What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-05 compared with 2025-01-30 · 183 added, 200 removed, 362 unchanged (51% of the section changed)

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Sirius XM Holdings Inc., the reporting company under this Annual Report on Form 10-K, is the product of a series of transactions that closed on Monday, September 9, 2024.

On September 9, 2024 at 4:05 p.m., New York City time, Liberty Media Corporation (“Liberty Media” or “Former Parent”) completed its previously announced split-off (the “Split-Off”) of its former wholly owned subsidiary, Liberty Sirius XM Holdings Inc.

The Split-Off was accomplished by Liberty Media redeeming each outstanding share of Liberty Media’s Series A, Series B and Series C Liberty SiriusXM common stock, par value $0.01 per share, in exchange for 0.8375 of a share of SplitCo common stock, par value $0.001 per share (the “Redemption”), with cash being paid to entitled record holders of Liberty SiriusXM common stock in lieu of any fractional shares of common stock of SplitCo.

Following the Split-Off, on September 9, 2024 at 6:00 p.m., New York City time (the “Merger Effective Time”), a wholly owned subsidiary of SplitCo merged with and into Sirius XM Holdings Inc.

(“Old Sirius”), with Old Sirius surviving the merger as a wholly owned subsidiary of New Sirius (the “Merger” and together with the Split-Off, the “Transactions”).

Upon consummation of the Merger, each share of common stock of Old Sirius, par value $0.001 per share, issued and outstanding immediately prior to the Merger Effective Time (other than shares owned by New Sirius and its subsidiaries) was converted into one-tenth (0.1) of a share of SplitCo common stock, with cash being paid to entitled record holders of Old Sirius common stock in lieu of any fractional shares of common stock of SplitCo.

At the Merger Effective Time, Old Sirius was renamed “Sirius XM Inc.” and SplitCo was renamed “Sirius XM Holdings Inc.” In connection with the Transactions and by operation of Rule 12g-3(a) promulgated under the Exchange Act, SplitCo became the successor issuer to Old Sirius and succeeded to the attributes of Old Sirius as the registrant, including Old Sirius's Commission File Number and CIK number.

The Transactions are intended to generally be tax-free to holders of Liberty SiriusXM common stock and Sirius XM Holdings common stock (except with respect to any cash received by such holders) and the completion of the Transactions was subject to various conditions, including the receipt of opinions of tax counsel.

Any references to the “Company,” “we,” “us,” or “ours” refers to Sirius XM Holdings Inc.

and its consolidated subsidiaries following the Transactions.

We operate two complementary audio entertainment businesses - one of which it refers to as “SiriusXM” and the second of which it refers to as “Pandora and Off-platform”.

The Split-Off was accomplished by Liberty Media redeeming each outstanding share of Liberty Media’s Series A, Series B and Series C Liberty SiriusXM common stock (“Liberty SiriusXM common stock”), par value $0.01 per share, in exchange for 0.8375 of a share of SplitCo common stock, par value $0.001 per share (the “Redemption”), with cash being paid to entitled record holders of Liberty SiriusXM common stock in lieu of any fractional shares of common stock of SplitCo.

Following the Split-Off, on September 9, 2024 at 6:00 p.m., New York City time (the “Merger Effective Time”), a wholly owned subsidiary of SplitCo merged with and into Sirius XM Holdings Inc.

(“Old Sirius”), with Old Sirius surviving the merger as a wholly owned subsidiary of SplitCo (the “Merger” and together with the Split-Off, the “Transactions”).

Upon consummation of the Merger, each share of common stock of Old Sirius, par value $0.001 per share, issued and outstanding immediately prior to the Merger Effective Time (other than shares owned by SplitCo and its subsidiaries) was converted into one-tenth (0.1) of a share of SplitCo common stock, with cash being paid to entitled record holders of Old Sirius common stock in lieu of any fractional shares of common stock of SplitCo.

At the Merger Effective Time, Old Sirius was renamed “Sirius XM Inc.” and SplitCo was renamed “Sirius XM Holdings Inc.” In connection with the Transactions and by operation of Rule 12g-3(a) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), SplitCo became the successor issuer to Old Sirius and succeeded to the attributes of Old Sirius as the registrant, including Old Sirius's Commission File Number and CIK number.

Upon completion of the Transactions, Liberty Media ceased to own any shares of Sirius XM Holdings Inc.

On September 6, 2024, Sirius XM Radio LLC, our wholly owned subsidiary, converted from a Delaware corporation to a Delaware limited liability company.

We operate two complementary audio entertainment businesses - our SiriusXM business and our Pandora and Off-platform business.

Our SiriusXM business features a wide range of content, including, music, sports, entertainment, comedy, talk and news channels, podcasts and infotainment services, all available in the United States on a subscription fee basis.

SiriusXM's content bundles include live, curated and certain exclusive and on demand programming.

The SiriusXM service is distributed through our two proprietary satellite radio systems and streamed via applications for mobile devices, home devices and other consumer electronic equipment.

Satellite radios are primarily distributed through automakers, retailers and SiriusXM’s website.

Additionally, our user interface, “360L,” integrates satellite and streaming services into a seamless in-vehicle entertainment experience.

The primary source of revenue from the SiriusXM business is subscription fees, with most of its customers subscribing to monthly or annual plans.

Additional revenue streams include advertising on select non-music channels, direct sales of radios and accessories, and other ancillary services.

As of December 31, 2024, the SiriusXM business had approximately 33.2 million subscribers.

In addition to the audio entertainment businesses, we provide connected vehicle services to several automakers.

These services are designed to enhance the safety, security and driving experience of consumers.

We also offers a suite of data services that includes graphical weather and fuel prices, a traffic information service, and real-time weather services in boats and airplanes.

Sirius XM holds a 70% equity interest and 33% voting interest in Sirius XM Canada Holdings Inc.

SiriusXM holds a 70% equity interest and 33% voting interest in Sirius XM Canada Holdings Inc.

( “ Sirius XM Canada ” ).

The primary source of revenue from the SiriusXM business is subscription fees, with most of its customers subscribing to monthly or annual plans.

Additional revenue streams include advertising on select music and non-music channels in certain packages, direct sales of radios and accessories, and other ancillary services.

As of December 31, 2025, the SiriusXM business had approximately 32.9 million subscribers in the U.S., while Sirius XM Canada had approximately 2.4 million subscribers.

Sirius XM Canada's subscribers are not included in our subscriber count or subscriber-based operating metrics.

In addition to our audio entertainment businesses, we provide connected vehicle services to several automakers.

These services are designed to enhance the safety, security and driving experience of consumers.

We also offer a suite of data services that includes graphical weather and fuel prices, a traffic information service and real-time weather services in boats and airplanes.

Pandora and Off-platform

Our Pandora and Off-platform business operates a music, comedy and podcast streaming platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through mobile devices, car speakers or connected devices.

Pandora enables listeners to create personalized stations and playlists, discover new content, hear artist- and expert-curated playlists, podcasts as well as search and play songs and albums on-demand.

Pandora is available as (1) an ad-supported radio service, (2) a radio subscription service (Pandora Plus) and (3) an on-demand subscription service (Pandora Premium).

As of December 31, 2024, Pandora had approximately 43.3 million monthly active users and 5.8 million subscribers.

Pandora offers a highly personalized audio entertainment platform allowing users to create customized stations and playlists while also enabling on-demand search and playback of songs and albums.

The Pandora service leverages advanced content programming algorithms, listener data, and music attributes to predict user music preferences, play content suited to the tastes of each listener, and introduce each listener to music consistent with the consumer's preferences.

The Pandora service is available as (1) an ad-supported radio service, (2) a radio subscription service (Pandora Plus) and (3) an on-demand subscription service (Pandora Premium).

