SiriusXM Holdings Inc.

Please stand by, we're about to begin. Good day and welcome to the SiriusXM's first quarter 2022 financial and operating results conference call. Today's conference is being recorded. A question and answer session will be conducted following the presentation. If you have a question at that time, please press star 1 on your telephone keypad. If at any time you'd like to be removed from the queue, please press star 2. At this time, I'd like to turn the call over to Hooper Stevens, Senior Vice President, Investor Relations and Finance. Mr. Stevens, please go ahead.

Thank you and good morning, everyone. Welcome to SiriusXM's first quarter 2022 earnings conference call. Today, we will have prepared remarks from Jennifer Witts, our Chief Executive Officer, and Sean Sullivan, our Chief Financial Officer. Scott Greenstein, our President and Chief Content Officer, will join Jennifer and Sean to take your questions. I would like to remind everyone that certain statements made during the call might be forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These and all forward-looking statements are based upon management's current beliefs and expectations and necessarily depend upon assumptions, data, or methods that may be incorrect or imprecise. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For more information about those risks and uncertainties, please view SiriusXM's SEC filings and today's earnings release. We advise listeners to not rely unduly on forward-looking statements and disclaim any intent or obligation to update them. As we begin, I would like to remind our listeners that today's call will include discussions about both actual results and adjusted results. All discussions of adjusted operating results exclude the effects of stock-based compensation. With that, I'll hand the call over to Jennifer.

