SIRI 10-K & 10-Q changes, risk factors and insider trading

We face substantial competitioncompetition, and that competition has increased over time.

Our SiriusXM service has suffered a loss of subscriberssubscribers, and our Pandora ad-supported service has similarly experienced a loss of monthly active users.

Our ability to increase the number of subscribers and listeners to our services, retain our subscribers and listeners and convert listeners into subscribers,subscribers is uncertain and subject to many factors, including:

•vendors that have designeddesigned, built or built,launched, and vendors that support or operate, other important elements of our systems, including our satellites, marketing platforms, billing and payment processing, and the cloud-based systems we use;

We cannot predict how successful we will be at retaining customers who purchase or lease vehicles that include a subscription to our SiriusXM service. A substantial percentage of our SiriusXM subscribers are on promotional pricing plansplans, and our ability to retain these subscribers is uncertain. Historically, we have been unsuccessful in migrating a large portion of subscribers on promotional pricing plans to higher priced plans. Our promotional pricing strategy is widely known, which interferes with our ability to collect our ordinary subscription prices. In addition, a substantial number of those subscribers periodically cancel their subscriptions when offered a subscription at a higher price.

A number of factors may affect our ability to attract and retain subscribers to our Sirius XMSiriusXM service. The changing demographics of trialers to our service, such as the increase in “Millennial generation customers,” may increase the number of subscribers accustomed to consuming entertainment through ad-supported products. These changing demographics have affected and may continue to affect our ability to convert trial subscribers into self-paying subscribers. Similarly, our efforts to acquire subscribers purchasing or leasing pre-owned vehicles may attract price sensitiveprice-sensitive consumers. Consumers purchasing or leasing pre-owned vehicles may be more price sensitive than consumers purchasing or leasing new vehicles, convert from trial subscribers to self-paying subscribers at a lower rate, or cancel their subscriptions more frequently than consumers purchasing or leasing new vehicles. Some of our marketing efforts may also attract more price sensitiveprice-sensitive subscribers, and our efforts to increase the penetration of satellite radios in new, lower-priced vehicle lines may result in the growth of more economy-minded subscribers. Each of these factors may harm our revenue or require additional spending on marketing efforts to demonstrate the value of our SiriusXM service.

We have agreements with major automakers to include satellite radios in new vehicles, although these agreements do not require automakers to install specific or minimum quantities of radios in any given period. Many of these agreements also require automakers to provide us data on sales of satellite radio enabledradio-enabled vehicles, including in many cases the consumer’s name and address. Our business could be adversely affected if a number of automakers do not continue to include our SiriusXM service in their products or provide us with such data.

Automotive production and sales are dependent on many factors, including labor relations matters, the availability of vehicle components, national trade policies,policies including tariffs and other trade barriers, consumer credit, general economic conditions, consumer confidence and fuel costs. Significant tariffs on imports from many countries including China, European Union countries, Japan, Canada and Mexico, could have a major impact on the price of auto parts, semi-finished products, components and raw materials and finished vehicles, resulting in declines of vehicle sales by automakers. To the extent vehicle sales by automakers decline, or the penetration of factory-installed satellite radios in those vehicles is reduced, our satellite radio service may be adversely impacted.

Sales of pre-owned vehicles represent a significant source of new subscribers for our satellite radio service. We have agreements with auto dealers, companies operating in the pre-owned vehicle market and other third parties to provide us with data on sales of pre-owned satellite radio enabledradio-enabled vehicles, including in many cases the consumer’s name and address. The continuing availability of this data is important, and the loss or additional restrictions on our use of such data may harm our revenue and business.

In the ordinary course of operation, satellites experience failures of component parts and operational and performance anomalies. Components on several of our in-orbit satellites have failed, and from time to time we have experienced anomalies in the operation and performance of these satellites. These failures and anomalies are expected to continue in the ordinary course, and we cannot predict if any of these possible future events will have a material adverse effect on our operations or the life of our existing in-orbit satellites. In addition, we have entered into agreements for the construction and launch of threetwo new satellites that are expected to be launched over the next threetwo years, and material delays in the deployment of these satellites could be harmful to our business.

Any material failure of our operating satellites could cause us to lose customers for our SiriusXM service and could materially harm our reputation and our operating results. We do not have insurance for many of our in-orbit satellites. Additional information regarding our fleet of satellites is contained in the section entitled “Item 1. Business - Satellites, Terrestrial Repeaters and OtherOur Satellite FacilitiesRadio Systems” of this Annual Report on Form 10-K.

If we are unable to maintain our advertising revenuerevenue, our results of operations will be adversely affected.

