Sirius XM Holdings Inc. is positioning a new advertising arrangement with YouTube and a shift toward share buybacks as the next phase of a strategy refocused at the end of 2024, Chief Financial Officer Zac Coughlin said at an investor event. In the first half, revenue rose 1%, EBITDA increased 5% and free cash flow jumped 67%, results Coughlin described as largely structural rather than timing-related. The YouTube arrangement, structured similarly to an advertising-representation deal, will expand SiriusXM Media's reach to roughly 255 million Americans, or 90% of the listening population age 13 and older, with the companies spending roughly the first half of next year ramping up and more material output expected in the second half; Sirius XM does not expect substantial incremental investment and said the arrangement should be meaningfully profitable, though below podcasting margins and within the range of its owned-and-operated advertising platform. Advertising revenue rose 5% in the second quarter, led by podcasting and programmatic, and Coughlin said growth rates should moderate in the second half on tougher comparisons. On capital allocation, Coughlin said Sirius XM has reached its long-term leverage target range but remains near the high end of its low-to-mid-three-times objective, and expects to move toward the middle of that range through the rest of 2026; beginning in early 2027, share repurchases are likely to take priority over dividend increases, with the current dividend considered sufficient. He also cited the company's 35 megahertz of contiguous mid-band spectrum as medium- to longer-term optionality, and said the SiriusXM with 360L platform is installed in more than half of newly purchased vehicles and represents more than 20% of the total subscriber base.
Sirius XM Holding IncCFO said share repurchases will take priority over dividend increases beginning early 2027 after reaching leverage target.
