Sirius XM Holdings (SIRI) risk factors, FY2024 10-K

Risks Relating to our Business and Operations

1. 01We face substantial competition and that competition has increased over time
2. 02Our SiriusXM service has suffered a loss of subscribers and our Pandora ad-supported service has similarly experienced a loss of monthly active users
3. 03The number of subscribers to our SiriusXM service has declined due to a variety of factors, including a decline in the rate at which new car buyers convert their trial subscriptions into self-pay subscriptions. The decline in the number of SiriusXM subscribers may have a number of collateral effects on our business
4. 04Our business will be adversely affected if we are unable to attract new subscribers and listeners and retain our current subscribers and listeners
5. 05We engage in extensive marketing efforts and the continued effectiveness of those efforts is an important part of our business
6. 06We rely on third parties for the operation of our business, and the failure of third parties to perform could adversely affect our business
7. 07If one or more of these third parties do not perform in a satisfactory or timely manner, including complying with our standards and practices relating to business integrity, personnel and cybersecurity, our business could be adversely affected
8. 08Failure to successfully monetize and generate revenues from podcasts and other non-music content could adversely affect our business, operating results, and financial condition
9. 09We may not realize the benefits of acquisitions or other strategic investments and initiatives
10. 10The impact of economic conditions may adversely affect our business, operating results, and financial condition

Risks Relating to our SiriusXM Business

1. 11Changing consumer behavior and new technologies relating to our satellite radio business may reduce our subscribers and may cause our subscribers to purchase fewer services from us or to cancel our services altogether, resulting in less revenue to us
2. 12A substantial number of our SiriusXM service subscribers periodically cancel their subscriptions, and we cannot predict how successful we will be at retaining customers
3. 13Our ability to profitably attract and retain new subscribers to our SiriusXM service is uncertain
4. 14A substantial portion of the subscription growth for our satellite radio service has come from purchasers and lessees of new and pre-owned automobiles in the United States, and we expect this to be an important source of subscribers for our satellite radio service in the future
5. 15The imposition of tariffs by the United States government could have a major effect on the United States auto industry, upon which Sirius XM is dependent upon as a material source of new subscribers
6. 16Failure of our satellites would significantly damage our business
7. 17Our SiriusXM service may experience harmful interference from wireless operations

Risks Relating to our Pandora and Off-platform Business

1. 18Our Pandora and Off-platform business generates a significant portion of its revenues from advertising, and reduced spending by advertisers could harm our business
2. 19Our Pandora and Off-platform business generates a majority of its revenues from third parties advertising on the Pandora ad-supported service and other platforms. These advertisers do not have long-term advertising commitments with us and can terminate their contracts at any time
3. 20Emerging industry trends may adversely impact our ability to generate revenue from advertising
4. 21Our failure to convince advertisers of the benefits of our Pandora ad-supported service could harm our business
5. 22In order to effectively monetize listener hours, we must, among other things, develop compelling ad product solutions
6. 23Changes to mobile operating systems and browsers may hinder our ability to sell advertising and market our services
7. 24If we fail to accurately predict and play music, comedy or other content that our Pandora listeners enjoy, we may fail to retain existing listeners and attract new listeners

Risks Relating to Laws and Governmental Regulations

1. 25Privacy and data security laws and regulations may hinder our ability to market our services, sell advertising and impose legal liabilities
2. 26Consumer protection laws and our failure to comply with them could damage our business
3. 27Failure to comply with FCC requirements could damage our business
4. 28We may face lawsuits, incur liability or suffer reputational harm as a result of content published or made available through our services
5. 29Environmental, social and governance expectations and related reporting obligations may expose us to potential liabilities, increased costs, reputational harm, and other adverse effects
6. 30If we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions and private litigation and our reputation could suffer
7. 31We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations
8. 32Interruption or failure of our information technology and communications systems could impair the delivery of our service and harm our business
9. 33technical 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
10. 34Rapid technological and industry changes and new entrants could adversely impact our services
11. 35The market for music rights is changing and is subject to significant uncertainties
12. 36Pandora has direct license agreements with many sound recording copyright and musical work copyright owners. These agreements grant us the right to operate Pandora Premium, and add interactive features, such as replays, additional skips and offline play, to Pandora’s ad-supported service and to Pandora Plus
13. 37greater extent than our Pandora business. We have not been able to negotiate or obtain lower royalty rates under these direct licenses
14. 38Failure to protect our intellectual property or actions by third parties to enforce their intellectual property rights could substantially harm our business and operating results
15. 39Some of our services and technologies use “open source” software, which may restrict how we use or distribute our services or require that we release the source code subject to those licenses

Risks Related to our Capital Structure

1. 40While we currently pay a quarterly cash dividend to holders of our common stock, we may change our dividend policy at any time
2. 41Our holding company structure could restrict access to funds of our subsidiaries that may be needed to pay third party obligations
3. 42We have significant indebtedness. As of December 31, 2024, we had an aggregate principal amount of approximately $10.4 billion of indebtedness outstanding
4. 43Our ability to incur additional indebtedness to fund our operations could be limited, which could negatively impact our operations

Risks Relating to the Transactions

1. 44We may have a significant indemnity obligation to Liberty Media, which is not limited in amount or subject to any cap, if the transactions associated with the Split-Off are treated as a taxable transaction
2. 45We may determine to forgo certain transactions that might otherwise be advantageous in order to avoid the risk of incurring significant tax-related liabilities
3. 46We have assumed and are responsible for all of the liabilities attributed to the Liberty SiriusXM Group as a result of the completion of the Transactions, and acquired the assets of SplitCo on an “as is, where is” basis
4. 47Furthermore, there are no remedies available to the parties with respect to any breach of representations of the parties to the Merger Agreement, except for certain rights the party may have under applicable law to bring a claim for fraud or willful breach of the Merger Agreement
5. 48We may be harmed by securities class actions and derivative lawsuits in connection with the Transactions
6. 49Certain provisions of our amended and restated charter and amended and restated bylaws may discourage, delay or prevent a change in control that a stockholder may consider favorable
7. 50We have directors associated with Liberty Media, which may lead to conflicting interests
8. 51Our directors and officers are protected from liability for a broad range of actions

Other Operational Risks

1. 52If we are unable to attract and retain qualified personnel, our business could be harmed
2. 53Our facilities could be damaged by natural catastrophes or terrorist activities
3. 54The unfavorable outcome of pending or future litigation and mass arbitrations could have an adverse impact on our operations and financial condition
4. 55We may be exposed to liabilities that other entertainment service providers would not customarily be subject to
5. 56Our business and prospects depend on the strength of our brands