024, cost of equipment was $9 and $10, respectively, a decrease of 10%, or $1, and decreased as a percentage of total SiriusXM revenue. The decrease was driven by lower inventory reserves.
We expect our SiriusXM cost of equipment to decrease due to lower sales volumes.
Pandora and Off-platform Cost of Services
Pandora and Off-platform Cost of Services includes revenue share and royalties, programming and content, customer service and billing and transmission expenses.
Pandora and Off-platform Revenue Share and Royaltiesincludes licensing fees paid for streaming music, podcast content, and revenue share paid to third party publishers. Payments are made based on advertising impressions delivered or click-through actions, and these costs are recorded in the related period.
For the years ended December 31, 2025 and 2024, revenue share and royalties were $1,308 and $1,270, respectively, an increase of 3%, or $38, and increased as a percentage of total Pandora and Off-platform revenue. The increase was driven by podcast revenue share, partially offset by a decline in the subscriber base.
We expect our Pandora and Off-platform revenue share and royalties to increase with the growth in our podcast revenue.
Pandora and Off-platform Programming and Content includes costs to produce owned and operated podcasts, live listener events and promote content.
For each of the years ended December 31, 2025 and 2024, programming and content expenses were $64 and $61, respectively, an increase of 5%, or $3, and increased as a percentage of total Pandora and Off-platform revenue. The increase was primarily attributable to higher podcast programming costs.
We expect our Pandora and Off-platform programming and content costs to remain relatively flat.
Pandora and Off-platform Customer Service and Billingincludes transaction fees on subscription purchases through mobile app stores and bad debt expense.
For the years ended December 31, 2025 and 2024, customer service and billing expenses were $74 and $79, respectively, a decrease of 6%, or $5, and decreased as a percentage of total Pandora and Off-platform revenue. The decrease was primarily driven by lower transaction fees.
We expect our Pandora and Off-platform customer service and billing costs to remain relatively flat.
Pandora and Off-platform Transmissionincludes costs associated with content streaming, maintaining our streaming radio and on-demand subscription services and creating and serving advertisements through third-party ad servers.
For the years ended December 31, 2025 and 2024, Pandora and Off-Platform transmission expenses were $29 and $35, respectively, a decrease of 17%, or $6, and decreased as a percentage of total Pandora and Off-platform revenue. The decrease was driven by lower bandwidth costs.
We expect our Pandora and Off-platform transmission costs to decrease due to cost optimization efforts.
Operating Costs
Subscriber Acquisition Costs are costs associated with our satellite radio service. These include hardware subsidies paid to radio manufacturers, distributors and automakers; subsidies paid for chipsets and certain other components used in manufacturing radios; device royalties for certain radios and chipsets; product warranty obligations and freight. The majority of subscriber acquisition costs are incurred and expensed in advance of acquiring a subscriber. Subscriber acquisition costs do not include advertising costs, marketing, loyalty payments to distributors and dealers of satellite radios or revenue share payments to automakers and retailers of satellite radios.
For the years ended December 31, 2025 and 2024, subscriber acquisition costs were $414 and $369, respectively, an increase of 12%, or $45, and increased as a percentage of total revenue. The increase was primarily driven by contractual changes with certain automakers and higher costs related to migrating to the wideband chipset.
We expect subscriber acquisition costs to stay relatively flat.
Sales and Marketing includes costs for marketing, advertising, media and production, including promotional events and sponsorships; cooperative and artist marketing; and personnel related costs including salaries, commissions, and sales support. Marketing costs include expenses related to direct mail, outbound telemarketing, email communications, social media, television and streaming performance media and third party promotional offers.
For the years ended December 31, 2025 and 2024, sales and marketing expenses were $760 and $894, respectively, a decrease of 15%, or $134, and decreased as a percentage of total revenue. The decrease was primarily due to lower streaming marketing spend.
We expect sales and marketing expenses to increase due to an increase in our brand and other marketing costs.
Product and Technology consists primarily of compensation and related costs to develop chipsets and new products and services, including streaming and connected vehicle services, research and development for broadcast information systems and the design and development costs to incorporate SiriusXM radios into new vehicles manufactured by automakers.
For the years ended December 31, 2025 and 2024, product and technology expenses were $263 and $296, respectively, a decrease of 11%, or $33, and decreased as a percentage of total revenue. The decrease was primarily driven by lower personnel-related and hosting costs.
We anticipate product and technology expenses will remain relatively flat as we optimize our technology spend.
General and Administrative primarily consists of compensation and related costs for personnel and facilities, and includes costs related to our finance, legal, human resources and information technology departments.
For the years ended December 31, 2025 and 2024, general and administrative expenses were $549 and $497, respectively, an increase of 10%, or $52, and increased as a percentage of total revenue. The increase was driven by higher legal costs, including amounts associated with a settlement reserve for certain litigation matters of $29 which is expected to be paid in 2026, higher personnel-related costs and lower insurance recoveries; partially offset by the elimination of Former Parent operating costs, legal settlement income recognized during 2025, and certain state tax litigation recoveries recorded.