The majority of revenue from Pandora is generated from advertising on Pandora's ad-supported radio service.

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Our Pandora and Off-platform business also sells advertising on other audio platforms and in widely distributed podcasts, which we consider to be off-platform services.

Sirius XM also sells advertising on other audio platforms and in widely distributed podcasts, which it considers to be off-platform services.

Sirius XM has an arrangement with SoundCloud Holdings, LLC ( “ SoundCloud ” ) to be its exclusive ad sales representative in the US and certain European countries and offer advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms.

As of December 31, 2025, Pandora had approximately 41.1 million monthly active users and 5.6 million subscribers.

SiriusXM also sells advertising on other audio platforms and in widely-distributed podcasts, which it considers to be off-platform services.

SiriusXM has an arrangement with SoundCloud Holdings, LLC ( “ SoundCloud ” ) to be its exclusive ad sales representative in the U.S.

and certain European countries and offer advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms.

It also has arrangements to serve as the ad sales representative for certain podcasts.

In addition, through AdsWizz Inc., Sirius XM provides a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.

In addition, through AdsWizz Inc., SiriusXM provides a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.

The information contained in this Annual Report on Form 10-K represents a combination of the historical information of SplitCo (now renamed Sirius XM Holdings Inc.) prior to the Merger Effective Time and Old Sirius.

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Set forth below are our results of operations for the year ended December 31, 2025 compared with the year ended December 31, 2024.

Refer to Amendment No.

1 to our Registration Statement on Form S-4 filed with the SEC on March 20, 2024 for our results of operations for the year ended December 31, 2023 compared with the year ended December 31, 2022.

Refer to our Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on January 30, 2025 for our results of operation for the year ended December 31, 2024 compared with the year ended December 31, 2023.

The results of operations are presented for each of our reporting segments for revenue and cost of services and on a consolidated basis for all other items.

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Other revenue 122 128 (6) (5) %

Total Sirius XM revenue 6,553 6,840 (287) (4) %

Total SiriusXM revenue

6,417 6,553 (136) (2) %

Pandora and Off-platform:

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Cost of equipment 9 10 (1) (10) %

Total Sirius XM cost of services 2,684 2,730 (46) (2) %

Total SiriusXM cost of services

2,643 2,684 (41) (2) %

Pandora and Off-platform:

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Total operating expenses 7,087 10,216 (3,129) (31) %

(Loss) income from operations

(1,517) 1,808 (3,325) (184) %

Income (loss) from operations 1,471 (1,517) 2,988 nm

Other income (expense), net

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Gain on extinguishment of debt

Other income (expense), net 136 (64) 200 nm

Other income (expense), net 44 136 (92) (68) %

Total other expense (415) (348) (67) (19) %

(Loss) income before income taxes

(1,865) 1,210 (3,075) nm

Income (loss) before income taxes 1,056 (1,865) 2,921 nm

Income tax expense (251) (210) (41) (20) %

Net (loss) income

$ (2,075) $ 988 $ (3,063) nm

Net income (loss) $ 805 $ (2,075) $ 2,880 139 %

nm - not meaningful

Sirius XM Revenue

Sirius XM Subscriber Revenue includes fees charged for self-pay and paid promotional subscriptions, U.S.

SiriusXM Revenue

SiriusXM Subscriber Revenue includes fees charged for self-pay and paid promotional subscriptions, U.S.

Music Royalty Fees and other ancillary fees.

For the years ended December 31, 2025 and 2024, subscriber revenue was $5,960 and $6,076, respectively, a decrease of 2%, or $116.

The decrease was primarily attributed to a reduction in self-pay revenue resulting from a decline in the average number of subscribers as well as lower Average Revenue Per User ("ARPU").

The lower ARPU was driven by an increase in subscribers on self-pay promotional and streaming-only subscription plans, alongside a reduction in automaker paid promotional trials which reduced paid promotional revenue.

We anticipate a decline in subscriber revenues driven by a reduction in the average number of subscribers and a decrease in the average price of our subscriptions.

Sirius XM Advertising Revenue includes the sale of advertising on Sirius XM’s non-music channels.

The decrease was primarily attributed to a reduction in self-pay revenue resulting from a decline in the average number of subscribers and an increase in self-pay subscribers on promotional plans, partially offset by rate increases on certain self-pay plans.

We expect SiriusXM subscriber revenues to remain relatively flat with higher average revenue per user (“ARPU”) offset by declines in the number of average subscribers.

SiriusXM Advertising Revenue includes the sale of advertising on SiriusXM’s non-music channels and select music channels within ad-supported plans.

For the years ended December 31, 2025 and 2024, advertising revenue was $157 and $167, respectively, a decrease of 6%, or $10.

This decline was primarily due to lower revenue from entertainment channels, which was partially offset by higher revenue earned on news channels.

We expect our Sirius XM advertising revenue to grow as we continue to promote our brand and leverage co-selling initiatives across our brands and platforms.

Sirius XM Equipment Revenue includes revenue and royalties from the sale of satellite radios, components and accessories.

The decrease was primarily due to lower advertising demand for news and sports channels.

We expect our SiriusXM advertising revenue to grow as we continue to leverage co-selling initiatives across our brands and platforms.

SiriusXM Equipment Revenue includes revenue and royalties from the sale of satellite radios, components and accessories.

For the years ended December 31, 2025 and 2024, equipment revenue was $178 and $182, respectively, a decrease of 2%, or $4.

The decrease was driven by a transition to higher cost next generation chipsets, partially offset by increased chipset production.

We expect equipment revenue to remain flat as higher costs associated with the transition to our next generation chipset are projected to offset the benefits of increased production.

Sirius XM Other Revenue includes service and advisory revenue from Sirius XM Canada, revenue from our connected vehicle services, and ancillary revenues.

The decrease was driven by the transition to higher cost next generation chipsets as well as lower chipset production.

We expect equipment revenue to decline due to higher costs associated with the transition to our next generation chipset.

SiriusXM Other Revenue includes service fee revenue from Sirius XM Canada, revenue from our connected vehicle services and ancillary revenues.

For the years ended December 31, 2025 and 2024, other revenue was $122 and $128, respectively, a decrease of 5%, or $6.

The decrease was driven by lower royalty revenue from Sirius XM Canada.

The decrease was driven by lower revenue from our connected vehicle services as well as lower royalty revenue from Sirius XM Canada.

We expect other revenue to remain relatively flat.

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Pandora and Off-platform Subscriber Revenue includes fees charged for Pandora Plus and Pandora Premium.

For the years ended December 31, 2024 and 2023, Pandora and Off-platform subscriber revenue was $540 and $524, respectively, an increase of 3%, or $16.

The growth was primarily driven by rate increases on Pandora subscription plans, partially offset by a decline in the subscriber base.

We expect Pandora and Off-platform subscriber revenues to decrease due to a decline in the subscriber base.

For the years ended December 31, 2025 and 2024, Pandora and Off-platform subscriber revenue was $526 and $540, respectively, a decrease of 3%, or $14.

The decrease was driven by a decline in the subscriber base, partially offset by the full-year impact of prior year price increases on Pandora subscription plans.

We anticipate Pandora and Off-platform subscriber revenues to remain relatively flat.

Pandora and Off-platform Advertising Revenue is generated primarily from audio, display and video advertising from on-platform and off-platform advertising.

For the years ended December 31, 2025 and 2024, Pandora and Off-platform advertising revenue was $1,615 and $1,606, respectively, an increase of 1%, or $9.

The growth was primarily driven by higher podcasting revenue and increased technology fees, partially offset by reduced streaming demand due to increased competition.

We expect Pandora and Off-platform advertising revenue to increase due to growth in off-platform monetization, including through podcasts, as well as higher technology fees.

