What Happened?

Shares of satellite radio and media company Sirius XM (NASDAQ: SIRI) jumped 10.1% in the morning session after the company reported third-quarter results that surpassed analyst expectations for both revenue and profit. The satellite radio company reported a GAAP profit of $0.84 per share, a significant turnaround from a loss in the same period last year and 7.9% above consensus estimates. Revenue for the quarter was flat year-on-year at $2.16 billion but still beat forecasts. Despite a year-on-year decline of 574,000 total subscribers, investors appeared to focus on the improved profitability. A key highlight was the company's free cash flow of $257 million, with the free cash flow margin expanding to 11.9% from just 1.1% in the prior year's quarter.

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What Is The Market Telling Us

Sirius XM’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Sirius XM and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 9 days ago when the stock gained 3.7% on the news that it announced a new integration with Vehlo, a software provider for auto service and repair shops, to offer trial subscriptions. Through this partnership, auto service and repair businesses using Vehlo's software can provide their eligible customers with a complimentary three-month trial subscription to SiriusXM. The integration was made available for shops using the Tire Guru and Shop-Ware platforms, with another called Protractor expected to launch soon. This initiative gave the participating shops a way to add value for their customers at no extra cost, while expanding SiriusXM's potential subscriber base.

Sirius XM is up 5.5% since the beginning of the year, but at $23.31 per share, it is still trading 18.9% below its 52-week high of $28.74 from December 2024. Investors who bought $1,000 worth of Sirius XM’s shares 5 years ago would now be looking at an investment worth $406.72.

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