We expect our general and administrative expenses, excluding the impact of any past or future litigation insurance recoveries and settlement reserves, to decline due to lower technology and rent costs.
Depreciation and Amortization reflects the allocation of the costs of assets used in operations such as our satellite constellations, property, equipment and intangible assets over their estimated service lives.
For the years ended December 31, 2025 and 2024, depreciation and amortization expense was $547 and $578, respectively. The decrease was primarily associated with certain assets that reached the end of their useful lives.
Impairment, Restructuring and Other Costs represents impairment charges associated with the carrying amount of an asset exceeding the asset's fair value, restructuring expenses associated with contract terminations, the abandonment of certain leased office spaces as well as employee severance charges and other charges associated with organizational changes in connection with the Transactions.
For the years ended December 31, 2025 and 2024, impairment, restructuring and other costs were $436 and $3,453, respectively. During the year ended December 31, 2025, we recorded charges of $296 associated with restructuring charges, a charge of $109 associated with impairments related to terminated software projects, severance and other employee costs of $23 and Transaction related costs of $8. During the year ended December 31, 2024, we recorded impairment charges of $3,355 primarily related to impairments of Goodwill and equity method investments, Transactions related costs of $71, and a charge of $27 associated with severance and other restructuring costs.
Other (Expense) Income
Interest Expense represents the cost of interest on outstanding debt.
For the years ended December 31, 2025 and 2024, interest expense was $459 and $496, respectively. The decrease was primarily driven by a lower average outstanding debt balance.
Other Income, Net primarily includes realized and unrealized gains and losses from our debt measured at fair value, bond hedges, our Deferred Compensation Plan and other investments, intergroup interests, interest and dividend income, our share of the income or loss from equity investments and transaction costs related to non-operating investments.
For the years ended December 31, 2025 and 2024, other income, net was $44 and $136, respectively. During the year ended December 31, 2025, we recorded unrealized gains on debt measured at fair value, trading gains associated with the investments held for our Deferred Compensation Plan and earnings on unconsolidated entity investments. During the year ended December 31, 2024, we recorded unrealized gains on debt measured at fair value, earnings on unconsolidated entity investments and trading gains associated with the investments held for our Deferred Compensation Plan.
Income Taxes
Income Tax Expense includes the change in our deferred tax assets, current federal and state tax expenses and foreign withholding taxes.
For the years ended December 31, 2025 and 2024, income tax expense was $251 and $210, respectively.
Our effective tax rate of 23.8% for the year ended December 31, 2025 was primarily driven by state and local taxes and tax losses related to share-based compensation, partially offset by certain credits. Our effective tax rate of (11.3)% for the year
ended December 31, 2024, was primarily driven by federal and state income tax expense, offset by the nondeductible impairment of goodwill.
Key Financial and Operating Performance Metrics
In this section, we present certain financial performance measures, some of which are presented as Non-GAAP items, which include free cash flow and adjusted EBITDA. We also present certain operating performance measures. Our adjusted EBITDA excludes the impact of share-based payment expense. Additionally, when applicable, our adjusted EBITDA metric excludes the effect of significant items that do not relate to the on-going performance of our business. We use these Non-GAAP financial and operating performance measures to manage our business, to set operational goals and as a basis for determining performance-based compensation for our employees. See the accompanying Glossary for more details and for the reconciliation to the most directly comparable GAAP measure (where applicable).
We believe these Non-GAAP financial and operating performance measures provide useful information to investors regarding our financial condition and results of operations. We believe these Non-GAAP financial and operating performance measures may be useful to investors in evaluating our core trends because they provide a more direct view of our underlying costs. We believe investors may use our adjusted EBITDA to estimate our current enterprise value and to make investment decisions. We believe free cash flow provides useful supplemental information to investors regarding our cash available for future subscriber acquisitions and capital expenditures, to repurchase or retire debt, to acquire other companies and our ability to return capital to stockholders. By providing these Non-GAAP financial and operating performance measures, together with the reconciliations to the most directly comparable GAAP measure (where applicable), we believe we are enhancing investors' understanding of our business and our results of operations.
Our Non-GAAP financial measures should be viewed in addition to, and not as an alternative for or superior to, our reported results prepared in accordance with GAAP. In addition, our Non-GAAP financial measures may not be comparable to similarly-titled measures by other companies. Please refer to the Glossary for a further discussion of such Non-GAAP financial and operating performance measures and reconciliations to the most directly comparable GAAP measure (where applicable). Subscribers and subscription related revenues and expenses associated with our connected vehicle services and Sirius XM Canada are not included in SiriusXM's subscriber count or subscriber-based operating metrics. Subscribers to the Cloud Cover music programming service are now included in Pandora's subscriber count.
Set forth below are our subscriber balances as of December 31, 2025 compared to December 31, 2024. Refer to our Form 10-K for the year ended December 31, 2024 filed with the SEC on January 30, 2025 for our Non-GAAP financial and operating performance measures for the year ended December 31, 2024 compared with the year ended December 31, 2023.