The increase was driven by revenue generated from podcasts, programmatic and higher technology fees;

partially offset by reduced advertiser demand in streaming music.

We expect Pandora and Off-platform advertising revenue to slightly increase due to growth in off-platform monetization, including through podcasts, as well as higher technology fees.

Total Revenue

Total Revenue for the years ended December 31, 2025 and 2024 was $8,558 and $8,699, respectively, a decrease of 2%, or $141.

Sirius XM Cost of Services

Sirius XM Cost of Services includes revenue share and royalties, programming and content, customer service and billing, and transmission expenses.

Sirius XM Revenue Share and Royalties include royalties for transmitting content, including streaming royalties, as well as revenue share agreements with automaker, content provider and advertisers.

For the years ended December 31, 2024 and 2023, revenue share and royalties were $1,565 and $1,603, respectively, a decrease of 2%, or $38, but increased as a percentage of total Sirius XM revenue.

The decrease was driven by lower subscription revenue, partially offset by higher web streaming royalty rates.

We expect our Sirius XM revenue share and royalty costs to remain flat as a percentage of revenue but to decrease overall.

We project lower eligible subscription revenue, partially offset by higher royalty rates under the statutory webcasting license due to increases in the Consumer Price Index.

Sirius XM Programming and Content includes costs to acquire, create, promote and produce content.

SiriusXM Cost of Services

SiriusXM Cost of Services includes revenue share and royalties, programming and content, customer service and billing, transmission and equipment expenses.

SiriusXM Revenue Share and Royalties include royalties for transmitting content, including streaming royalties, as well as revenue share agreements with automakers, content providers and advertisers.

For the years ended December 31, 2025 and 2024, revenue share and royalties were $1,542 and $1,565, respectively, a decrease of 1%, or $23, but increased as a percentage of total SiriusXM revenue.

The decrease was driven by lower subscription revenue, partially offset by higher webcasting royalties.

We expect our SiriusXM revenue share and royalty costs to remain flat as a percentage of total SiriusXM revenue.

SiriusXM Programming and Content includes costs to acquire, create, promote and produce content.

We have entered into agreements with third parties for music and non-music programming that require us to pay license fees and other amounts.

For the years ended December 31, 2024 and 2023, programming and content expenses were $550 and $549, respectively, an increase of less than 1%, or $1, and increased as a percentage of total Sirius XM revenue.

The rise in costs was driven by higher personnel-related costs, which were offset by lower production costs.

We expect our Sirius XM programming and content expenses to remain relatively flat.

Sirius XM Customer Service and Billing includes costs related to the operation and management of internal and third-party customer service centers, our subscriber management systems, billing and collection processes, bad debt expense, and transaction fees.

For the years ended December 31, 2024 and 2023, customer service and billing expenses were $369 and $393, respectively, a decrease of 6%, or $24, and decreased as a percentage of total Sirius XM revenue.

The reduction was primarily driven by lower call center costs, transaction and payment processing fees, bad debt expense, and personnel-related costs.

We expect our Sirius XM customer service and billing expenses to increase as a result of higher subscriber management system transition costs, partially offset by a reduction in call center and personnel-related costs.

Sirius XM Transmission consists of costs associated with the operation and maintenance of our terrestrial repeater networks;

For the years ended December 31, 2025 and 2024, programming and content expenses were $555 and $550, respectively, an increase of 1%, or $5, and increased as a percentage of total SiriusXM revenue.

The increase was driven by higher personnel-related costs.

We expect our SiriusXM programming and content expenses to decline due to lower costs to obtain certain content.

SiriusXM Customer Service and Billing includes costs related to the operation and management of internal and third-party customer service centers, our subscriber management systems, billing and collection processes, bad debt expense, and transaction fees.

For the years ended December 31, 2025 and 2024, customer service and billing expenses were $375 and $369, respectively, an increase of 2%, or $6, and increased as a percentage of total SiriusXM revenue.

The increase was driven by higher subscriber management system and transaction costs, partially offset by lower call center costs and bad debt expense.

We expect our SiriusXM customer service and billing expenses to decrease as a result of reductions in call center and personnel-related costs, partially offset by higher costs associated with subscriber management systems and transaction costs.

SiriusXM Transmission consists of costs associated with the operation and maintenance of our terrestrial repeater networks;

satellite telemetry, tracking and control systems;

satellite uplink facilities;

and delivery of our Internet and 360L streaming and connected vehicle services.

For the years ended December 31, 2024 and 2023, transmission expenses were $190 and $171, respectively, an increase of 11%, or $19, and increased as a percentage of total Sirius XM revenue.

The increase was driven primarily by higher hosting costs associated with our streaming platform as well as increased consulting costs.

We expect our Sirius XM transmission expenses to decrease due to ongoing cost optimization efforts.

Sirius XM Cost of Equipment includes costs from the sale of satellite radios, components and accessories and provisions for inventory allowance attributable to products purchased for resale in our direct to consumer distribution channels.

For the years ended December 31, 2024 and 2023, cost of equipment was $10 and $14, respectively, a decrease of 29%, or $4, and decreased as a percentage of total Sirius XM revenue.

The decline was driven by fewer sales of satellite radios and related components as well as lower shipping costs.

We expect our Sirius XM cost of equipment to remain relatively flat.

studios and delivery of our Internet and 360L streaming and connected vehicle services.

For the years ended December 31, 2025 and 2024, transmission expenses were $162 and $190, respectively, a decrease of 15%, or $28, and decreased as a percentage of total SiriusXM revenue.

The decrease was driven primarily by lower hosting costs associated with our streaming platform.

We expect our SiriusXM transmission expenses to remain relatively flat.

SiriusXM Cost of Equipment includes costs from the sale of satellite radios, components and accessories and provisions for inventory allowance attributable to products purchased for resale in our direct to consumer distribution channels.

For the years ended December 31, 2025 and 2024, cost of equipment was $9 and $10, respectively, a decrease of 10%, or $1, and decreased as a percentage of total SiriusXM revenue.

The decrease was driven by lower inventory reserves.

We expect our SiriusXM cost of equipment to decrease due to lower sales volumes.

Pandora and Off-platform Cost of Services

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Payments are made based on advertising impressions delivered or click-through actions, and these costs are recorded in the related period.

For the years ended December 31, 2024 and 2023, revenue share and royalties were $1,270 and $1,292, respectively, a decrease of 2%, or $22, and decreased as a percentage of total Pandora and Off-platform revenue.

The decrease was primarily due to lower on-platform revenue, reduced listener hours, and decreased revenue share related to podcasts.

We expect our Pandora and Off-platform revenue share and royalties to increase with the growth in our podcast revenue and higher royalty rates, including as a result of increases in the Consumer Price Index.

For the years ended December 31, 2025 and 2024, revenue share and royalties were $1,308 and $1,270, respectively, an increase of 3%, or $38, and increased as a percentage of total Pandora and Off-platform revenue.

The increase was driven by podcast revenue share, partially offset by a decline in the subscriber base.

We expect our Pandora and Off-platform revenue share and royalties to increase with the growth in our podcast revenue.

Pandora and Off-platform Programming and Content includes costs to produce owned and operated podcasts, live listener events and promote content.

For the years ended December 31, 2024 and 2023, programming and content expenses were $61 and $69, respectively, a decrease of 12%, or $8, and decreased as a percentage of total Pandora and Off-platform revenue.

The decrease was primarily attributable to lower personnel-related costs, license fees, and event costs.

We expect our Pandora and Off-platform programming and content costs to remain relatively flat as increased podcast and event production costs are offset by lower personnel-related expenses.

For each of the years ended December 31, 2025 and 2024, programming and content expenses were $64 and $61, respectively, an increase of 5%, or $3, and increased as a percentage of total Pandora and Off-platform revenue.

