SiriusXM CFO Sees Room To 'Meaningfully Accelerate' 2027 Buybacks, With $1 Billion Of Authorization Left
CFO Zach Coughlin said the dividend stays and leverage targets hold, as 2027 free cash flow is pegged at $1.5 billion.
SiriusXM Chief Financial Officer Zach Coughlin said on the company's Thursday third-quarter earnings call that he sees potential to "meaningfully accelerate share repurchases in 2027," with about $1 billion left on its buyback authorization. He said the company's current share price "represents a compelling investment opportunity."
Buybacks rise, dividend stays
SiriusXM, which runs the SiriusXM satellite radio service and the ad-supported Pandora streaming service, returned $124 million to shareholders through dividends and buybacks in the quarter. It also cut total debt by $100 million, Coughlin said.
Asked by a Goldman Sachs analyst how fast repurchases could grow, Coughlin said the company remains committed to the dividend but can increasingly direct capital toward buybacks. He said he expects those to point toward "meaningful increases compared to what we've done over the last couple of years," with timing and pace staying opportunistic.
Net leverage ended the quarter at 3.3 times adjusted EBITDA, inside the company's unchanged target of low to mid three times. Coughlin called reaching that range last quarter "an important milestone" that gives more flexibility to deploy cash.
The free cash flow behind it
Free cash flow rose 14% to $293 million in the quarter. For the first nine months it reached about $1.1 billion, up 48% from a year earlier. Coughlin said the company planned for different seasonality, so that percentage will not carry through the full year.
SiriusXM raised each of its three 2026 targets by $25 million, to about $8.55 billion of revenue, $2.65 billion of adjusted EBITDA and $1.4 billion of free cash flow. Coughlin said he has "really strong confidence" in delivering $1.5 billion of free cash flow next year.
Quarter and fourth-quarter outlook
Revenue was about $2.2 billion, essentially flat from a year earlier. Adjusted EBITDA rose 3% to $694 million, with margin up one percentage point to 32%, and net income climbed 7% to $317 million.
Self-pay subscribers grew by 5,000 in the quarter, and CEO Jennifer Witz said full-year self-pay net additions are now expected to be roughly flat with 2025. She warned of a tougher fourth quarter. Coughlin pointed to growing equipment-revenue pressure from memory chip costs and extra marketing spending as shaping the implied fourth-quarter outlook.
Coughlin said SiriusXM expects $1.4 billion of free cash flow in 2026 and is aiming for $1.5 billion in 2027, the cash base for the larger buybacks he described.
Sources
- SiriusXM lifts full-year forecasts as Q3 revenue misses estimates (SIRI:NASDAQ) | Seeking Alpha — seekingalpha.com
- Sirius XM: Q3 Earnings Snapshot – WTOP News — wtop.com
- Sirius XM Holdings Inc. GAAP EPS of $0.78 misses by $0.01, revenue of $2.15B misses by $10M (SIRI:NASDAQ) | Seeking Alpha — seekingalpha.com
- SiriusXM Holdings Inc. (SIRI) Stock Forecasts — Yahoo Finance
