SiriusXM Holdings Inc.

Greetings. Welcome to SiriusXM's Third Quarter 2023 Financial and Operating Results Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If you'd like to ask a question, please press star 1 from your telephone keypad and a confirmation tone to indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants that are using speaker equipment, It may be necessary to pick up your handset before pressing the star keys. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to Hooper Stevens, Senior Vice President of Investor Relations and Finance. Mr. Stevens, you may begin.

Thank you, and good morning, everyone. Welcome to SiriusXM's third quarter 2023 earnings conference call. Today, we will have prepared remarks from Jennifer Witts, our Chief Executive Officer, and Tom Barry, our Chief Financial Officer. Scott Greenstein, our President and Chief Content Officer, will join Jennifer and Tom to take your questions during the Q&A portion of this call. 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 in 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'd 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.

Thanks, Hooper, and good morning, everyone. We really appreciate everyone being here today. We are pleased with the strong progress we made this quarter and remain on track to meet our goals for the full year. We closed the quarter with approximately 34 million total subscribers to our flagship Series XM service and continue to drive sequential improvements quarter to quarter in self-pay net subs. subscriber churn remains incredibly low at approximately 1.6% despite increases in vehicle-related turnover. And although we did not issue formal subscriber guidance for 2023, we are still anticipating slightly positive self-pay net subscriber additions for the back half of this year. The overall ad market remains soft, and we expect to close the year relatively flat versus last year. While the WGA and SAG afterstrikes resulted in delayed campaigns within the entertainment space this past quarter, we did begin to see some key verticals such as CPG start to bounce back. Podcasting also remains a tailwind. Both our programmatic and audience buying capabilities continue to set us apart, making SiriusXM an important marketing partner given our flexibility and scale. As we've shared with you over the last few quarters, we have been accelerating our transformation of the SiriusXM business to better capture consumer demand for our live, human-curated audio service that differentiates us and to position ourselves to capture positive subscriber growth in the years ahead. Our resilient and extremely profitable business model, underscored by our significant ongoing cash flow generation, persists even amid this investment phase of our business, as we ready for the upcoming rollout of our next generation platform later this quarter. Ahead of the launch, the past quarter, we continued to focus efforts on improving returns in our streaming business. increasing efficiencies and bringing in new trialers, and enhancing onboarding and retention of streaming-only customers. And while still very early, we are beginning to see the first cohort of trialers moving off the six-month streaming offer we announced with T-Mobile earlier this year, our first-ever integrated billing provider, and we are pleased with the results. We are confident that the launch later this year of our new streaming products, brand platform, and enhanced marketing capabilities will put us on a path for continued improvements in subscriber acquisition and retention as we move through next year. This launch is just the beginning of a series of innovations in our products, marketing, and content that we expect will only accelerate in the coming years. We look forward to going into much more detail on our transformation with you at our press and industry preview event a week from tomorrow, where we will reveal what we've been up to this past year and provide a first look at our new streaming experience unveil a refreshed brand, and more. We'll also be participating in Liberty Media's Investor Day next Thursday. And while Tom will briefly address the business combination proposal that Liberty Media publicly announced, I'll just say that we have a strong and capable special committee of independent directors responsible for the negotiations, and we'll share more when there's something to announce. While our streaming experience will be a cornerstone of our company's long-term future growth, the in-car experience continues to drive our business today. We are pleased with the progress made in the quarter driving the innovation of new technologies and adoption of our 360L platform and extending long-term agreements with automakers. In fact, I'm excited to announce today that beginning with model year 2024, in addition to being available on the F-150 Lightning, Ford will make SiriusXM a standard feature in traditional F-150s, America's best-selling vehicle for 41 years running. We are also excited for the debut of our 360L platform on the Android Automotive operating system later this year. This will bring with it the introduction of what we call Ignition On recommendations, our most sophisticated in-car personalization yet that solves for choice paralysis and gets listeners to the content they want to hear the moment they turn on the car. As we've said before, these types of features have driven better conversion rates and better retention. And over time, we expect that Android will grow to become the dominant OEM operating system, improving 360L adoption and feature parity along the way. So this launch marks a significant milestone for us. Looking back at the past quarter, we brought listeners closer to the artists, personalities, and content creators they love with a diverse programming slate that