We receive a substantial amount of personal data from third parties on purchasers and lessees of new and pre-owned vehicles and from and about listeners to our services. We use this personal data to market our services and to enhance our advertising business. Regulations and obligations on third party data providers may restrict or reduce the third party data we receive or in the manner in which we use such third party data. We collect and use demographic, service usage, purchase history and other information from and about our listeners through interactions with our products and services and content over the internet. Further, we and third parties use tracking technologies, including “cookies” and related technologies, to help us manage and track our listeners’ interactions with our services and deliver relevant advertising.

In November 2024, a New York Court found that our cancellation practices violated the “simple mechanism requirement” for subscription cancellations in the federal Restore Online Shoppers’ Confidence Act (“ROSCA”).Act. As a result of the Court’s findings, we now permit New York residents who purchase a subscription online to also cancel that subscription online, a cancellation mechanism that we believe is at least as easy to use as the method the consumer used to initiate the subscription. The Federal Trade Commission has issued proposed rules that are scheduled to go into effect on May 15, 2025 that will require us on a nationwide basis to permit a purchaser of a subscription online to also cancel that subscription online. In addition, other governmental authorities have commenced investigations into our consumer practices, including the manner in which we allow consumers to cancel subscriptions to our services.

Modifications to consumer protection laws, including laws regarding the manner in which consumers can cancel our services as well as decisions by courts and administrative agencies interpreting these laws, could have an adverse impact on our ability to attract and retain subscribers and listeners to our services. There can be no assurance that new laws or regulations will not be enacted or adopted, preexistingpre-existing laws or regulations will not be more strictly enforced or that our operations will comply with all applicable laws, which could have an adverse impact on our operations and financial condition.

Environmental,Increasing socialinterest and governanceexpectations expectationsregarding sustainable business practices by our various stakeholders and related reporting obligations may expose us to potential liabilities, increased costs, reputational harm,harm and other adverse effects.

ManyIn recent years, there has been heightened interest from governments, regulators, investors, employees, customers and other stakeholders are focused on environmental,sustainability social and governancematters (orsometimes called “ESG” matters) considerations,, including climate change and greenhouse gas emissions; human capital management, including diversity, equity and inclusionmanagement; cybersecurity; content moderation; diversity and inclusion; and human and civil rights. Our reporting and disclosures in response to these expectations may require additional investments and reporting processes, introduce additional compliance risk, and depend in part on third-party performance or data that is outside our control. Related initiatives, and implementation of these initiatives, also involve risks and uncertainties, and we cannot guarantee that we will make progress against or achieve any sustainability-related objectives that we have announced environmental,or socialmay announce in the future. Furthermore, more recently different stakeholder groups and governancethe objectives.federal government have advocated divergent (or conflicting) views on ESG matters, which increases the risk that any action, or lack thereof, with respect to ESG matters will be perceived unfavorably by certain stakeholders. In addition, somea stakeholdersgrowing maynumber disagreeof withU.S. states have enacted or proposed “anti-ESG” or “anti-diversity, equity, and inclusion” policies, legislation, initiatives or issued related legal opinions, and have engaged in related litigation regarding ESG matters. Such outcomes could negatively impact our initiativesbusiness, financial condition, results of operations, and objectives.cash flows. Any failure, or perceived failure, to further our initiatives, adhere to public statements, comply with federal or state ESGsustainability laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and adversely affect our business, reputation, financial condition, and operations results.

If we fail to protect the security of personal information about our customers or if an actual or perceived breach of security occurs on our systems or a vendor’s systems, we could be exposed to costly government enforcement actions and private litigation and our reputation could suffer. We may also be required to expend significant resources to address these problems, including notification under various data privacy regulations, and our reputation and operating results could suffer. In addition, our subscribers and listeners, as well as potential customers, could lose confidence in our ability to protect their personal information, which could cause them to discontinue or forego the use of our services. This loss of confidence would also harm our efforts to attract and retain advertisers and to obtain personal information from third parties, and unauthorized access to our programming would potentially create additional royalty expense with no corresponding revenue. Such events could adversely affect our results of operations. TheFurther, the costs of maintaining adequate protection against such threats as they develop in the future (or as legal requirements related to data security increase) could be material.

In addition, hardware, software, or applications we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our employees, contractors or other agents.deceit. We may not be able to effectively control the unauthorized actions of third parties who may have access to the data we collect.

TheHowever, the cyber security measures we have implemented, however,implemented may not be sufficient to prevent all possible attacks and may be vulnerable to hacking, employee error, ransom attacks, malfeasance, system error, faulty password management, social engineering or other irregularities. Further, the development and maintenance of these measures are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated.