Thank you for joining us today. SiriusXM reported solid first quarter growth in both subscription and advertising revenue and healthy cash generation even after substantial investments in our business. we are reaffirming all of our subscriber and financial guidance for the year. Each day, we make progress in shaping the future of audio entertainment in North America with curated, distinct, and original content, exclusive live events, and a growing podcast business. Audio in America is thriving, and so is SiriusXM. According to recent Edison research, monthly online audio listeners in the U.S. grew to 73% of the 12 and up U.S. population. up from 68% a year prior. Daily audio time is also increasing, with Americans on average spending 17 more minutes per day with audio, compared to the same time in 2020. At SiriusXM, consumption of our unique content via streaming is contributing to this growth, as we are seeing time spent listening to SiriusXM growing meaningfully faster than our subscriber base. These industry trends are also driving enhanced monetization, as is evident in the IAB's new Internet Advertising Revenue Report, which found that digital audio was the fastest-growing advertising segment last year, climbing to almost $5 billion. This underscores the continued opportunity for scale within this segment of our business. SXM Media has established itself as a leader as the number one-ranked podcasting ad network, powering significant growth in our advertising revenue. Across all of our platforms, we reach approximately 150 million monthly listeners, and we are extremely well positioned for future growth. As you saw in the release, Series XM self-pay net additions were slightly negative in the first quarter, with growth in digital subscriptions partially offsetting a decline in our traditional in-car subscriptions. First quarter net additions, much as in the fourth quarter, were impacted by the lower auto sales we began to see in the second half of last year as supply constraints became more pronounced. These conditions have not yet eased. SAR actually declined sequentially each month in the first quarter, and inventories remain very tight. We're always working very hard to outperform our guidance, but we will be closely watching supply chains and sales volumes, and we'll of course keep you updated as the year progresses. With all this uncertainty in the general economic environment, consumer demand for both new and used vehicles and our service is healthy. We continue to retain subscribers with an excellent monthly churn rate of just 1.6%, and ARPU reached a record level in the first quarter, climbing 9% year-over-year as pricing actions we took late last year continue to yield benefits. Our new car and estimated used car penetration rates grew modestly to 83% and 52%, respectively, and our enabled fleet is now nearly 146 million cars. We continue to make progress deploying 360L at many automakers. The rollout of 360L and the enhanced features that come with it is a long-term investment that will enable us to grow subscription revenue and eventually even our ad platform for years to come. Don will talk more about the financials, but we are making substantial investments to build additional paths to grow beyond our traditional vehicle funnels. We have doubled down on brand marketing to position ourselves for younger audiences and out-of-car streaming. and in performance marketing to drive digital acquisitions. We believe building out a digital funnel is the right thing for the business long term. Remember, our economics on our digital subscribers are very strong, especially compared to other audio streaming companies, and enable us to invest to grow this funnel. Subscribers listening on our digital platforms to on-demand content are up more than 50% year over year, demonstrating growing demand for more control and personalized content within Series XM, and this will increase as awareness grows. During our last earnings call, we discussed the new hire of Joe Inzerillo, our head of product and technology. One quarter into the job, he is already having an impact on our company as we accelerate the current state of our tech across the organization and map out the future of our business. By improving personalization and recommendations in the SXM app and in 360L, easing digital onboarding, widening distribution on 10-foot devices, and speeding innovation in-car, we are broadening the attractiveness of SiriusXM to potential subscribers across the board. We are adding talent with diverse experience building customer-centric digital products, and we plan to increase our velocity to market. We believe these investments will benefit subscriber growth long-term, whether in-car or purely digital. Our best-in-class content drives engagement and subscriber loyalty. We've introduced listeners to first-time artist channels from the legendary Joni Mitchell, rock and soul icon Tina Turner, Avril Lavigne, Maren Morris, and a year-long channel from one of the best-selling acts in music history, Red Hot Chili Peppers. We also brought back artists and partner-branded channels that drew headlines and subscriber attention, such as Neil Young Radio and the David Bowie Channel. Our programming regularly honors important groups that are being recognized throughout the country. During Women's History Month, we created a channel devoted to the defining female-led festival tour of the 90s, Lilith Fair. It aired alongside other programming dedicated to female artists across genres. During Black History Month, we worked with artists and their representatives to create curated channels for the Aretha Franklin Channel, Miles Davis Radio, and the Motown Channel. We created the Grammy Channel to showcase this year's artist nominees leading up to Music's Biggest Night. Pandora continued to create new ways for listeners to experience the music they love by creating a personalized station mode curated by LeBron James on uninterrupted radio. adding a number of top Latin artists to our suite of billionaire stations, and by teaming up with SoundCloud to highlight innovative emerging artists with the new DigiCore by SoundCloud station. This is an extension of SiriusXM's collaboration with SoundCloud, which boasts an existing channel, SoundCloud Radio, and an original show, The Lookout by SoundCloud on Hip Hop Nation. The live experience is so important to our subscribers and listeners. and SiriusXM and Pandora continued to offer great live performances for thousands of fans with major artists including Avril Lavigne, John Legend, John Mayer, and Kelly Rowland. Our multifaceted relationship with TikTok allowed us to amplify and extend the reach of some of these events to younger audiences. In the comedy world, we launched its Showtime at the Apollo Comedy. The channel showcased the very best stand-up from the program's decades-long run, including early performances from some of today's biggest comedians. Our approach to podcasting is purposely multi-tracked. Some agreements are with major podcast brands for exclusive global rights to advertising inventory, and others go beyond that and involve close collaboration in the content of the shows or in which podcasters have the opportunity to expand their audience and profile by appearing on SiriusXM channels. It's our experience that great podcasts can also make great content on SiriusXM. And so we launched new cross-platform endeavors, such as the first-ever streaming channel dedicated to a podcast, Freakonomics, serving as a curated collection of the best of the award-winning series. We launched two new live shows, Open Lines on Faction, in which the hosts of the popular horror comedy podcast, Last Podcast on the Left, talk directly with listeners about a paranormal topic of their choice, and It's Me Tinks Live on the Starz channel, in which the well-known digital creator and host of the popular podcast gives advice directly to listeners. We are the top network in the Triton Digital Podcast Report in average weekly users and downloads, and several of our shows received high honors, including seven Ambie Award nominations and a win for the Best Comedy Podcast. and we just received seven Webby Awards, including two for our popular Conan O'Brien Needs a Friend. Additionally, SXM Media, the company's combined advertising sales group, is the undisputed leader in podcast ad sales, and we are the number one podcast advertising network in weekly U.S. listener reach, per Edison Research, and the representative of four of the top 15 podcasts in the country, including Crime Junkie, Office Ladies, Dateline NBC, and soon Pod Save America. Over the past several months, we've signed even more exclusive podcast sales and distribution agreements with a variety of publishers, including Crooked Media, which showcases some of the most popular and critically acclaimed podcasts in the country, such as the aforementioned Pod Save America, and Revolver, a leading multicultural audio-on-demand content creator and publisher. We're also seeing more digital content creators turning to podcasting to expand their brand and partnering with us to scale their audio presence. Along with Tinks, we recently signed new deals with both Critical Role and Therapy Gecko, both of which gained niche but significant fame through live video streaming and are now extending into the audio space. So many of our listeners love sports, and we are seeing significant year-over-year increases in the consumption of sports content. We are committed to the best live coverage of the biggest events. SiriusXM and I Am Athlete, the media network founded by former NFL All-Pro receiver Brandon Marshall, have teamed up on a new content deal that includes a live nightly show on our Mad Dog Sports Radio channel. As part of the agreement, SXM Media is also now the exclusive global ad representative for the popular I Am Athlete audio podcast. Last year, we signed an agreement to become the exclusive audio provider of the Masters Tournament, and this year, we provided top-notch coverage across all four rounds of the tournament for golf fans and added new voices to our team, Mike Tirico, Curtis Strange, Susie Whaley, and Steve Melnick. The NFL continues to be one of our most popular sports offerings, and we capped the season by offering multiple broadcasts of the Super Bowl from L.A., NFL Radio, Mad Dog Sports Radio, SiriusXM Fantasy Sports Radio, ESPNU Radio, and other channels broadcast daily from Radio Row at the LA Convention Center, while several star personalities, including Kevin Hart, Conan O'Brien, and Sway Calloway, hosted Super Bowl week specials from our LA studios. SiriusXM covered two inaugural events featuring athletes from historically black colleges and universities, the NBA HBCU Classic and the HBCU Legacy Bowl. giving listeners live access to these two great games in their first year. From sports and music to news, talk, and entertainment, we continue to bring our listeners a best-in-class listening experience across platforms, ranging from can't-miss live programming to standout music and comedy curation to award-winning podcasts. All in all, I'm pleased with how SiriusXM is weathering the challenging auto sales environment investing to improve and accelerate our digital distribution, and growing our ad platform via podcasting. We also continue to generate significant cash flows that enable us to shape our future and reward our stockholders. For more details on those financials, I'll turn it over to Sean.