The increase was primarily attributable to higher podcast programming costs.

We expect our Pandora and Off-platform programming and content costs to remain relatively flat.

Pandora and Off-platform Customer Service and Billing includes transaction fees on subscription purchases through mobile app stores and bad debt expense.

For the years ended December 31, 2025 and 2024, customer service and billing expenses were $74 and $79, respectively, a decrease of 6%, or $5, and decreased as a percentage of total Pandora and Off-platform revenue.

The decrease was driven by lower bad debt expenses.

The decrease was primarily driven by lower transaction fees.

We expect our Pandora and Off-platform customer service and billing costs to remain relatively flat.

Pandora and Off-platform Transmission includes costs associated with content streaming, maintaining our streaming radio and on-demand subscription services and creating and serving advertisements through third-party ad servers.

For each of the years ended December 31, 2024 and 2023, Pandora and Off-Platform transmission expenses were $35, remaining unchanged in absolute terms but decreased as a percentage of total Pandora and Off-platform revenue.

The flat expense level reflects higher bandwidth costs which were offset by lower personnel-related costs.

We expect our Pandora and Off-platform transmission costs to increase due to higher hosting costs associated with increased AdsWizz platform fee revenue, partially offset by lower personnel-related costs.

For the years ended December 31, 2025 and 2024, Pandora and Off-Platform transmission expenses were $29 and $35, respectively, a decrease of 17%, or $6, and decreased as a percentage of total Pandora and Off-platform revenue.

The decrease was driven by lower bandwidth costs.

We expect our Pandora and Off-platform transmission costs to decrease due to cost optimization efforts.

Operating Costs

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device royalties for certain radios and chipsets;

product warranty obligations;

product warranty obligations and freight.

The majority of subscriber acquisition costs are incurred and expensed in advance of acquiring a subscriber.

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For the years ended December 31, 2025 and 2024, subscriber acquisition costs were $414 and $369, respectively, an increase of 12%, or $45, and increased as a percentage of total revenue.

The increase was driven by contractual changes with certain automakers, partially offset by lower hardware subsidies from installations and reduced commission and hardware subsidy rates.

We expect subscriber acquisition costs to rise due to increased penetration with certain automakers and higher subsidies and other incentives offered to induce automakers to include our latest technology in their vehicles.

The increase was primarily driven by contractual changes with certain automakers and higher costs related to migrating to the wideband chipset.

We expect subscriber acquisition costs to stay relatively flat.

Sales and Marketing includes costs for marketing, advertising, media and production, including promotional events and sponsorships;

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For the years ended December 31, 2025 and 2024, sales and marketing expenses were $760 and $894, respectively, a decrease of 15%, or $134, and decreased as a percentage of total revenue.

The decrease was primarily due to lower streaming and in-car marketing as well as personnel-related costs.

We expect sales and marketing expenses to continue to decline as we optimize costs across all marketing activities.

Product and Technology consists primarily of compensation and related costs to develop chipsets and new products and services, including streaming and connected vehicle services, research and development for broadcast information systems and the design and development costs to incorporate Sirius XM radios into new vehicles manufactured by automakers.

The decrease was primarily due to lower streaming marketing spend.

We expect sales and marketing expenses to increase due to an increase in our brand and other marketing costs.

Product and Technology consists primarily of compensation and related costs to develop chipsets and new products and services, including streaming and connected vehicle services, research and development for broadcast information systems and the design and development costs to incorporate SiriusXM radios into new vehicles manufactured by automakers.

For the years ended December 31, 2025 and 2024, product and technology expenses were $263 and $296, respectively, a decrease of 11%, or $33, and decreased as a percentage of total revenue.

The decrease was primarily driven by higher capitalized personnel-related costs, which were partially offset by increased cloud hosting costs.

We anticipate product and technology expenses to decline as we optimize our technology spend.

The decrease was primarily driven by lower personnel-related and hosting costs.

We anticipate product and technology expenses will remain relatively flat as we optimize our technology spend.

General and Administrative primarily consists of compensation and related costs for personnel and facilities, and includes costs related to our finance, legal, human resources and information technology departments.

For the years ended December 31, 2024 and 2023, general and administrative expenses were $497 and $608, respectively, a decrease of 18%, or $111, and decreased as a percentage of total revenue.

The decrease was primarily driven by lower legal costs resulting from litigation insurance recoveries and reduced legal reserves, including amounts associated with settlement of certain litigation matters of $24 during the twelve months ended December 31, 2023, as well as lower Former Parent operating costs.

We expect our general and administrative expenses, excluding litigation insurance recoveries, to remain relatively flat.

Higher technology and consulting costs are expected to be offset by lower personnel-related costs and the absence of Former Parent operating costs going forward.

For the years ended December 31, 2025 and 2024, general and administrative expenses were $549 and $497, respectively, an increase of 10%, or $52, and increased as a percentage of total revenue.

The increase was driven by higher legal costs, including amounts associated with a settlement reserve for certain litigation matters of $29 which is expected to be paid in 2026, higher personnel-related costs and lower insurance recoveries;

partially offset by the elimination of Former Parent operating costs, legal settlement income recognized during 2025, and certain state tax litigation recoveries recorded.

We expect our general and administrative expenses, excluding the impact of any past or future litigation insurance recoveries and settlement reserves, to decline due to lower technology and rent costs.

Depreciation and Amortization reflects the allocation of the costs of assets used in operations such as our satellite constellations, property, equipment and intangible assets over their estimated service lives.

For the years ended December 31, 2025 and 2024, depreciation and amortization expense was $547 and $578, respectively.

The decrease was primarily due to the retirement of a satellite during the twelve months ended December 31, 2023 and certain assets that reached the end of their useful lives, partially offset by the write-down of certain property and equipment recorded in the Transactions and an increase in capitalized software and hardware.

Impairment, Restructuring and Other Costs represents impairment charges, associated with the carrying amount of an asset exceeding the asset's fair value, restructuring expenses associated with the abandonment of certain leased office spaces as well as employee severance charges and other charges associated with organizational changes, and costs associated with the Transactions.

The decrease was primarily associated with certain assets that reached the end of their useful lives.

Impairment, Restructuring and Other Costs represents impairment charges associated with the carrying amount of an asset exceeding the asset's fair value, restructuring expenses associated with contract terminations, the abandonment of certain leased office spaces as well as employee severance charges and other charges associated with organizational changes in connection with the Transactions.

For the years ended December 31, 2025 and 2024, impairment, restructuring and other costs were $436 and $3,453, respectively.

During the twelve months ended December 31, 2024, we recorded impairment charges of $3,355 primarily related to an impairment of Goodwill and equity method investments, costs associated with the Transactions of $71, and a charge of $27 associated with severance and other restructuring costs.

During the years ended December 31, 2023, we recorded a charge of $34 primarily related to severance and other related costs, costs associated with the Transactions of $26, impairments primarily related to terminated software projects of $15, vacated office space impairments of $12, accrued expenses of $3 for which we will not recognize any future economic benefit, and a cost-method investment impairment of $2.

During the year ended December 31, 2025, we recorded charges of $296 associated with restructuring charges, a charge of $109 associated with impairments related to terminated software projects, severance and other employee costs of $23 and Transaction related costs of $8.

During the year ended December 31, 2024, we recorded impairment charges of $3,355 primarily related to impairments of Goodwill and equity method investments, Transactions related costs of $71, and a charge of $27 associated with severance and other restructuring costs.

Other (Expense) Income

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For the years ended December 31, 2025 and 2024, interest expense was $459 and $496, respectively.

The decrease was driven by a lower average outstanding debt balance and increased capitalized interest.