We incorporate various artificial intelligence (“AI”) solutions into our digital infrastructure, services, offerings and features, and these applications are becoming important in our operations. We have not established definitivegeneral policies regarding the use of AI platforms and algorithms in our business and withseek to monitor the use of AI based applications throughout our dataenterprise. andHowever, information,such andmeasures we domay not haveeliminate systemsthe inrisks placerelated thatto inventorythe alluse of the AI-based applications that may be in useAI in our enterprise. Our competitors or other third parties may incorporate AI into their products and operations more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.business. Additionally, if the content, analyses, search results or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate, biased or in violation of third parties’ intellectual property rights, our business, reputation, financial condition, and results of operations could be adversely affected.

The use of AI applications may result in cybersecurity incidents that implicate the personal data of consumers. Any such cybersecurity incidents related to our use of AI applications could adversely affect our reputation and results of operations. AI also presents emerging ethical issues, such as the proper use of copyrighted material with AI applications, and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability. The rapid evolution of AI, including the government regulation of AI, will require significant resources to develop, test and maintain our platform, offerings, services, and features to help us implement AI ethically in ordera tomanner minimizethat minimizes unintended, harmful impact.impacts.

We rely on our own systems and systems of third partythird-party vendors to enable subscribers and listeners to access our Pandora and SiriusXM services in a dependable and efficient manner. Any degradation in the quality, or any failure, of our systems could reduce our revenues, cause us to lose customers and damage our brands. Although we have implemented practices designed to maintain the availability of the information technology and service delivery systems we rely on and mitigate the harm of any unplanned interruptions, we cannot anticipate all eventualities. We occasionally experience unplanned outages or technical difficulties. We could also experience loss of data or processing capabilities, which could cause us to lose customers and could harm our reputation and operating results.

Our data centers and our information technology and communications systems are vulnerable to damage or interruption from natural disasters, malicious attacks, fire, power loss, telecommunications failures, computer viruses or other attempts to harm our systems. The occurrence of any of these events could result in interruptions in our services and unauthorized access to, or alteration of, the content and data contained on our systems and that these third partythird-party vendors store and deliver on our behalf.

Under the United States Copyright Act, we also must pay royalties to copyright owners of sound recordings for the performance of such sound recordings on our SiriusXM service. Those royalty rates may be established through negotiation or, if negotiation is unsuccessful, by the Copyright Royalty Board. Owners of copyrights in sound recordings have created SoundExchange, an organization which negotiates licenses and collects and distributes royalties on behalf of record companies and performing artists. SoundExchange is exempt by statute from certain U.S. antitrust laws and exercises significant market power in the licensing of sound recordings. Under the terms of the Copyright Royalty Board’s existing decision governing sound recording royalties for satellite radio, we are required to pay a royalty based on our gross revenues associated with our satellite radio service, subject to certain exclusions, of 15.5% per year through December 31, 2027. A proceeding to determine sound recording royalties for satellite radio for the period beginning January 1, 2028 and ending December 31, 2032, has been noticed.

If Pandora fails to maintain these direct licenses, or if rights to certain music were no longer available under these licenses, then we may have to remove the affected music from Pandora’s services, or discontinue certain interactive features for such music, and it might become commercially impractical for us to operate Pandora Premium, Pandora Plus or certain features of our advertising supportedadvertising-supported service. Any of these occurrences could have an adverse effect on our business, financial condition and results of operations.

Sirius XM Holdings is a holding company, and its assets consist of its investments in its subsidiaries, including Sirius XM Inc. and Sirius XM Radio.Radio LLC. As a holding company, our ability to meet our financial obligations (including assumed liabilities in connection with the Transactions) to third parties is dependent upon our available cash balances, distributions from subsidiaries and other investments and proceeds from any asset sales. Further, our ability to receive dividends or payments or advances from our subsidiaries’ businesses depends on their individual operating results, any statutory, regulatory or contractual restrictions to which they are or may become subject and the terms of their indebtedness (including the restrictive covenants contained in Sirius XM Radio’sRadio LLC’s credit agreement and indentures) and any additional debt they may incur in the future. Accordingly, our ability to make payments to third parties and to otherwise meet our financial obligations at the holding company level may be constricted.

In addition, Sirius XM Radio’sRadio LLC’s borrowings under its Senior Secured Revolving Credit Facility,Facility (the “Credit Facility”), including the Incremental Term Loan,Loan (the “Delayed Draw Incremental Term Loan”), carry a variable interest rate based on the Secured Overnight Financing Rate (“SOFR”). Sirius XM Radio LLC may, in the future, hedge against interest rate fluctuations by using hedging instruments such as swaps, caps, options, forwards, futures or other similar products. These instruments may be used to selectively manage risks, but there can be no assurance that we will be fully protected against material interest rate fluctuations.