sets our premium curated radio service apart. For example, with the 2024 presidential season already underway, we're seeing growing interest in our political programming, which we can expect to rise further as we move closer to next year's general election. This includes a significant percentage growth in listeners to Megyn Kelly's show, which we recently announced we've extended with a new multi-year deal. Megyn continues to deliver in-depth interviews with significant political and cultural figures, including last month when she had a headline-making exclusive interview with former President Donald Trump. We're incredibly proud to be a platform that provides a wide range of viewpoints across our political channels, from the regular appearances of leading Democrats on our Progress Channel to town halls with some of the top Republican candidates. In fact, in the last quarter, we've had interviews with every major presidential candidate across our Patriot, POTUS, Progress, and Triumph channels. In addition to our own SiriusXM-produced channels, we also provide simulcasts of the biggest television news outlets in the country, including CNBC, CNN, HLN, MSNBC, and Today Show Radio. And last week, we announced a multi-year extension of our agreement to carry Fox News, Fox Business, and Fox News headlines 24-7. Overall, sports listening was also up in the quarter. And with the start of the NFL season, we are seeing positive trends in listeners to our SiriusXM NFL radio channel, which saw an uptick year over year in percentage of total listeners and time spent listening. More fans are discovering and connecting with the excellent NFL content and commentary we deliver. That's not only live broadcasts of every game with your hometown announcers, but unique and exclusive talk content beyond the games. We launched the third season of our exclusive show, Let's go with Tom Brady, Larry Fitzgerald, and Jim Gray in September. And this season, we added former Pro Bowl quarterback Alex Smith to our roster of hosts. With so much action across the NFL, college football, the NBA, the NHL, and MLS this fall alone, we deliver consumers exceptional value as the one-stop destination for so many sports. Likewise, for music fans, we had something for everyone this past quarter. From our incredible specialty programming, spotlighting Latin music and culture across SiriusXM and Pandora throughout Hispanic Heritage Month, to a dedicated Ed Sheeran pop-up channel where SiriusXM listeners could hear the Grammy award-winning artist's exclusive show for SiriusXM listeners this summer in the Hamptons. In celebration of the 50th anniversary of hip-hop in August, we hosted a day of events, including a one-of-a-kind concert with Wu-Tang Clan and a very special community event with the Boys and Girls Club in multiple cities. The event was also part of our SiriusXM CARES philanthropic initiative that aims to promote and further social equality with a holistic approach to giving and greater alignment with the communities in which we live and work. Hip-hop music and artists have impacted our culture in such meaningful ways over the years, and it was an honor to get back to the next generation of changemakers. TikTok Radio also continues to be a great success for us in delivering content that resonates with younger, more diverse listeners. We've built out an incredible roster of TikTok influencers that host the channel, and this past quarter continued to deliver different formats in how we package and present viral music through these personalities. For example, in September, we introduced a new top 10 weekly countdown show comprised of the most popular songs on the platform in the U.S. hosted by one of our resident pop culture TikTok influencers. And just yesterday, we introduced dedicated shows for each of the TikTok personalities where they share music and add commentary on their respective areas of influence on the viral platform. Moving on to our advertising business. Podcasting continues to be a growth driver. We have already booked more in 2023 than we delivered in full year 2022 sales. Our third quarter podcasting growth of 28% is outpacing the broader marketplace and programmatic specifically was up 97% year over year. We are focused on delivering innovative solutions within this space by continuing to develop our targeting capabilities, both at an audience and show level and as well as through bigger picture work aimed at addressing industry pain points. This includes a new, first-of-its-kind, third-party brand safety and suitability verification solution for podcast advertising developed together with barometer and marketing automation platform ArtsAI. We can now provide brands with reporting mid-campaign so they can optimize their buy in real time, as well as receive a post-campaign analysis that includes brand suitability and contextual insights to give them confidence in their investments. By removing historical barriers to the podcast marketplace, such as brand suitability, we are able to welcome new advertisers to the space and expand the broader pool of ad dollars available to us. We remain focused on further scaling our advertising offering, and we expect the relaunch of the SiriusXM platform to drive increases in our SiriusXM digital monthly active users over time, opening up new opportunities within our growing advertising business. Again, I am extremely pleased with our results and progress in the third quarter. Looking ahead, we expect SiriusXM's robust cash generation to grow in the coming years, and we like our position as a leading premium human-curated audio service in North America. I look forward to sharing many more details on our transformation underway next week at our event in New York. I'll now turn it over to Tom, who will go through the financials in more detail.