Gain on Extinguishment of Debt includes gains incurred as a result of the redemption of certain debt.

The $12 gain on extinguishment of debt during the year ended December 31, 2024 was due to the repurchase or redemption of the 2.75% exchangeable senior debentures due 2049.

Other Income (Expense), Net primarily includes realized and unrealized gains and losses from our debt measured at fair value, bond hedges, Deferred Compensation Plan and other investments, intergroup interests, interest and dividend income, our share of the income or loss from equity investments, and transaction costs related to non-operating investments.

For the years ended December 31, 2024 and 2023, other income (expense), net was $136 and $(64), respectively.

During the twelve months ended December 31, 2024, we recorded unrealized gains on debt measured at fair value, earnings on unconsolidated entity investments, and trading gains associated with the investments held for our Deferred Compensation Plan.

During the twelve months ended December 31, 2023, we recorded losses associated with bond hedges, partially offset by gains associated with the fair value of intergroup interests, earnings on unconsolidated entity investments, and trading gains from the investments held for our Deferred Compensation Plan.

The decrease was primarily driven by a lower average outstanding debt balance.

Other Income, Net primarily includes realized and unrealized gains and losses from our debt measured at fair value, bond hedges, our Deferred Compensation Plan and other investments, intergroup interests, interest and dividend income, our share of the income or loss from equity investments and transaction costs related to non-operating investments.

For the years ended December 31, 2025 and 2024, other income, net was $44 and $136, respectively.

During the year ended December 31, 2025, we recorded unrealized gains on debt measured at fair value, trading gains associated with the investments held for our Deferred Compensation Plan and earnings on unconsolidated entity investments.

During the year ended December 31, 2024, we recorded unrealized gains on debt measured at fair value, earnings on unconsolidated entity investments and trading gains associated with the investments held for our Deferred Compensation Plan.

Income Tax Expense includes the change in our deferred tax assets, current federal and state tax expenses and foreign withholding taxes.

For the years ended December 31, 2025 and 2024, income tax expense was $251 and $210, respectively.

Our effective tax rate for the years ended December 31, 2024 and 2023 was (11.3)% and 18.3%, respectively.

The effective tax rate for the year ended December 31, 2024 was primarily driven by federal and state income tax expense, offset by the nondeductible impairment of Goodwill recorded during the year.

The effective tax rate for the year ended December 31, 2023 was primarily driven by federal and state income tax expense, partially offset by the benefits related to research and development and certain other credits, as well as a release in state valuation allowance.

Our effective tax rate of 23.8% for the year ended December 31, 2025 was primarily driven by state and local taxes and tax losses related to share-based compensation, partially offset by certain credits.

Our effective tax rate of (11.3)% for the year

ended December 31, 2024, was primarily driven by federal and state income tax expense, offset by the nondeductible impairment of goodwill.

Key Financial and Operating Performance Metrics

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Please refer to the Glossary for a further discussion of such Non-GAAP financial and operating performance measures and reconciliations to the most directly comparable GAAP measure (where applicable).

Subscribers and subscription related revenues and expenses associated with our connected vehicle services and Sirius XM Canada are not included in Sirius XM's subscriber count or subscriber-based operating metrics.

Subscribers and subscription related revenues and expenses associated with our connected vehicle services and Sirius XM Canada are not included in SiriusXM’s subscriber count or subscriber-based operating metrics.

Subscribers to the Cloud Cover music programming service are now included in Pandora's subscriber count.

Set forth below are our subscriber balances as of December 31, 2025 compared to December 31, 2024.

Refer to our Form 10-K for the year ended December 31, 2024 filed with the SEC on January 30, 2025 for our Non-GAAP financial and operating performance measures for the year ended December 31, 2024 compared with the year ended December 31, 2023.

As of December 31, 2025 vs 2024 Change

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5,630 5,774 (144) (2) %

(1) Pandora and Off-platform self-pay subscribers include Cloud Cover subscribers of 57 and 45 as of December 31, 2024 and 2023, respectively.

The following table contains our Non-GAAP financial and operating performance measures which are based on our adjusted results of operations for the years ended December 31, 2025 and 2024.

Refer to Amendment No.

1 to our Registration Statement on Form S-4 filed with the SEC on March 20, 2024 for our Non-GAAP financial and operating performance measures for the year ended December 31, 2023 compared with the year ended December 31, 2022.

For the Years Ended December 31, 2025 vs 2024 Change

Twelve Months

(subscribers in thousands) 2025 2024 Amount %

Self-pay subscribers (301) (296) (5) (2) %

Paid promotional subscribers (353) 15 (368) nm

Paid promotional subscribers 2 (353) 355 101 %

Net additions (299) (649) 350 54 %

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Pandora and Off-platform

Self-pay subscribers (2)

(279) (199) (80) (40) %

Net additions (279) (199) (80) (40) %

Weighted average number of subscribers 5,698 5,929 (231) (4) %

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Free cash flow $ 1,256 $ 1,015 $ 241 24 %

nm - not meaningful

(1) ARPU for Sirius XM excludes subscriber revenue from our connected vehicle services of $164 and $161 for the years ended December 31, 2024 and 2023, respectively.

(2) Pandora and Off-platform self-pay subscriber net additions include Cloud Cover net additions of 12 and 8 for the years ended December 31, 2024 and 2023, respectively.

At December 31, 2024, Sirius XM had approximately 33,226 subscribers, a decrease of 649, from the approximately 33,875 subscribers as of December 31, 2023.

Our self-pay subscriber base declined due to lower vehicle conversion rates, partially offset by higher trial volume and reductions in voluntary and non-pay churn.

We also saw a decrease in paid promotional subscribers as we transitioned some automakers from paid promotional subscriptions to unpaid or to shorter term promotional plans.

For the years ended December 31, 2024 and 2023, net subscriber additions were (649) and (430), respectively, a decrease of 219.

Paid promotional net additions decreased compared to the prior year period as certain automakers transitioned from paid promotional subscriptions to unpaid.

Self-pay net additions improved compared to the prior year primarily due to lower churn and higher trial volumes, partially offset by lower conversion rates.

(1) ARPU for SiriusXM excludes subscriber revenue from our connected vehicle services of $169 and $164 for the years ended December 31, 2025 and 2024, respectively.

At December 31, 2025, SiriusXM had 32,927 subscribers, a decrease of 299, from the 33,226 subscribers as of December 31, 2024.

Our subscriber base declined primarily due to lower self-pay subscribers attributable to lower vehicle conversion rates, partially offset by reductions in voluntary and non-pay churn as well as growth in new acquisition initiatives.

For the years ended December 31, 2025 and 2024, net subscriber additions were (299) and (649), respectively, an improvement of 350.

Self-pay net additions decreased primarily due to lower streaming net additions and conversion rates, partially offset by lower churn, growth in new acquisition initiatives as well as the implementation in the fourth quarter of continuous service practices for subscribers and the offer of companion subscriptions to subscribers.

Paid promotional net additions also improved compared to the prior year periods driven by higher vehicle sales.

Sirius XM Canada Subscribers.

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(See accompanying Glossary for more details.)

For each of the years ended December 31, 2024 and 2023, our average self-pay monthly churn rate was 1.6%.

ARPU is derived from total earned Sirius XM subscriber revenue (excluding revenue derived from our connected vehicle services) and net advertising revenue, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period.

For the years ended December 31, 2025 and 2024, our average self-pay monthly churn rate was 1.5% and 1.6%, respectively.

The decrease was driven by lower vehicle and non-pay churn.

ARPU is derived from total earned SiriusXM subscriber revenue (excluding revenue derived from our connected vehicle services) and net advertising revenue, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period.

(See the accompanying Glossary for more details.)

For the years ended December 31, 2025 and 2024, ARPU was $15.11 and $15.21, respectively.

