SiriusXM Holdings Inc. (NASDAQ: SIRI) gave investors a classic mixed bag on Thursday. The satellite radio company beat Wall Street's earnings expectations for the third quarter of 2026, but revenue came in just shy of what analysts were looking for. The stock slid in premarket trading, because apparently a penny beat and a tiny revenue miss is enough to spoil the mood.

Earnings Beat, Revenue Miss

SiriusXM reported adjusted earnings of 78 cents per share, topping the consensus estimate of 77 cents. Revenue landed at $2.153 billion, down slightly from $2.159 billion a year earlier and narrowly missing the $2.159 billion analysts expected.

Net income rose 7% to $317 million, though diluted earnings per share declined to 78 cents from 84 cents a year earlier. That's the kind of math that makes you squint, but it's the reality of a changing share count and tax picture.

Subscribers and Advertising Hold Steady

Subscriber revenue was essentially flat at $1.63 billion, and advertising revenue held steady at $456 million. Equipment revenue fell to $36 million from $43 million, reflecting higher memory costs tied to satellite radio hardware. The SiriusXM segment itself generated $1.60 billion in revenue, and average revenue per user stayed stable at $15.18 following earlier pricing changes.

The subscriber story is where things get interesting. Self-pay monthly churn improved to approximately 1.5%, and the company added 5,000 self-pay subscribers, an improvement of 45,000 from a year earlier. That's not explosive growth, but it's a sign that the bleeding may be slowing. Pandora and Off-Platform revenue increased modestly to $549 million.

Profitability and Cash Flow Improve

Adjusted EBITDA rose 3% year over year to $694 million, helped by lower programming expenses, increased customer service automation, and reduced marketing spending. Free cash flow climbed 14% to $293 million, benefiting from higher earnings, favorable working capital, and lower interest and capital expenditures.

Total cost of services declined 1% to $1.02 billion. Gross profit increased approximately 0.7% to $1.14 billion, while gross margin improved to approximately 52.8%.

CEO Jennifer Witz highlighted improving subscriber trends, customer engagement and retention, alongside continued investment in premium content. CFO Zac Coughlin emphasized stronger cash generation, debt reduction, and the company's focus on maintaining financial flexibility while returning capital to shareholders.

Forecast Raised, But Still Below Consensus

SiriusXM raised its full-year revenue forecast to approximately $8.55 billion from its previous outlook of $8.525 billion. That's a raise, sure, but the revised forecast remains below Wall Street's consensus estimate of $8.627 billion. So the company is feeling a little better about itself, just not as good as analysts are feeling about it.

As of Sept. 30, cash and cash equivalents totaled $210 million, up from $94 million at the end of 2025. Total assets stood at $27.19 billion, while long-term debt declined to $8.07 billion from $8.65 billion at year-end.

Price Action

Sirius XM Holdings shares were down 2.34% at $26.68 during premarket trading on Thursday, according to market data.