Under Section 355(e) of the Code, an acquisition of our stock would generally be presumed to be part of a plan (or series of related transactions) with the Split-Off if such acquisition occurs within two years before or after the Split-Off (or if such stock is received in the Split-Off in exchange for Liberty SiriusXM common stock (as defined in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations) that was acquired within the two years before the Split-Off). This presumption, however, may be rebutted based upon an analysis of the facts and circumstances related to the Split-Off and the particular acquisition in question, including a weighing of certain plan and non-plan factors set forth in U.S. Treasury Regulations promulgated under Section 355(e) of the Code. Further, these U.S. Treasury Regulations provide certain safe harbors under which an acquisition will be deemed not to be part of a plan (or series of related transactions) with the Split-Off for purposes of Section 355(e) of the Code.

Furthermore, there are no remedies available to the parties to the Merger Agreement with respect to any breach of representations of thesuch parties to the Merger Agreement,parties, except for certain rights the party may have under applicable law to bring a claim for fraud or willful breach of the Merger Agreement.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into agreements for significant transactions such as the Transactions in an effort to seek monetary relief. In October 2024, purported stockholders commenced an action in the Court of Chancery of the State of Delaware against Liberty Media, John C. Malone and members of the Boardboard of Directorsdirectors of Old Sirius relating to the Transactions. The plaintiffs allege that the TransactionTransactions waswere unfair to minority stockholders and unduly favored Liberty Media because, among other things: we have taken on tax liabilities; we have assumed Liberty Media’s debt; and the transactionTransactions enabled Liberty Media to appoint a majority of our board of directors with staggered terms to give Liberty Media at least three years of board-level control. The plaintiffs also allege that the Transactions closed a multi-billion-dollar valuation gap between the price at which the LSXMLiberty sharesSiriusXM common stock traded in the market and the net asset value of the underlying assets thosethe LSXMLiberty sharesSiriusXM common stock “tracked,” which solely benefited Liberty Media stockholders, and that the Special Committee failed to negotiate a fair exchange ratio in light of these benefits to Liberty Media.

•the existence of authorized and unissued stock, including “blank check” preferred stock, which could be issued by our board of directors to persons friendly to our then currentthen-current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership of persons seeking to obtain control of us.

We have directors associated or previously associated with Liberty Media, which may lead to conflicting interests.

Gregory B. Maffei, a senior advisor to Liberty Media, also serves as the Chairman of our board of directors. Dr. Evan Malone, a director of Liberty Media, also serves as a member of our board of directors. The members of our board of directors haveowe fiduciary duties to our stockholders. SuchDr. personsEvan Malone, a member of our board of directors, also haveserves as a director of Liberty Media and, as such, also owes fiduciary duties to Liberty Media’s stockholders. Therefore, suchMr. personsMalone may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting theirLiberty respective companies.Media. For example, there may be the potential for a conflict of interest if any conflict arises under the Tax Sharing Agreement or when we or Liberty Media look at acquisitions and other corporate opportunities that may be suitable for each of them.company. Moreover, our Chairman of the board of directorsdirectors, Gregory B. Maffei, who is a former president, chief executive officer and director of Liberty Media, and certain other of our directors may continue to own Liberty Media common stock, restricted stock units and options to purchase Liberty Media common stock. These ownership interests could create, or appear to create, potential conflicts of interest when these individuals are faced with decisions that could have different implications for us or Liberty Media. Any potential conflict that could qualify as a “related party transaction” (as defined in Item 404 of Regulation S-K) will be subject to review by an independent committee of the applicable company’s board of directors in accordance with its corporate governance guidelines. Any other potential conflicts that arise will be addressed on a case-by-case basis, keeping in mind the applicable fiduciary duties owed by the executive officers and directors of each company. From time to time, Liberty Media or its respective affiliates may enter into transactions with us and/or our subsidiaries or other affiliates. Although the terms of any such transactions or agreements will be established based upon negotiations between employees of the companies involved, there can be no assurance that the terms of any such transactions will be as favorable to us, or our subsidiaries or affiliates as would be the case where the parties are completely at arms’ length.

We are parties to several legal proceedings arising out of various aspects of our business, including possible class actions arising out of our marketing practices and governmental actions and possible class actions and mass arbitrationsarbitration demands arising fromfrom, among other issues, our pricing and cancellation practices. The outcome of these proceedings may not be favorable, and one or more unfavorable outcomes could have an adverse impact on our financial condition. See “Item 3. Legal Proceedings” of this Annual Report on Form 10-K for information on our material legal proceedings.

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. Any references to the “Company,” “we,” “us,” or “ours” refers to Sirius XM Holdings Inc. and its consolidated subsidiaries following the Transactions.