The decrease was driven by an increase in self-pay subscribers on promotional and streaming-only self-pay subscription plans, partially offset by rate increases on certain self-pay subscription plans during 2023 which had a full-year impact in the current year.

The decrease was driven by an increase in self-pay subscribers on promotional plans, partially offset by rate increases on certain self-pay plans.

SAC, Per Installation, is derived from subscriber acquisition costs and margins from the sale of radios, components and accessories (excluding connected vehicle services), divided by the number of satellite radio installations in new vehicles and shipments of aftermarket radios for the period.

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For the years ended December 31, 2025 and 2024, SAC, per installation, was $18.21 and $14.55, respectively.

The increase was driven by a transition to higher cost chipsets, partially offset by a change in the mix of automakers including satellite radios in their vehicles.

The increase was driven by a transition to higher cost chipsets as well as contractual changes with certain automakers.

Pandora and Off-platform

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At December 31, 2025, Pandora had approximately 41,112 monthly active users, a decrease of 2,232 monthly active users, or 5%, from the 43,344 monthly active users as of December 31, 2024.

The decrease in monthly active users was driven by higher churn and a decline in the number of new users.

The decrease in monthly active users was driven by churn and a decline in the number of new users.

At December 31, 2025, Pandora had approximately 5,630 subscribers, a decrease of 144, or 2%, from the approximately 5,774 subscribers as of December 31, 2024.

For the years ended December 31, 2024 and 2023, net subscriber additions were (279) and (199), respectively.

The decrease in ending subscribers was driven by decreases in trial starts and lower retention due to price increases.

Ad supported listener hours are a key indicator of our Pandora business and the engagement of our Pandora listeners.

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For the years ended December 31, 2025 and 2024, ad supported listener hours were 9,751 and 9,940, respectively, a decrease of 2%, or 189.

The decrease in ad supported listener hours were primarily driven by the decline in monthly active users.

The decrease was primarily driven by the decline in monthly active users, partially offset by higher hours per active user.

RPM is a key indicator of our ability to monetize advertising inventory created by listener hours on the Pandora services.

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For the years ended December 31, 2025 and 2024, RPM was $91.78 and $100.59, respectively.

The increase was driven by growth in advertising spots sold per listener hour.

The decrease was driven by lower advertiser demand in streaming music due to macroeconomic uncertainty.

Total Company

Adjusted EBITDA.

EBITDA is defined as net (loss) income before interest expense, income tax expense and depreciation and amortization.

Adjusted EBITDA excludes the impact of other expense (income), loss on extinguishment of debt, impairment, restructuring and other costs, Former Parent operating costs, other non-cash charges such as share-based payment expense, and legal settlements and reserves (if applicable).

EBITDA is defined as net income (loss) before interest expense, income tax expense and depreciation and amortization.

Adjusted EBITDA excludes the impact of other expense (income), loss on extinguishment of debt,

impairment, restructuring and other costs, Former Parent operating costs, other non-cash charges such as share-based payment expense, and legal settlements and reserves (if applicable).

(See the accompanying Glossary for a reconciliation to GAAP and for more details.)

For the years ended December 31, 2025 and 2024, adjusted EBITDA was $2,665 and $2,732, respectively, a decrease of 2%, or $67.

The decrease was driven by declines in subscriber revenue, partially offset by lower costs of services, personnel-related costs, sales and marketing and general and administrative expenses.

The decrease was driven by declines in subscriber revenue as well as increases in general and administrative expenses and subscriber acquisition costs;

partially offset by lower sales and marketing, product and technology, and transmission expenses.

Free Cash Flow includes cash provided by operations, net of additions to property and equipment, and restricted and other investment activity.

(See the accompanying Glossary for a reconciliation to GAAP and for more details.)

For the years ended December 31, 2024 and 2023, free cash flow was $1,015 and $1,182, respectively, a decrease of 14%, or $167.

The decrease was primarily driven by costs related to the Transactions, higher capital expenditures and cash taxes paid.

For the years ended December 31, 2025 and 2024, free cash flow was $1,256 and $1,015, respectively, an increase of 24%, or $241.

The increase was driven by the elimination of Liberty transaction costs, lower cash taxes paid and lower capital expenditures.

Liquidity and Capital Resources

The following table presents a summary of our cash flow activity for the year ended December 31, 2025 compared with the year ended December 31, 2024.

Refer to Amendment No.

1 to our Registration Statement on Form S-4 filed with the SEC on March 20, 2024 for our cash flows for the year ended December 31, 2023 compared with the year ended December 31, 2022.

Refer to our Form 10-K for the year ended December 31, 2024 filed with the SEC on January 30, 2025 for our cash flows for the year ended December 31, 2024 compared with the year ended December 31, 2023.

For the Years Ended December 31,

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Cash Flows Provided by Operating Activities

Cash flows provided by operating activities decreased by $88 to $1,741 for the year ended December 31, 2024 from $1,829 for the year ended December 31, 2023.

Cash flows provided by operating activities increased by $157 to $1,898 for the year ended December 31, 2025 from $1,741 for the year ended December 31, 2024.

Our largest source of cash provided by operating activities is cash generated by subscription and subscription-related revenues.

We also generate cash from the sale of advertising through the Pandora and Off-platform business, advertising on certain non-music channels on Sirius XM and the sale of satellite radios, components and accessories.

We also generate cash from the sale of advertising through the Pandora and Off-platform business, advertising on certain non-music and select music channels on SiriusXM and the sale of satellite radios, components and accessories.

Our primary uses of cash from operating activities include revenue share and royalty payments to distributors, programming and content providers and payments to radio manufacturers, distributors and automakers.

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Cash flows used in investing activities in the year ended December 31, 2025 were primarily due to spending for capitalized software and hardware, the construction of satellites and acquisitions of tax-effective investments for total cash consideration of $106.

Cash flows used in investing activities in the year ended December 31, 2023 were primarily due to spending for capitalized software and hardware, the construction of satellites and acquisitions of tax-effective equity investments for total cash consideration of $50.

Cash flows used in investing activities in the year ended December 31, 2024 were primarily due to spending for capitalized software and hardware, the construction of satellites and acquisitions of tax-effective investments for total cash consideration of $244.

We spent $389 and $413 on capitalized software and hardware as well as $204 and $262 to construct satellites during the years ended December 31, 2025 and 2024, respectively.

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Proceeds from long-term debt have been used to fund our operations, construct and launch new satellites, fund acquisitions, invest in other infrastructure improvements and purchase shares of our common stock.

Cash flows used in financing activities in the year ended December 31, 2024 were primarily due to the repayment of $3,914 of debt, partially offset by proceeds from debt borrowings of $3,205.

The remaining cash flows used in financing activities related to taxes paid from net share settlements for stock-based compensation and dividends paid.

Long-term debt proceeds and repayments are reported gross within the statement of cash flows and primarily relate to the Margin Loan and the Credit Facility.

Cash flows used in financing activities in the year ended December 31, 2023 were primarily due to the repayment of $3,782 of debt and the purchase and retirement of shares of Old Sirius’ common stock under its repurchase program of $274, partially offset by proceeds from debt borrowings of $2,681, and the settlement of intergroup interests of $273 and dividends paid.

Long-term debt proceeds and repayments are reported gross within the statement of cash flows and primarily relate to Pandora’s 1.75% Convertible Senior Notes due 2023, Liberty Media’s 1.375% Cash Convertible Senior Notes due 2023, the Convertible Notes, the Exchangeable Notes, the Margin Loan, and the Credit Facility (each as defined in Note 13 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K).

