Sirius XM Radio Inc.

Overview Key strengths Key risks Large subscriber base is supported by the company's position as the only satellite radio operator in the U.S. Shareholder friendly activities are likely to keep leverage in the mid-3x area. 77% of revenue comes from relatively stable subscription revenue. Growth is somewhat dependent on U.S. automotive sales and consumer discretionary spending. Solid free operating cash flow (FOCF) generation of about $1 billion in 2023. Changes in media consumption could increase competition. We expect Sirius XM's operating and financial performance will be relatively stable in 2023, despite our expectation for a shallow U.S. recession in the first half of 2023 and for U.S. auto sales to remain sluggish until the end of the year. This is

... cash flow. We expect Sirius XM's operating and financial performance will be relatively stable in 2023, despite our expectation for a shallow U.S. recession in the first half of 2023 and for U.S. auto sales to remain sluggish until the end of the year. This is largely because Sirius XM generates 77% of its revenue from recurring subscription fees (with the remainder mostly coming from advertising). We view subscription revenue more favorably than volatile advertising revenue, which is cyclical (since expectations for consumer spending drive advertising budgets). Sirius XM's subscriber base also tends to...

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