As of December 31, 2025 vs 2024 Change
(subscribers in thousands) 2025 2024 Amount %
SiriusXM
Self-pay subscribers 31,345 31,646 (301) (1) %
Paid promotional subscribers 1,582 1,580 2 - %
Ending subscribers 32,927 33,226 (299) (1) %
Sirius XM Canada subscribers 2,437 2,516 (79) (3) %
Pandora and Off-platform
Monthly active users - all services 41,112 43,344 (2,232) (5) %
Self-pay subscribers
5,630 5,774 (144) (2) %
The following table contains our Non-GAAP financial and operating performance measures which are based on our adjusted results of operations for the years ended December 31, 2025 and 2024.
For the Years Ended December 31,
2025 vs 2024 Change
Twelve Months
(subscribers in thousands) 2025 2024 Amount %
SiriusXM
Self-pay subscribers (301) (296) (5) (2) %
Paid promotional subscribers 2 (353) 355 101 %
Net additions (299) (649) 350 54 %
Weighted average number of subscribers 32,797 33,292 (495) (1) %
Average self-pay monthly churn 1.5 % 1.6 % (0.1) % (6) %
ARPU (1)
$ 15.11 $ 15.21 $ (0.10) (1) %
SAC, per installation $ 18.21 $ 14.55 $ 3.66 25 %
Pandora and Off-platform
Weighted average number of subscribers 5,698 5,929 (231) (4) %
Ad supported listener hours (in billions) 9.75 9.94 (0.19) (2) %
Advertising revenue per thousand listener hours (RPM) $ 91.78 $ 100.59 $ (8.81) (9) %
Total Company
Adjusted EBITDA $ 2,665 $ 2,732 $ (67) (2) %
Free cash flow $ 1,256 $ 1,015 $ 241 24 %
(1) ARPU for SiriusXM excludes subscriber revenue from our connected vehicle services of $169 and $164 for the years ended December 31, 2025 and 2024, respectively.
SiriusXM
Subscribers. At December 31, 2025, SiriusXM had 32,927 subscribers, a decrease of 299, from the 33,226 subscribers as of December 31, 2024. Our subscriber base declined primarily due to lower self-pay subscribers attributable to lower vehicle conversion rates, partially offset by reductions in voluntary and non-pay churn as well as growth in new acquisition initiatives.
For the years ended December 31, 2025 and 2024, net subscriber additions were (299) and (649), respectively, an improvement of 350. Self-pay net additions decreased primarily due to lower streaming net additions and conversion rates, partially offset by lower churn, growth in new acquisition initiatives as well as the implementation in the fourth quarter of continuous service practices for subscribers and the offer of companion subscriptions to subscribers. Paid promotional net additions also improved compared to the prior year periods driven by higher vehicle sales.
Sirius XM Canada Subscribers. At December 31, 2025, Sirius XM Canada had approximately 2,437 subscribers, a decrease of 79, or 3%, from the approximately 2,516 Sirius XM Canada subscribers as of December 31, 2024.
Average Self-pay Monthly Churn is derived by dividing the monthly average of self-pay deactivations for the period by the average number of self-pay subscribers for the period. (See accompanying Glossary for more details.)
For the years ended December 31, 2025 and 2024, our average self-pay monthly churn rate was 1.5% and 1.6%, respectively. The decrease was driven by lower vehicle and non-pay churn.
ARPU is derived from total earned SiriusXM subscriber revenue (excluding revenue derived from our connected vehicle services) and net advertising revenue, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period. (See the accompanying Glossary for more details.)
For the years ended December 31, 2025 and 2024, ARPU was $15.11 and $15.21, respectively. The decrease was driven by an increase in self-pay subscribers on promotional plans, partially offset by rate increases on certain self-pay plans.
SAC, Per Installation,is derived from subscriber acquisition costs and margins from the sale of radios, components and accessories (excluding connected vehicle services), divided by the number of satellite radio installations in new vehicles and shipments of aftermarket radios for the period. (See the accompanying Glossary for more details.)
For the years ended December 31, 2025 and 2024, SAC, per installation, was $18.21 and $14.55, respectively. The increase was driven by a transition to higher cost chipsets as well as contractual changes with certain automakers.
Pandora and Off-platform
Monthly Active Users. At December 31, 2025, Pandora had approximately 41,112 monthly active users, a decrease of 2,232 monthly active users, or 5%, from the 43,344 monthly active users as of December 31, 2024. The decrease in monthly active users was driven by churn and a decline in the number of new users.
Subscribers. At December 31, 2025, Pandora had approximately 5,630 subscribers, a decrease of 144, or 2%, from the approximately 5,774 subscribers as of December 31, 2024.
Ad supported listener hours are a key indicator of our Pandora business and the engagement of our Pandora listeners. We include ad supported listener hours related to Pandora's non-music content offerings in the definition of listener hours.
For the years ended December 31, 2025 and 2024, ad supported listener hours were 9,751 and 9,940, respectively, a decrease of 2%, or 189. The decrease was primarily driven by the decline in monthly active users, partially offset by higher hours per active user.
RPMis a key indicator of our ability to monetize advertising inventory created by listener hours on the Pandora services. Ad RPM is calculated by dividing advertising revenue by the number of thousands of listener hours of our Pandora advertising-based service.
For the years ended December 31, 2025 and 2024, RPM was $91.78 and $100.59, respectively. The decrease was driven by lower advertiser demand in streaming music due to macroeconomic uncertainty.
Total Company
Adjusted EBITDA. EBITDA is defined as net income (loss) before interest expense, income tax expense and depreciation and amortization. Adjusted EBITDA excludes the impact of other expense (income), loss on extinguishment of debt,
impairment, restructuring and other costs, Former Parent operating costs, other non-cash charges such as share-based payment expense, and legal settlements and reserves (if applicable). (See the accompanying Glossary for a reconciliation to GAAP and for more details.)
For the years ended December 31, 2025 and 2024, adjusted EBITDA was $2,665 and $2,732, respectively, a decrease of 2%, or $67. The decrease was driven by declines in subscriber revenue as well as increases in general and administrative expenses and subscriber acquisition costs; partially offset by lower sales and marketing, product and technology, and transmission expenses.
Free Cash Flow includes cash provided by operations, net of additions to property and equipment, and restricted and other investment activity. (See the accompanying Glossary for a reconciliation to GAAP and for more details.)
For the years ended December 31, 2025 and 2024, free cash flow was $1,256 and $1,015, respectively, an increase of 24%, or $241. The increase was driven by the elimination of Liberty transaction costs, lower cash taxes paid and lower capital expenditures.
Liquidity and Capital Resources
The following table presents a summary of our cash flow activity for the year ended December 31, 2025 compared with the year ended December 31, 2024. Refer to our Form 10-K for the year ended December 31, 2024 filed with the SEC on January 30, 2025 for our cash flows for the year ended December 31, 2024 compared with the year ended December 31, 2023.
For the Years Ended December 31,
(in millions) 2025 2024 2025 vs 2024
Net cash provided by operating activities $ 1,898 $ 1,741 $ 157
Net cash used in investing activities (747) (970) 223
Net cash used in financing activities (1,219) (916) (303)
Net decrease in cash, cash equivalents and restricted cash (68) (145) 77
Cash, cash equivalents and restricted cash at beginning of period 170 315 (145)
Cash, cash equivalents and restricted cash at end of period $ 102 $ 170 $ (68)
Cash Flows Provided by Operating Activities
Cash flows provided by operating activities increased by $157 to $1,898 for the year ended December 31, 2025 from $1,741 for the year ended December 31, 2024.
Our largest source of cash provided by operating activities is cash generated by subscription and subscription-related revenues. We also generate cash from the sale of advertising through the Pandora and Off-platform business, advertising on certain non-music and select music channels on SiriusXM and the sale of satellite radios, components and accessories. Our primary uses of cash from operating activities include revenue share and royalty payments to distributors, programming and content providers and payments to radio manufacturers, distributors and automakers. In addition, uses of cash from operating activities include payments to vendors to service, maintain and acquire listeners and subscribers, general corporate expenditures and compensation and related costs.
Cash Flows Used in Investing Activities
Cash flows used in investing activities in the year ended December 31, 2025 were primarily due to spending for capitalized software and hardware, the construction of satellites and acquisitions of tax-effective investments for total cash consideration of $106. Cash flows used in investing activities in the year ended December 31, 2024 were primarily due to spending for capitalized software and hardware, the construction of satellites and acquisitions of tax-effective investments for total cash consideration of $244. We spent $389 and $413 on capitalized software and hardware as well as $204 and $262 to construct satellites during the years ended December 31, 2025 and 2024, respectively.
Cash Flows Used in Financing Activities
Cash flows used in financing activities consists of the issuance and repayment of long-term debt, purchases of our common stock, the payment of cash dividends and taxes paid in lieu of shares issued for stock-based compensation. Proceeds from long-term debt have been used to fund our operations, construct and launch new satellites, fund acquisitions, invest in other infrastructure improvements and purchase shares of our common stock.
Cash flows used in financing activities in the year ended December 31, 2025 were primarily due to the repayment of $2,141 of debt, the payment of cash dividends of $365, the purchase and retirement of shares of our common stock under our
repurchase program of $136 and the payment of $33 for taxes in lieu of shares issued for share-based compensation, partially offset by proceeds from debt borrowings of $1,462. Long-term debt proceeds and repayments are reported gross within the statement of cash flows and primarily relate to the Delayed Draw Incremental Term Loan and the Credit Facility.
Cash flows used in financing activities in the year ended December 31, 2024 were primarily due to the repayment of $3,914 of debt, the payment of cash dividends of $143 and the payment of $44 for taxes in lieu of shares issued for share-based compensation, partially offset by proceeds from debt borrowings of $3,205. Long-term debt proceeds and repayments are reported gross within the statement of cash flows and primarily relate to the Convertible Notes, the Exchangeable Notes, that certain margin loan agreement (which is no longer outstanding) of Liberty Siri MarginCo, LLC which merged with and into SplitCo following the Transactions that was secured by shares of our common stock (the "Margin Loan") and the Credit Facility (as defined in Note 12 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K).
Future Liquidity and Capital Resource Requirements
Based upon our current business plans, we expect to fund operating expenses, capital expenditures, including the construction of replacement satellites, working capital requirements, interest payments, taxes and scheduled maturities of our debt with existing cash, cash flow from operations and borrowings under the Credit Facility, including the Delayed Draw Incremental Term Loan. As of December 31, 2025, $1,980 was available for future borrowing under the Credit Facility and no amount was available under the Delayed Draw Incremental Term Loan. We believe that we have sufficient cash and cash equivalents, as well as debt capacity, to cover our estimated short and long-term funding needs, including upcoming maturities of debt, amounts to construct, launch and insure replacement satellites, as well as fund future stock repurchases and dividend payments and to pursue strategic opportunities.
Our ability to meet our debt and other obligations depends on our future operating performance and on economic, financial, competitive and other factors.
We regularly evaluate our business plans and strategy. These evaluations often result in changes to our business plans and strategy, some of which may be material and significantly change our cash requirements. These changes in our business plans or strategy may include: the acquisition of unique or compelling programming; the development and introduction of new features or services; significant new or enhanced distribution arrangements; investments in infrastructure, such as satellites, equipment or radio spectrum and acquisitions and investments, including acquisitions and investments that are not directly related to our existing business.
We may from time to time purchase our outstanding debt through open market purchases, privately negotiated transactions or otherwise. Purchases or retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
We have made, and expect to continue to make, certain tax-efficient equity investments in clean energy technologies, including industrial carbon capture and storage. These investments are expected to produce tax credits and related tax losses. The payments on these equity investments will be classified as investing activities from a cash flow perspective, while the tax credits and losses will benefit our federal cash taxes in operating activities.
Stock Repurchase Program
Following the closing of the Transactions, on September 9, 2024, our board of directors authorized for repurchase an aggregate of $1,166 of our common stock. The board of directors did not establish an end date for this stock repurchase program. Shares of common stock may be purchased from time to time on the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act, in privately negotiated transactions, including in accelerated stock repurchase transactions, or otherwise. We intend to fund any stock repurchases through a combination of cash on hand, cash generated by operations and future borrowings. The size and timing of any purchases will be based on a number of factors, including price and business and market conditions. As of December 31, 2025, our cumulative repurchases since the closing of the Transactions under our stock repurchase program totaled 6,538 thousand shares for $143, and $1,024 remained available for additional repurchases under our existing stock repurchase program authorization.
Dividend
On January 29, 2026, our board of directors declared a quarterly dividend on our common stock in the amount of $0.27 per share of common stock payable on February 27, 2026 to stockholders of record as of the close of business on February 11, 2026.
Debt Covenants
The indentures governing SiriusXM's senior notes and the credit agreement governing the Credit Facility and the Delayed Draw Incremental Term Loan include restrictive covenants. The indentures governing the senior notes also contain covenants that, among other things, limit Sirius XM's ability and the ability of its subsidiaries to create certain liens; enter into sale/leaseback transactions; and merge or consolidate or transfer, lease, assign or otherwise dispose of all or substantially all of Sirius XM Radio LLC's assets. As of December 31, 2025, we were in compliance with such covenants. For a discussion of our "Debt Covenants," refer to Note 12 to our audited consolidated financial statements included in this Annual Report on Form 10-K.
Off-Balance Sheet Arrangements
We do not have any significant off-balance sheet arrangements other than those disclosed in Note 15 to our audited consolidated financial statements included in this Annual Report on Form 10-K that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Contractual Cash Commitments
For a discussion of our "Contractual Cash Commitments," refer to Note 15 to our audited consolidated financial statements included in this Annual Report on Form 10-K.
Related Party Transactions
For a discussion of "Related Party Transactions," refer to Note 11 to our audited consolidated financial statements included in this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
Our audited consolidated financial statements are prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods. Accounting estimates require the use of significant management assumptions and judgments as to future events, and the effect of those events cannot be predicted with certainty. The accounting estimates will change as new events occur, more experience is acquired and more information is obtained. We evaluate and update our assumptions and estimates on an ongoing basis and use outside experts to assist in that evaluation when we deem necessary. We have identified all significant accounting policies in Note 2 to our audited consolidated financial statements in Part II, Item 8, of this Annual Report on Form 10-K.
Non-Financial Instrument Valuations.Our non-financial instrument valuations are primarily comprised of our determination of the estimated fair value allocation of net tangible and identifiable intangible assets acquired in business combinations, our annual assessment of the recoverability of our goodwill and other nonamortizable intangible assets, such as trademarks, and our evaluation of the recoverability of our other long-lived assets upon certain triggering events. If the carrying value of our long-lived assets exceeds their estimated fair value, we are required to write the carrying value down to fair value. Any such writedown is included in Impairment, restructuring and other costs in our audited consolidated statement of operations. Judgment is required to estimate the fair value of our long-lived assets. We may use quoted market prices, prices for similar assets, present value techniques and other valuation techniques to prepare these estimates. We may need to make estimates of future cash flows and discount rates as well as other assumptions in order to implement these valuation techniques. Due to the degree of judgment involved in our estimation techniques, any value ultimately derived from our long-lived assets may differ from our estimate of fair value. As each of our operating segments has long-lived assets, this critical accounting policy affects the financial position and results of operations of each segment. Our intangible assets include goodwill, other indefinite-lived assets (our FCC licenses and trademarks) and definite-lived assets. Our annual impairment assessment of our goodwill and our indefinite-lived assets is performed as of the fourth quarter of each year. We also review our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset is not recoverable. If an impairment exists, the impairment is measured as the amount by which the carrying amount of an intangible asset exceeds its estimated fair value.
•Goodwill: ASC 350, Intangibles - Goodwill and Other, states that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. Under the updated guidance per Accounting Standards Update ("ASU") 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, the requirements for any reporting unit with a zero or negative carrying
amount to perform a qualitative assessment is eliminated. In accordance with updated guidance, we recognize goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. The accounting guidance also allows entities the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period. In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more likely than not that an indicated impairment exists for any of our reporting units.
We elected to perform a quantitative assessment of the goodwill in our Pandora and Off-platform reporting unit and performed a qualitative assessment of the goodwill in our SiriusXM reporting unit. Fair value of our Pandora and Off-platform reporting unit was determined using a combination of an income approach, using a discounted cash flow ("DCF") model, and a market approach, employing a guideline public company approach. The DCF model, which estimates fair value based on the present value of future cash flows, requires us to make various assumptions regarding the timing and amount of these cash flows, including growth rates, operating margins and capital expenditures for a projection period, plus the terminal value of the business at the end of the projection period. The terminal value is estimated using a long-term growth rate, which is based on expected trends and projections. A discount rate is determined for the reporting unit based on the risks of achieving the future cash flows, including risks applicable to the industry and market as a whole, as well as the capital structure of comparable entities. Additionally, assumptions related to guideline company financial multiples used in the market approach are based on current market observations.
•Indefinite-lived Assets: ASC 350-30-35, Intangibles - General Intangibles Other than Goodwill, provides for an option to first perform a qualitative assessment to determine whether it is more likely than not that an asset is impaired. If the qualitative assessment supports that it is more likely than not that the fair value of the asset exceeds its carrying value, a company is not required to perform a quantitative impairment test. If the qualitative assessment does not support that the fair value of the asset exceeds its carrying value, then a quantitative assessment is performed. We recognize impairment as the difference between the carrying amount of an asset and its estimated fair value.
Our annual impairment assessment of our identifiable indefinite lived intangible assets is performed as of the fourth quarter of each year. An assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. If the carrying value of the intangible assets exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Fair value of the Pandora trade name was determined using a DCF model. The DCF model included significant assumptions about revenue growth rates, royalty rate, long-term growth rates and enterprise specific discount rates.
•Definite-lived Assets: We carry our definite-lived assets at cost less accumulated amortization. We assess definite-lived assets for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. If an event or circumstance is identified indicating the carrying value may not be recoverable, the sum of future undiscounted cash flows is compared to the carrying value. If the carrying value exceeds the future undiscounted cash flows, the carrying value of the asset is reduced to its fair value. The fair value of assets is determined as either the expected selling price less selling costs (where appropriate) or the present value of the estimated future cash flows, adjusted as necessary for market factors.
Useful Life of Broadcast/Transmission System.Our satellite system includes the costs of our satellite construction, launch vehicles, launch insurance, capitalized interest, spare satellites, terrestrial repeater network and satellite uplink facilities. We monitor our satellites for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset is not recoverable.
We currently operate four in-orbit and two spare satellites, FM-5, FM-6, XM-5, SXM-8, SXM-9, and SXM-10. Our FM-5 satellite was launched in 2009 and reached the end of its depreciable life in 2024. Our FM-6 satellite was launched in 2013 and is expected to reach the end of its depreciable life in 2028. Our XM-5 satellite was launched in 2010 and reached the end of its depreciable life in 2025. Our SXM-8 satellite was launched in 2021 and is expected to reach the end of its depreciable life in 2036. Our SXM-8 satellite replaced our XM-3 satellite which was successfully deorbited in November 2025. In January 2025, our SXM-9 satellite successfully completed in-orbit testing and replaced our SXM-8 satellite which now operates as an in-orbit spare. In July 2025, our SXM-10 satellite successfully completed its in-orbit testing and replaced our FM-6 satellite which now operates as an in-orbit spare. We have entered into agreements for the design, construction and launch of two additional satellites, SXM-11 and SXM-12, which are expected to replace our XM-5 and Sirius FM-5 satellites.
Our satellites have been designed to last fifteen years. Our in-orbit satellites may experience component failures which could adversely affect their useful lives. We monitor the operating condition of our in-orbit satellites and if events or
circumstances indicate that the depreciable lives of our in-orbit satellites have changed, we will modify the depreciable life accordingly. If we were to revise our estimates, our depreciation expense would change.
Income Taxes. Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
We assess the recoverability of deferred tax assets at each reporting date and, where applicable, a valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. Our assessment includes an analysis of whether deferred tax assets will be realized in the ordinary course of operations based on the available positive and negative evidence, including the scheduling of deferred tax liabilities and forecasted income from operations. The underlying assumptions we use in forecasting future taxable income require significant judgment. In the event that actual income from operations differs from forecasted amounts, or if we change our estimates of forecasted income from operations, we could record additional charges or reduce allowances in order to adjust the carrying value of deferred tax assets to their realizable amount. Such adjustments could be material to our audited consolidated financial statements.
As of December 31, 2025, we had a valuation allowance of $87 relating to deferred tax assets that are not more likely than not to be realized due to the timing of certain state net operating loss limitations and acquired net operating losses that were not likely to be utilized.
ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. If the tax position is not more likely than not to be sustained, the gross amount of the unrecognized tax position will not be recorded in the financial statements but will be shown in tabular format within the uncertain income tax positions. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs due to the following conditions: (1) the tax position is "more likely than not" to be sustained, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax position has expired. A number of years may elapse before an uncertain tax position is effectively settled or until there is a lapse in the applicable statute of limitations. We record interest and penalties related to uncertain tax positions in Income tax expense in our consolidated statements of comprehensive income. As of December 31, 2025, the gross liability for income taxes associated with uncertain tax positions was $198.
Glossary
Self-pay subscriber - a self-pay subscriber is a user that, as of the date of determination, was party to a customer agreement with SiriusXM or Pandora, and (i) has paid or agreed to pay a subscription fee, including at a promotional price, or (ii) the subscription fee has been paid by an automaker for a period of three years or greater. For subscription plans that entitle the customer to multiple registered users, each registered user under such plan is counted as a self-pay subscriber. Lifetime subscribers to the SiriusXM service are counted as self-pay subscribers because they are party to a customer agreement with SiriusXM and have paid a subscription fee, although in almost all cases the revenue from such subscriptions have been fully recognized in prior periods. Our new continuous service practices allow for subscribers to keep their subscription active even when it is not linked to a vehicle. Certain users that are party to a customer agreement with SiriusXM or Pandora and have paid or agreed to pay a small promotional price for a trial subscription are not counted as self-pay subscribers because the promotional price is considered to be de minimis and, in management's view, the payment is not indicative of the user's intent to subscribe to the service in the near-term.
Paid promotional subscriber - a paid promotional subscriber is a user that, as of the date of determination, has their subscription fee paid for by a third party, for a fixed trial subscription period, which typically range from one to twelve months but is less than three years. We count prepaid shipped but not activated vehicles as paid promotional subscribers.
Monthly active users- the number of distinct registered users on the Pandora services, including subscribers, which have consumed content within the trailing 30 days to the end of the final calendar month of the period. The number of monthly active users on the Pandora services may overstate the number of unique individuals who actively use our Pandora service, as one individual may use multiple accounts. To become a registered user on the Pandora services, a person must sign-up using an email address or access our service using a device with a unique identifier, which we use to create an account for our service.
Average self-pay monthly churn - for in-car and retail radio subscriptions, the SiriusXM monthly average of self-pay deactivations for the period divided by the average number of self-pay subscribers for the period.
Adjusted EBITDA - EBITDA is defined as net income (loss) before interest expense, income tax expense and depreciation and amortization. Adjusted EBITDA is a Non-GAAP financial measure that excludes or adjusts for the impact of other expense (income), gain/loss on extinguishment of debt, impairment, restructuring and other costs, Former Parent operating costs, other non-cash charges such as share-based payment expense and legal settlements and reserves (if applicable). We believe adjusted EBITDA is a useful measure of the underlying trend of our operating performance, which provides useful information about our business apart from the costs associated with our capital structure and purchase price accounting. We believe investors find this Non-GAAP financial measure useful when analyzing our past operating performance with our current performance and comparing our operating performance to the performance of other communications, entertainment and media companies. We believe investors use adjusted EBITDA to estimate our current enterprise value and to make investment decisions. As a result of large capital investments in our satellite radio system, our results of operations reflect significant charges for depreciation expense. We believe the exclusion of share-based payment expense is useful as it is not directly related to the operational conditions of our business. We also believe the exclusion of the legal settlements and reserves, impairment, restructuring and other costs, to the extent they occur during the period, is useful as they are significant expenses not incurred as part of our normal operations for the period.
Adjusted EBITDA has certain limitations in that it does not take into account the impact to our consolidated statements of comprehensive income of certain expenses, including share-based payment expense. We endeavor to compensate for the limitations of the Non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the Non-GAAP measure. Investors that wish to compare and evaluate our operating results after giving effect for these costs should refer to net income as disclosed in our consolidated statements of comprehensive income. Since adjusted EBITDA is a Non-GAAP financial performance measure, our calculation of adjusted EBITDA may be susceptible to varying calculations; may not be comparable to other similarly titled measures of other companies and should not be considered in isolation, as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. The reconciliation of net income (loss) to adjusted EBITDA is calculated as follows:
For the Years Ended December 31,
2025 2024
Net income (loss):
$ 805 $ (2,075)
Add back items excluded from Adjusted EBITDA:
Legal settlements and reserves 30 3
Former Parent operating costs - 15
Impairment, restructuring and other costs
436 3,453
Share-based payment expense (1)
181 200
Depreciation and amortization 547 578
Interest expense 459 496
Gain on extinguishment of debt
- (12)
Other income, net
(44) (136)
Income tax expense 251 210
Adjusted EBITDA $ 2,665 $ 2,732
(1)Allocation of share-based payment expense:
For the Years Ended December 31,
2025 2024
Programming and content $ 37 $ 36
Customer service and billing 5 5
Transmission 6 5
Sales and marketing 46 45
Product and technology
34 44
General and administrative 53 65
Total share-based payment expense $ 181 $ 200
Free cash flow - is derived from cash flow provided by operating activities, net of additions to property and equipment and purchases of other investments. Free cash flow is a metric that our management and board of directors use to evaluate the cash generated by our operations, net of capital expenditures and other investment activity. In a capital intensive business, with significant investments in satellites, we look at our operating cash flow, net of these investing cash outflows, to determine cash available for future subscriber acquisition and capital expenditures, to repurchase or retire debt, to acquire other companies and to evaluate our ability to return capital to stockholders. We exclude from free cash flow certain items that do not relate to the on-going performance of our business, such as cash flows related to acquisitions, strategic and short-term investments, including tax efficient investments in clean energy as well as net loan activity with related parties and other equity investees. We believe free cash flow is an indicator of the long-term financial stability of our business. Free cash flow, which is reconciled to "Net cash provided by operating activities", is a Non-GAAP financial measure. This measure can be calculated by deducting amounts under the captions "Additions to property and equipment" and deducting or adding Restricted and other investment activity from "Net cash provided by operating activities" from the consolidated statements of cash flows. Free cash flow should be used in conjunction with other GAAP financial performance measures and may not be comparable to free cash flow measures presented by other companies. Free cash flow should be viewed as a supplemental measure rather than an alternative measure of cash flows from operating activities, as determined in accordance with GAAP. Free cash flow is limited and does not represent remaining cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt maturities. We believe free cash flow provides useful supplemental information to investors regarding our current cash flow, along with other GAAP measures (such as cash flows from operating and investing activities), to determine our financial condition and to compare our operating performance to other communications, entertainment and media companies. Free cash flow is calculated as follows:
For the Years Ended December 31,
2025 2024
Cash Flow information
Net cash provided by operating activities $ 1,898 $ 1,741
Net cash used in investing activities (747) (970)
Net cash used in financing activities (1,219) (916)
Free Cash Flow
Net cash provided by operating activities 1,898 1,741
Additions to property and equipment (653) (728)
Sales of other investments
11 2
Free cash flow
$ 1,256 $ 1,015
ARPU- SiriusXM ARPU is derived from total earned subscriber revenue (excluding revenue associated with our connected vehicle services) and advertising revenue, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period.
Subscriber acquisition cost, per installation- or SAC, per installation, is derived from subscriber acquisition costs less margins from the sale of radios and accessories (excluding connected vehicle services), divided by the number of satellite radio installations in new vehicles and shipments of aftermarket radios for the period. SAC, per installation, is calculated as follows:
For the Years Ended December 31,
2025 2024
Subscriber acquisition costs, excluding connected vehicle services $ 414 $ 369
Less: margin from sales of radios and accessories, excluding connected vehicle services (169) (172)
$ 245 $ 197
Installations (in thousands) 13,452 13,545
SAC, per installation(a)
$ 18.21 $ 14.55
(a)Amounts may not recalculate due to rounding.
Ad supported listener hours- is based on the total bytes served over our Pandora advertising supported platforms for each track that is requested and served from our Pandora servers, as measured by our internal analytics systems, whether or not a listener listens to the entire track. For non-music content such as podcasts, episodes are divided into approximately track-length parts, which are treated as tracks. To the extent that third-party measurements of advertising hours are not calculated using a similar server-based approach, the third-party measurements may differ from our measurements.
RPM -is calculated by dividing advertising revenue, excluding AdsWizz and other off-platform revenue, by the number of thousands of listener hours on our Pandora advertising-based service.
Sirius XM Holdings Inc. published this content on February 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 05, 2026 at 14:40 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]