Cash flows used in financing activities in the year ended December 31, 2025 were primarily due to the repayment of $2,141 of debt, the payment of cash dividends of $365, the purchase and retirement of shares of our common stock under our

repurchase program of $136 and the payment of $33 for taxes in lieu of shares issued for share-based compensation, partially offset by proceeds from debt borrowings of $1,462.

Long-term debt proceeds and repayments are reported gross within the statement of cash flows and primarily relate to the Delayed Draw Incremental Term Loan and the Credit Facility.

Cash flows used in financing activities in the year ended December 31, 2024 were primarily due to the repayment of $3,914 of debt, the payment of cash dividends of $143 and the payment of $44 for taxes in lieu of shares issued for share-based compensation, partially offset by proceeds from debt borrowings of $3,205.

Long-term debt proceeds and repayments are reported gross within the statement of cash flows and primarily relate to the Convertible Notes, the Exchangeable Notes, that certain margin loan agreement (which is no longer outstanding) of Liberty Siri MarginCo, LLC which merged with and into SplitCo following the Transactions that was secured by shares of our common stock (the “Margin Loan”) and the Credit Facility (as defined in Note 12 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K).

Future Liquidity and Capital Resource Requirements

Based upon our current business plans, we expect to fund operating expenses, capital expenditures, including the construction of replacement satellites, working capital requirements, interest payments, taxes and scheduled maturities of our debt with existing cash, cash flow from operations and borrowings under the Credit Facility, including the Incremental Term Loan.

As of December 31, 2024, $1,750 was available for future borrowing under the Credit Facility and zero was available under the Incremental Term Loan.

We believe that we have sufficient cash and cash equivalents, as well as debt capacity, to cover our estimated short and long-term funding needs, including amounts to construct, launch and insure replacement satellites, as well as fund future stock repurchases and dividend payments and to pursue strategic opportunities.

As of December 31, 2025, $1,980 was available for future borrowing under the Credit Facility and no amount was available under the Delayed Draw Incremental Term Loan.

We believe that we have sufficient cash and cash equivalents, as well as debt capacity, to cover our estimated short and long-term funding needs, including upcoming maturities of debt, amounts to construct, launch and insure replacement satellites, as well as fund future stock repurchases and dividend payments and to pursue strategic opportunities.

Our ability to meet our debt and other obligations depends on our future operating performance and on economic, financial, competitive and other factors.

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significant new or enhanced distribution arrangements;

investments in infrastructure, such as satellites, equipment or radio spectrum;

and acquisitions and investments, including acquisitions and investments that are not directly related to our existing business.

investments in infrastructure, such as satellites, equipment or radio spectrum and acquisitions and investments, including acquisitions and investments that are not directly related to our existing business.

We may from time to time purchase our outstanding debt through open market purchases, privately negotiated transactions or otherwise.

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W e have made, and expect to continue to make, certain tax-efficient equity investments in clean energy technologies, including industrial carbon capture and storage.

These investments will produce tax credits and related tax losses.

These investments are expected to produce tax credits and related tax losses.

The payments on these equity investments will be classified as investing activities from a cash flow perspective, while the tax credits and losses will benefit our federal cash taxes in operating activities.

Stock Repurchase Program

Prior to the closing of the Transactions, the board of directors of Old Sirius had approved the repurchase of an aggregate of $18,000 of its common stock.

As of the closing of the Transactions, Old Sirius' cumulative repurchases since December 2012 under that stock repurchase program totaled 373 shares for $16,834, and $1,166 remained available under that stock repurchase program.

The stock repurchase program of Old Sirius was terminated on the closing date of the Transactions.

Following the closing of the Transactions, on September 9, 2024, our board of directors authorized for repurchase an aggregate of $1,166 of our common stock.

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Debt Covenants

The indentures governing Sirius XM's senior notes and the agreements governing the Sirius XM Credit Facility include restrictive covenants.

The indentures governing SiriusXM's senior notes and the credit agreement governing the Credit Facility and the Delayed Draw Incremental Term Loan include restrictive covenants.

The indentures governing the senior notes also contain covenants that, among other things, limit Sirius XM’s ability and the ability of its subsidiaries to create certain liens;

enter into sale/leaseback transactions;

and merge or consolidate.

and merge or consolidate or transfer, lease, assign or otherwise dispose of all or substantially all of Sirius XM Radio LLC’s assets.

As of December 31, 2025, we were in compliance with such covenants.

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Non-Financial Instrument Valuations.

Our non-financial instrument valuations are primarily comprised of our determination of the estimated fair value allocation of net tangible and identifiable intangible assets acquired in business combinations, our annual assessment of the recoverability of our goodwill and other nonamortizable intangibles, such as trademarks, and our evaluation of the recoverability of our other long-lived assets upon certain triggering events.

Our non-financial instrument valuations are primarily comprised of our determination of the estimated fair value allocation of net tangible and identifiable intangible assets acquired in business combinations, our annual assessment of the recoverability of our goodwill and other nonamortizable intangible assets, such as trademarks, and our evaluation of the recoverability of our other long-lived assets upon certain triggering events.

If the carrying value of our long-lived assets exceeds their estimated fair value, we are required to write the carrying value down to fair value.

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We may use quoted market prices, prices for similar assets, present value techniques and other valuation techniques to prepare these estimates.

We may need to make estimates of future cash flows and discount rates as well as other assumptions in order to implement these valuation

We may need to make estimates of future cash flows and discount rates as well as other assumptions in order to implement these valuation techniques.

Due to the degree of judgment involved in our estimation techniques, any value ultimately derived from our long-lived assets may differ from our estimate of fair value.

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Under the updated guidance per Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment , the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment is eliminated.

Simplifying the Test for Goodwill Impairment , the requirements for any reporting unit with a zero or negative carrying

amount to perform a qualitative assessment is eliminated.

In accordance with updated guidance, we recognize goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill.

In connection with the close of the Transactions, our market capitalization sustained a decrease during the third quarter of 2024 and we concluded that, in accordance with ASC 350, a triggering event occurred indicating that potential impairment existed, which required us to conduct an interim test of the fair value of the goodwill for the Sirius XM and Pandora and Off-platform reporting units.

The results of our goodwill impairment test indicated that the estimated fair value of the Pandora reporting unit exceeded its carrying amount, whereas the carrying amount of the Sirius XM reporting unit exceeded its estimated fair value.

As a result, we recorded a goodwill impairment charge of $2,819 to write down the carrying amount of the Sirius XM goodwill in the Impairment, restructuring and other costs line item in our audited consolidated statements of operations.

Fair value was determined using a combination of an income approach, using a discounted cash flow (“DCF”) model, and a market approach, employing a guideline public company approach.

The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test.

The accounting guidance also allows entities the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test.

The entity may resume performing the qualitative assessment in any subsequent period.

In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more likely than not that an indicated impairment exists for any of our reporting units.

We elected to perform a quantitative assessment of the goodwill in our Pandora and Off-platform reporting unit and performed a qualitative assessment of the goodwill in our SiriusXM reporting unit.

Fair value of our Pandora and Off-platform reporting unit was determined using a combination of an income approach, using a discounted cash flow (“DCF”) model, and a market approach, employing a guideline public company approach.

The DCF model, which estimates fair value based on the present value of future cash flows, requires us to make various assumptions regarding the timing and amount of these cash flows, including growth rates, operating margins and capital expenditures for a projection period, plus the terminal value of the business at the end of the projection period.

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A discount rate is determined for the reporting unit based on the risks of achieving the future cash flows, including risks applicable to the industry and market as a whole, as well as the capital structure of comparable entities.

Additionally, assumptions related to guideline company financial multiples used in the market approach based on current market observations.

Additionally, assumptions related to guideline company financial multiples used in the market approach are based on current market observations.