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. (“SplitCo”). 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,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 New SiriusSplitCo (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 SiriusSplitCo 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,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.

We operate two complementary audio entertainment businesses - oneour ofSiriusXM which it refers to as “SiriusXM”business and theour second of which it refers to as “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'sSiriusXM contentholds bundlesa include70% live,equity curatedinterest and certain33% exclusivevoting andinterest onin demandSirius programming.XM TheCanada SiriusXMHoldings serviceInc. is(“Sirius distributedXM 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,Canada” 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 music and non-music channels,channels in certain packages, direct sales of radios and accessories, and other ancillary services. As of December 31, 2024,2025, the SiriusXM business had approximately 33.232.9 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 theour 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 offersoffer a suite of data services that includes graphical weather and fuel prices, a traffic information service,service and real-time weather services in boats and airplanes.

The majority of revenue from Pandora is generated from advertising on Pandora's ad-supported radio service. Pandora also derives subscription revenue from its Pandora Plus and Pandora Premium subscribers. 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. As of December 31, 2025, Pandora had approximately 41.1 million monthly active users and 5.6 million subscribers.

Sirius XMSiriusXM also sells advertising on other audio platforms and in widely distributedwidely-distributed podcasts, which it considers to be off-platform services. Sirius XMSiriusXM has an arrangement with SoundCloud Holdings, LLC (“SoundCloud”) to be its exclusive ad sales representative in the USU.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 XMSiriusXM 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.

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 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. 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. 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.

Sirius XMSiriusXM Revenue

Sirius XMSiriusXM 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, 20242025 and 2023,2024, subscriber revenue was $6,076$5,960 and $6,342,$6,076, respectively, a decrease of 4%,2%, or $266.$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 byand an increase in self-pay subscribers on self-pay promotional and streaming-only subscription plans, alongsidepartially aoffset reductionby inrate automakerincreases paidon promotionalcertain trialsself-pay which reduced paid promotional revenue.plans.

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

For the years ended December 31, 20242025 and 2023,2024, otheradvertising revenue was $128$157 and $136,$167, respectively, a decrease of 6%, or $8.$10. The decrease was drivenprimarily bydue to lower royaltyadvertising revenuedemand fromfor Siriusnews XMand Canada.sports channels.

For the years ended December 31, 20242025 and 2023,2024, Pandora and Off-platform subscriber revenue was $540$526 and $524,$540, respectively, ana increasedecrease of 3%, or $16.$14. The growthdecrease was primarily driven by rate increases on Pandora subscription plans, partially offset by a decline in the subscriber base.base, partially offset by the full-year impact of prior year price increases on Pandora subscription plans.

We expectanticipate Pandora and Off-platform subscriber revenues to decreaseremain duerelatively to a decline in the subscriber base.flat.

For the years ended December 31, 20242025 and 2023,2024, Pandora and Off-platform advertising revenue was $1,606$1,615 and $1,589,$1,606, respectively, an increase of 1%, or $17.$9. The growthincrease was primarily driven by higherrevenue podcastinggenerated revenuefrom podcasts, programmatic and increasedhigher technology fees,fees; partially offset by reduced streamingadvertiser demand duein tostreaming increased competition.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.

Sirius XMSiriusXM Cost of Services

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

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

For the years ended December 31, 20242025 and 2023,2024, revenue share and royalties were $1,565$1,542 and $1,603,$1,565, respectively, a decrease of 2%,1%, or $38,$23, but increased as a percentage of total Sirius XMSiriusXM revenue. The decrease was driven by lower subscription revenue, partially offset by higher webwebcasting streaming royalty rates.royalties.

We expect our Sirius XMSiriusXM revenue share and royalty costs to remain flat as a percentage of revenuetotal butSiriusXM 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.revenue.

Sirius XMSiriusXM 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, 20242025 and 2023,2024, programming and content expenses were $550$555 and $549,$550, respectively, an increase of less than 1%, or $1,$5, and increased as a percentage of total Sirius XMSiriusXM revenue. The rise in costsincrease was driven by higher personnel-related costs, which were offset by lower production costs.

We expect our Sirius XMSiriusXM programming and content expenses to remaindecline relativelydue flat.to lower costs to obtain certain content.

Sirius XMSiriusXM 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, 20242025 and 2023,2024, customer service and billing expenses were $369$375 and $393,$369, respectively, aan decreaseincrease of 6%,2%, or $24,$6, and decreasedincreased as a percentage of total Sirius XMSiriusXM revenue. The reductionincrease was primarilydriven drivenby higher subscriber management system and transaction costs, partially offset by lower call center costs, transactioncosts and payment processing fees, bad debt expense, and personnel-related costs.expense.

