What To Expect From Sirius XM’s Q2 Earnings

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SiriusXM (NASDAQ: SIRI) is set to announce its second quarter results on Wednesday, July 25. We expect SiriusXM to report another quarter of revenue growth driven by solid growth in its subscriber base, backed by high penetration in the new car market and increasing penetration in the used car space. We have created an interactive dashboard that illustrates our expectations for the company’s second quarter. You can modify the average revenue per user (ARPU), Daily Weighted Average Subscribers, and other forecasts to see how changes would impact the company’s results.

Subscriber Growth To Drive Top Line

Subscriber revenue contributes nearly 82% of Sirius’s overall revenue, and this revenue grew 4% in the first quarter of 2018, primarily driven by an increase in the daily weighted average number of subscribers and ARPU.

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SiriusXM’s robust net subscriber growth is expected to drive the company’s Q2 revenues. SiriusXM’s offering of differentiated content, coupled with the robust growth of streaming services, should boost its subscriber base. In addition, the company is also experimenting with the launch of video services, which should further boost its subscriber base and provides a significant long-term growth opportunity. We will be interested to hear if the company’s management boosts its full year outlook.

SiriusXM Grows Steadily In The New And Used Car Market

The rebound in the auto industry sparked stronger-than-expected new car sales in Q1’18, which helped Sirius’ penetration in the new and used car market. SiriusXM steadily increased its penetration in the new car market and reported it to be around 76%, while used car penetration stood at 37%. Further, the auto industry rallied on after a minor blip in April. Strong new car sales in May and June, coupled with renewals of multi-year OEM deals, should help SiriusXM increase its penetration in the new car space. In addition, SiriusXM has been concentrating on increasing its penetration rate in the used car market as well.

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