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Sirius XM (NASDAQ:SIRI) just took an 8.6% hit at 1pm today, after CFO Tom Barry waved a red flag at Deutsche Bank's media conference. He pointed to a recent pullback in ad spending, specifically in consumer packaged goods and retail, with softness spreading into other sectors. Right now, we're a little concerned, Barry admitted, signaling potential trouble ahead for the company's ad sales. Given that advertising brought in $1.8 billion last yearroughly 20% of SiriusXM's revenuethis dip isn't just a blip. It's a warning sign.
The company is already in cost-cutting mode, rolling out another round of layoffs, primarily in product and tech. No headcount numbers were disclosed, but it follows the 100 job cuts from January, reinforcing that SiriusXM is still in restructuring mode post-spinoff from Liberty Media. Meanwhile, subscriber numbers aren't looking great either. Despite 33 million paying customers, the company lost a net 296,000 subscribers in 2024. And that $9.99/month streaming app they pushed? That initiative quietly took a backseat after failing to gain traction.
With everything in flux, SiriusXM just brought in Scott Walker as its new chief advertising revenue officer, stepping in for John Trimble, who's exiting after 16 years. Walker's got his work cut out for himad sales are shaky, and SiriusXM is pivoting back to its in-car audience instead of chasing streaming dreams. The question now is whether he can stabilize the ad business and find new growth levers before the market loses patience.
This article first appeared on GuruFocus.