We expect our Sirius XMSiriusXM customer service and billing expenses to increasedecrease as a result of higher subscriber management system transition costs, partially offset by a reductionreductions in call center and personnel-related costs, partially offset by higher costs associated with subscriber management systems and transaction costs.

Sirius XMSiriusXM Transmission consists of costs associated with the operation and maintenance of our terrestrial repeater networks; satellites; satellite telemetry, tracking and control systems; satellite uplink facilities; studios; and delivery of our Internet and 360L streaming and connected vehicle services.

For the years ended December 31, 20242025 and 2023,2024, transmission expenses were $190$162 and $171,$190, respectively, ana increasedecrease of 11%,15%, or $19,$28, and increaseddecreased as a percentage of total Sirius XMSiriusXM revenue. The increasedecrease was driven primarily by higherlower hosting costs associated with our streaming platform as well as increased consulting costs.platform.

We expect our SiriusSiriusXM XMtransmission cost of equipmentexpenses to remain relatively flat.

ThereThe havefollowing beenrisk nofactor material changes tosupplements the riskRisk factorsFactors previously disclosed in response to Part I, “Item 1A. Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025 which was filed with the Securities and Exchange Commission on February 5, 2026.

•failure of our satellites would significantly damage our business; and

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. (“SplitCo”).

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 packages include live, curated, hosted and certain exclusive and on-demand programming. The SiriusXM service is distributed through SiriusXM’s 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. The SiriusXM service is also available through an in-car user interface called “360L” that combines SiriusXM’s satellite and streaming services into a single, cohesive in-vehicle entertainment experience. 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 MarchJune 31,30, 2026, the SiriusXM business had approximately 32.832.9 million subscribers in the U.S., while Sirius XM Canada had approximately 2.42.5 million subscribers. Sirius XM Canada's subscribers are not included in our subscriber count or subscriber-based operating metrics.

The majority of revenue from Pandora is generated from advertising on Pandora’s ad-supported radio service, which is sold under the SiriusXM Media brand. Pandora also derives subscription revenue from its Pandora Plus and Pandora Premium subscribers. As of MarchJune 31,30, 2026, Pandora had approximately 40.139.8 million monthly active users and 5.6 million subscribers.

Results of Operations - MarchJune 31,30, 2026 and 2025

Set forth below are our results of operations for the three and six months ended MarchJune 31,30, 2026 compared with the three and six months ended MarchJune 31,30, 2025. 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.

For the three months ended MarchJune 31,30, 2026 and 2025, subscriber revenue was $1,483$1,508 and $1,470,$1,499, respectively, an increase of 1%, or $13.$9. For the six months ended June 30, 2026 and 2025, subscriber revenue was $2,991 and $2,969, respectively, an increase of 1%, or $22. The increaseincreases waswere primarily attributed to rate increases on certain self-pay plans, partially offset by a decline in the average number of subscribers.

We expect our SiriusXM advertising revenue to remaingrow relativelyas flat.we continue to leverage co-selling initiatives across our brands and platforms.

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

For each of the three months ended MarchJune 31,30, 2026 and 2025, other revenue was $31.$32 Higherand $31, respectively, an increase of 3%, or $1. For the six months ended June 30, 2026 and 2025, other revenue was $63 and $62, respectively, an increase of 2%, or $1. The increases were driven by higher service fee revenue from Sirius XM CanadaCanada, partially offset by lower rental vehicle revenue. The six month period was offsetalso impacted by a one-time true-up of license fees in the first quarter of 2025.

We expect SiriusXM other revenue to remain relatively flat.

For each of the three months ended MarchJune 31,30, 2026 and 2025, Pandora and Off-platform subscriber revenue was $129$130. For the six months ended June 30, 2026 and $132,2025, Pandora and Off-platform subscriber revenue was $259 and $262, respectively, a decrease of 2%,1%, or $3. The decrease for the six month period was primarily driven by a decline in the subscriber base.

We anticipateexpect Pandora and Off-platform subscriber revenuesrevenue to declineremain modestly.relatively flat.

For the three months ended MarchJune 31,30, 2026 and 2025, Pandora and Off-platform advertising revenue was $372$413 and $355,$394, respectively, an increase of 5%, or $17.$19. For the six months ended June 30, 2026 and 2025, Pandora and Off-platform advertising revenue was $785 and $749, respectively, an increase of 5%, or $36. The increaseincreases waswere driven by revenue generated from podcasts and higher programmatic demand and technology fees;fees, partially offset by reduced advertiser demand in streaming music.

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

Total Revenue for the three months ended MarchJune 31,30, 2026 and 2025 was $2,091$2,160 and $2,068,$2,138, respectively, an increase of 1%, or $23.$22. Total Revenue for the six months ended June 30, 2026 and 2025 was $4,251 and $4,206, respectively, an increase of 1%, or $45.