• Indefinite-lived Assets:

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If the carrying value of the intangible assets exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

As a result of the Sirius XM goodwill impairment discussed in Note 8, we evaluated our FCC licenses, Sirius XM trademark, and Pandora trademark for impairment using a quantitative assessment during the quarter ended December 31, 2024.

The results of the assessment indicated that the estimated fair values for these indefinite-lived assets exceeded their carrying values and no impairment loss was recognized for intangible assets with indefinite lives during the years ended December 31, 2024 and 2023.

Fair value was determined using a DCF model.

The DCF model included significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates.

Fair value of the Pandora trade name was determined using a DCF model.

The DCF model included significant assumptions about revenue growth rates, royalty rate, long-term growth rates and enterprise specific discount rates.

• Definite-lived Assets:

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We monitor our satellites for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset is not recoverable.

We operate two in-orbit Sirius satellites, FM-5 and FM-6, which launched in 2009 and 2013, respectively, and estimate they will operate effectively through the end of their depreciable lives in 2024 and 2028, respectively.

We currently operate four in-orbit XM satellites, XM-3, XM-5, SXM-8 and SXM-9.

Our XM-3 satellite was launched in 2005 and is used as an in-orbit spare and reached the end of its depreciable life in 2020.

Our XM-5 satellite was launched in 2010 and is expected to reach the end of its depreciable life in 2025.

We currently operate four in-orbit and two spare satellites, FM-5, FM-6, XM-5, SXM-8, SXM-9, and SXM-10.

Our FM-5 satellite was launched in 2009 and reached the end of its depreciable life in 2024.

Our FM-6 satellite was launched in 2013 and is expected to reach the end of its depreciable life in 2028.

Our XM-5 satellite was launched in 2010 and reached the end of its depreciable life in 2025.

Our SXM-8 satellite was launched in 2021 and is expected to reach the end of its depreciable life in 2036.

Our SXM-8 satellite replaced our XM-3 satellite.

On December 5, 2024, our SXM-9 satellite was successfully launched and has completed in-orbit testing.

Our SXM-9 satellite will replace our SXM-8 satellite in the XM constellation, with SXM-8 becoming an in-orbit spare.

We expect to place this satellite into service in the first quarter of 2025.

We have entered into agreements for the design, construction and launch of three additional satellites, SXM-10, SXM-11 and SXM-12.

Our SXM-8 satellite replaced our XM-3 satellite which was successfully deorbited in November 2025.

In January 2025, our SXM-9 satellite successfully completed in-orbit testing and replaced our SXM-8 satellite which now operates as an in-orbit spare.

In July 2025, our SXM-10 satellite successfully completed its in-orbit testing and replaced our FM-6 satellite which now operates as an in-orbit spare.

We have entered into agreements for the design, construction and launch of two additional satellites, SXM-11 and SXM-12, which are expected to replace our XM-5 and Sirius FM-5 satellites.

Our satellites have been designed to last fifteen years.

Our in-orbit satellites may experience component failures which could adversely affect their useful lives.

We monitor the operating condition of our in-orbit satellites and if events or circumstances indicate that the depreciable lives of our in-orbit satellites have changed, we will modify the depreciable life accordingly.

We monitor the operating condition of our in-orbit satellites and if events or

circumstances indicate that the depreciable lives of our in-orbit satellites have changed, we will modify the depreciable life accordingly.

If we were to revise our estimates, our depreciation expense would change.

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Self-pay subscriber - a self-pay subscriber is a user that, as of the date of determination, was party to a customer agreement with SiriusXM or Pandora, and (i) has paid or agreed to pay a subscription fee, including at a promotional price, or (ii) the subscription fee has been paid by an automaker for a period of three years or greater.

For subscription plans that entitle the customer to multiple registered users, each registered user under such plan is counted as a self-pay subscriber.

Lifetime subscribers to the SiriusXM service are counted as self-pay subscribers because they are party to a customer agreement with SiriusXM and have paid a subscription fee, although in almost all cases the revenue from such subscriptions have been fully recognized in prior periods.

Certain users that are party to a customer agreement with Sirius XM or Pandora and have paid or agreed to pay a small promotional price for a trial subscription are not counted as self-pay subscribers because the promotional price is considered to be de minimis and, in management's view, the payment is not indicative of the user's intent to subscribe to the service in the near-term.

Our new continuous service practices allow for subscribers to keep their subscription active even when it is not linked to a vehicle.

Certain users that are party to a customer agreement with SiriusXM or Pandora and have paid or agreed to pay a small promotional price for a trial subscription are not counted as self-pay subscribers because the promotional price is considered to be de minimis and, in management's view, the payment is not indicative of the user’s intent to subscribe to the service in the near-term.

Paid promotional subscriber - a paid promotional subscriber is a user that, as of the date of determination, has their subscription fee paid for by a third party, for a fixed trial subscription period, which typically range from one to twelve months but is less than three years.

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To become a registered user on the Pandora services, a person must sign-up using an email address or access our service using a device with a unique identifier, which we use to create an account for our service.

Average self-pay monthly churn - for in-car and retail radio subscriptions, the Sirius XM monthly average of self-pay deactivations for the period divided by the average number of self-pay subscribers for the period.

Adjusted EBITDA - EBITDA is defined as net (loss) income before interest expense, income tax expense and depreciation and amortization.

Adjusted EBITDA is a Non-GAAP financial measure that excludes or adjusts for the impact of other expense (income), gain on extinguishment of debt, impairment, restructuring and other costs, Former Parent operating costs, other non-cash charges such as share-based payment expense, and legal settlements and reserves (if applicable).

Average self-pay monthly churn - for in-car and retail radio subscriptions, the SiriusXM monthly average of self-pay deactivations for the period divided by the average number of self-pay subscribers for the period.

Adjusted EBITDA - EBITDA is defined as net income (loss) before interest expense, income tax expense and depreciation and amortization.

Adjusted EBITDA is a Non-GAAP financial measure that excludes or adjusts for the impact of other expense (income), gain/loss on extinguishment of debt, impairment, restructuring and other costs, Former Parent operating costs, other non-cash charges such as share-based payment expense and legal settlements and reserves (if applicable).

We believe adjusted EBITDA is a useful measure of the underlying trend of our operating performance, which provides useful information about our business apart from the costs associated with our capital structure and purchase price accounting.

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Since adjusted EBITDA is a Non-GAAP financial performance measure, our calculation of adjusted EBITDA may be susceptible to varying calculations;

may not be comparable to other similarly titled measures of other companies;

and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP.

The reconciliation of net (loss) income to the adjusted EBITDA is calculated as follows:

may not be comparable to other similarly titled measures of other companies and should not be considered in isolation, as a substitute for or superior to measures of financial performance prepared in accordance with GAAP.

The reconciliation of net income (loss) to adjusted EBITDA is calculated as follows:

For the Years Ended December 31,

Net (loss) income:

Net income (loss):

$ 805 $ (2,075)

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Gain on extinguishment of debt

Other (income) expense, net

Other income, net

Income tax expense 251 210

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$ 1,256 $ 1,015

(1) Compared to Old Sirius’ free cash flow, the cash flow for Sirius XM Holdings is impacted by the additional interest payments related to Liberty Media’s debt attributed to SplitCo as well as corporate costs.

ARPU - Sirius XM ARPU is derived from total earned subscriber revenue (excluding revenue associated with our connected vehicle services) and advertising revenue, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period.

ARPU - SiriusXM ARPU is derived from total earned subscriber revenue (excluding revenue associated with our connected vehicle services) and advertising revenue, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period.

Subscriber acquisition cost, per installation - or SAC, per installation, is derived from subscriber acquisition costs less margins from the sale of radios and accessories (excluding connected vehicle services), divided by the number of satellite radio installations in new vehicles and shipments of aftermarket radios for the period.

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis