What Are Sirius XM’s Key Sources of Revenue?

SiriusXM’s (NASDAQ: SIRI) revenue has gradually increased over the years, primarily due to growth in its subscriber base and average revenue per user (ARPU). Sirius reported better-than-expected growth in its subscriber, beating its 2017 subscriber guidance. The key sources of revenues are Subscriber, Advertising, Equipment, and Other.

Subscriber revenue accounts for close to 82% of the company’s overall revenues. Revenue from this segment rose to $4.47 billion (+ 7% y-o-y) in 2017, primarily driven by an increase in the number of subscribers and ARPU. Despite the expected slowdown in the auto industry, we expect SiriusXM to increase its penetration in the new car and used car market. Further, the company expects to add 1 million self-pay subscribers in 2018. However, given the ease with which it beat its previous subscriber guidance, we expect Sirius to beat its initial subscriber guidance, as long as the auto market and economy remain relatively stable. Looking at 2018, we estimate the company’s Subscriber revenue to grow by around 2.5% and earnings of just over 19 cents per share.

We have created an interactive dashboard that shows Sirius’ key revenue sources and the expected 2018 performance. You can adjust the revenues and multiple to see the impact on earnings.

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