For the three months ended MarchJune 31,30, 2026 and 2025, revenue share and royalties were $377$382 and $379,$391, respectively, a decrease of 2%, or $9, and decreased as a percentage of total SiriusXM revenue. For the six months ended June 30, 2026 and 2025, revenue share and royalties were $759 and $770, respectively, a decrease of 1%, or $2,$11, and decreased as a percentage of total SiriusXM revenue. The decreasedecreases waswere driven by lower revenue share with content providers and automakers, partially offset by higher webcasting royalties.

For the three months ended MarchJune 31,30, 2026 and 2025, programming and content expenses were $135$132 and $137, respectively, a decrease of 1%,4%, or $2,$5, and decreased as a percentage of total SiriusXM revenue. For the six months ended June 30, 2026 and 2025, programming and content expenses were $267 and $274, respectively, a decrease of 3%, or $7, and decreased as a percentage of total SiriusXM revenue. The decreasedecreases waswere driven by lower content costs,costs partiallyfrom offsetcontract by higher personnel-related costs.renewals.

For each of the three months ended MarchJune 31,30, 2026 and 2025, customer service and billing expenses were $86$92, and $94,decreased as a percentage of total SiriusXM revenue. For the six months ended June 30, 2026 and 2025, customer service and billing expenses were $178 and $186, respectively, a decrease of 9%,4%, or $8, and decreased as a percentage of total SiriusXM revenue. The decrease for the six month period was driven 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.

For the three months ended MarchJune 31,30, 2026 and 2025, transmission expenses were $39$40 and $42,$38, respectively, an increase of 5%, or $2, and increased as a percentage of total SiriusXM revenue. For the six months ended June 30, 2026 and 2025, transmission expenses were $79 and $80, respectively, a decrease of 7%,1%, or $3,$1, and decreased as a percentage of total SiriusXM revenue. The increase for the three month period was driven by higher personnel-related costs. The decrease for the six month period was driven primarily by lower hosting360L costsdata associatedcosts, withpartially ouroffset streamingby platform.higher personnel-related costs.

For the three months ended MarchJune 31,30, 2026 and 2025, revenue share and royalties were $320$340 and $308,$331, respectively, an increase of 4%,3%, or $12,$9, and decreased as a percentage of total Pandora and Off-platform revenue. For the six months ended June 30, 2026 and 2025, revenue share and royalties were $660 and $639, respectively, an increase of 3%, or $21, and increased as a percentage of total Pandora and Off-platform revenue. The increaseincreases waswere driven by podcast revenue share as well as a higher sound recording and publisher royalties.share.

We expect our Pandora and Off-platform revenue share and royalties to increase with the growth in our podcastoff-platform revenue.monetization, including through podcasts and new partnerships.

For each of the three months ended MarchJune 31,30, 2026 and 2025, programming and content expenses were $15$14, and $16,decreased as a percentage of total Pandora and Off-platform revenue. For the six months ended June 30, 2026 and 2025, programming and content expenses were $29 and $30, respectively, a decrease of 6%,3%, or $1, and decreased as a percentage of total Pandora and Off-platform revenue. The decreasedecreases waswere primarily attributable to lower live event and podcast programming costs.

We expect our Pandora and Off-platform programming and content costs to declineincrease slightly.

For the three months ended MarchJune 31,30, 2026 and 2025, customer service and billing expenses were $20$18 and $18,$19, respectively, a decrease of 5%, or $1, and decreased as a percentage of total Pandora and Off-platform revenue. For the six months ended June 30, 2026 and 2025, customer service and billing expenses were $38 and $37, respectively, an increase of 11%,3%, or $2,$1, and increaseddecreased as a percentage of total Pandora and Off-platform revenue. The decrease for the three month period was primarily driven by lower transaction fees. The increase for the six month period was primarily driven by higher bad debt expense, partially offset by lower transaction fees.

We expect our Pandora and Off-platform customer service and billing costs to remain relatively flat.flat as a percentage of Pandora and Off-platform subscriber revenues.

We expect our Pandora and Off-platform transmission costs to remainincrease relativelyas flat.a result of higher cloud costs to support revenue growth.

For each of the three months ended MarchJune 31,30, 2026 and 2025, subscriber acquisition costs were $100,$109 and $107, respectively, an increase of 2%, or $2, and increased as a percentage of total revenue. For the six months ended June 30, 2026 and 2025, subscriber acquisition costs were $209 and $207, respectively, an increase of 1%, or $2, and decreased as a percentage of total revenue. The decreaseincreases waswere primarily driven by lowerincreased equipmentproduction installations.from certain automakers with higher subsidy rates.

We expect subscriber acquisition costs to remainincrease relativelydue flat.to contractual increases of subsidy rates with certain automakers.

For the three months ended MarchJune 31,30, 2026 and 2025, sales and marketing expenses were $187$188 and $190,$185, respectively, aan decreaseincrease of 2%, or $3, and increased as a percentage of total revenue. For each of the six months ended June 30, 2026 and 2025, sales and marketing expenses were $375 and decreased as a percentage of total revenue. The decreaseincrease for the three-month period was primarily dueattributable to higher personnel-related costs.costs, reflecting increased sales commissions and performance-based incentive compensation associated with revenue growth; partially offset by higher marketing spend.

We expect sales and marketing expenses to increase due to an increased investment in our brand and content promotion spend to drive long term acquisition and retention benefits along with other marketing cost.benefits.

For each of the three months ended MarchJune 31,30, 2026 and 2025, product and technology expenses were $69$56 and $73,decreased as a percentage of total revenue. For the six months ended June 30, 2026 and 2025, product and technology expenses were $125 and $129, respectively, a decrease of 5%,3%, or $4, and decreased as a percentage of total revenue. The decrease for the six month period was primarily driven by lowera one-time cloud cost adjustment, partially offset by higher personnel-related costs.

We anticipateexpect product and technology expenses willto remainincrease relativelyprimarily flatdue asto wehigher optimizecloud ourinfrastructure technology spend.costs.

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 continuedlower efficiencies.technology, employee-related and rent costs.

For the three months ended MarchJune 31,30, 2026 and 2025, depreciation and amortization expense was $151$165 and $144,$121, respectively. For the six months ended June 30, 2026 and 2025, depreciation and amortization expense was $316 and $265, respectively. The increaseincreases waswere primarily associated with additional assets placed in service as well as a change in the estimated useful life of our Sirius FM-6 satellite.satellite as well as additional assets placed in service. The change in the useful life of the Sirius FM-6 satellite is expected to add $60 of incremental depreciation expense for the fiscal year 2026 and will be fully depreciated by December 2026.

For the three months ended MarchJune 31,30, 2026 and 2025, impairment, restructuring and other costs were $6 and $48,$107, respectively. For the six months ended June 30, 2026 and 2025, impairment, restructuring and other costs were $12 and $155, respectively. During the three months ended MarchJune 31,30, 2026, we recorded $5 associated with restructuring charges and $1 associated with severance and other employee costs. During the six months ended June 30, 2026, we recorded charges of $4$9 associated with restructuring charges and $2$3 associated with severance and other employee costs. During the three months ended MarchJune 31,30, 2025, we recorded impairmenta chargescharge of $20$97 associated with impairments related to terminated software projects, other restructuring related costs of $6 and severance and other employee costs,costs $15of associated$4. withDuring restructuringthe costs,six andmonths ended June 30, 2025, we recorded a charge of $13$109 associated with impairments related to theterminated write-offsoftware projects, other restructuring related costs of certain$22 assets.and severance and other employee costs of $24.

For the three months ended MarchJune 31,30, 2026 and 2025, interest expense was $112 and $117,$116, respectively. For the six months ended June 30, 2026 and 2025, interest expense was $224 and $233, respectively. The decreasedecreases waswere primarily driven by a lower average outstanding debt balance.

Other (Expense) 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 three months ended MarchJune 31,30, 2026 and 2025, other expense,(expense) income, net was $16$(48) and $1,$15, respectively. During each ofFor the threesix months ended MarchJune 31,30, 2026 and 2025, other (expense) income, net was $(64) and $14, respectively. During the three and six months ended June 30, 2026, we recorded unrealized losses on debt measured at fair value andvalue, trading lossesgains associated with the investments held for our Deferred Compensation Plan, partially offset byand earnings on unconsolidated entity investments. During the three and six months ended June 30, 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.

For the three months ended MarchJune 31,30, 2026 and 2025, income tax expense was $81$73 and $65,$59, respectively. Our effective tax rate forFor the threesix months ended MarchJune 31,30, 2026 and 2025 was 24.8% and 24.2%, respectively. The effective tax rate for the three months ended March 31, 2026 and 2025 were primarily driven by federal and state2025, income tax expense was $154 and tax$124, losses related to share-based compensation, partially offset by certain tax credits.respectively.

Our Non-GAAP financial measures should be viewed in addition to, and not as an alternative for or superior to, our reported results prepared in accordance with GAAP. In addition, our Non-GAAP financial measures may not be comparable to similarly-titled measures by other companies. 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 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 MarchJune 31,30, 2026 compared to MarchJune 31,30, 2025.

The following table contains our Non-GAAP financial and operating performance measures which are based on our adjusted results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025.