Pandora loses 2.75 million monthly users as SiriusXM raises 2026 guidance

Pandora's reach keeps shrinking

Pandora ended September with 38.81 million monthly active users, down 6.6% from 41.56 million a year earlier, a loss of 2.75 million listeners in twelve months [1].

Fewer listeners mean fewer ad slots on Pandora's free tier. SiriusXM is trying to fill the gap with podcasting, programmatic sales and inventory from its YouTube Audio partnership, and it has not said how much that partnership earns [1][2]. The paying base moved the same way: self-pay subscribers across Pandora Plus and Pandora Premium totaled 5.51 million, down 177,000 year on year [1]. Ad-supported listener hours fell 10% to 2.25 billion [1].

Revenue at the Pandora and Off-platform segment still edged up, to $549 million from $548 million [1]. That unit also carries podcast advertising and the AdsWizz ad-tech business [1]. The music service is shrinking. The segment wrapped around it is not.

Subscriber revenue inside the segment fell 2% to $130 million [1]. SiriusXM blamed having fewer subscribers [1].

Ad sales stay flat as listening moves

Consolidated advertising revenue was $456 million, against $455 million a year earlier [2]. That is flat, in a quarter when podcast advertising rose 20%, slower than the 30% it posted in the second quarter [2]. Inside the Pandora and Off-platform segment, advertising revenue grew 1% to $419 million [1]. SiriusXM credited podcasting, programmatic sales and technology fees, and said lower music streaming ad sales on Pandora partly offset the gains as listening hours declined [1].

Podcast growth is slowing at the same time Pandora's hours fall [2].

The quarter behind the Pandora numbers

Consolidated revenue slipped to $2.153 billion from $2.159 billion [1][2]. The dip came mainly from hardware. Equipment revenue fell to $36 million from $43 million, which the company attributed to higher memory costs in the modules it supplies for satellite radios [2]. Profit went the other way. Net income rose 7% to $317 million from $297 million [2]. Adjusted EBITDA, the measure SiriusXM uses to set operating goals and employee incentives, rose 3% to $694 million and the margin reached 32.2%, up from 31.3% [2]. Free cash flow rose 14% to $293 million from $257 million, helped by lower interest expense and reduced capital spending [2]. Lower programming and sales and marketing costs, along with automation, supported the margin gain [6].

Diluted earnings per share fell 7% to $0.78 from $0.84 [2]. The gap is an accounting effect tied to convertible notes, while basic earnings per share rose to $0.94 from $0.88 [2].

Subscribers, royalties and the raised outlook

The satellite service itself steadied. SiriusXM added about 5,000 self-pay subscribers, against a net loss of 40,000 a year earlier [1][6]. It ended September with 32.85 million total subscribers, of which 31.26 million were self-pay, and ARPU was $15.18 against $15.19 [1]. Royalty costs rose. Revenue share and royalty costs increased $5 million to $726 million, equal to 33.7% of total revenue, up from 33.4% a year earlier, by Music Business Worldwide's calculation [1]. The SiriusXM segment accounted for $392 million of that, up 2%, while Pandora and Off-platform accounted for $334 million, down 1% [1].

SiriusXM raised full-year 2026 guidance for the second consecutive quarter, lifting revenue, adjusted EBITDA and free cash flow forecasts by $25 million each [2]. It now expects revenue of about $8.55 billion, adjusted EBITDA of about $2.65 billion and free cash flow of about $1.40 billion [2][6][13]. Seeking Alpha reported that revenue and EBITDA forecasts remain below consensus [6]. Shares fell about 3% in premarket trading on 29 October [6].

SiriusXM could step up share buybacks in 2027, its CFO said [1][6]. Zac Coughlin pointed to a more efficient operating model and declining satellite capital spending [1][6].

What management signaled next

The 10-Q filed on 29 October carries the legal side. The Mechanical Licensing Collective sued Pandora in February 2024, alleging that Pandora underpaid mechanical royalties on its free, ad-supported tier, which the collective argues is an interactive service, and that Pandora should pay additional mechanical royalties for Pandora Plus [1]. The court denied both sides' cross-motions for summary judgment on 30 September and has not scheduled a new trial date [1]. The MLC asked the court on 14 October to reconsider that order and grant it summary judgment, or let both sides file new, shorter motions, or certify the order for an immediate appeal [1]. Pandora opposed being granted summary judgment outright in a response filed on 28 October, but did not oppose reconsideration provided the court also revisits its rejection of Pandora's own motion [1]. The filing also includes updates on a second dispute with BMI, which filed a rate court action against SiriusXM in September 2024 [1].