SiriusXM Holdings Inc.

Greetings. Welcome to SiriusXM's third quarter 2024 operating and financial results conference call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If you'd like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, It may be necessary to pick up your handset before pressing the star keys. If anyone today should require operator assistance, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I'll turn the conference over to Hooper Stevens, Senior Vice President of Investor Relations and Finance. Mr. Stevens, you may now begin.

Thank you, and good morning, everyone. Welcome to SiriusXM's third quarter 2024 earnings conference call. Today, we will have prepared remarks from Jennifer Witts, our Chief Executive Officer, and Tom Berry, 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 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'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 and the Liberty Media transaction. Additionally, we have posted a supplementary presentation on our investor relations website for your convenience. With that, I'll hand the call over to Jennifer.

Thanks, Hooper, and thank you all for joining us this morning. It was a milestone quarter for us at SiriusXM as we completed our transaction with Liberty Media and emerged as a fully independent public company. We are excited to reintroduce our business to the market, showcasing the actions we are taking to stem and reverse recent subscriber declines and enhance free cash flow generation, driving toward our long-term targets of 50 million subscribers and $1.8 billion in free cash flow. To achieve these goals, we expect to leverage the power of our full portfolio to grow our core business through the expansion of a free ad-supported tier of SiriusXM and the introduction of a premium interactive bundle both in-car and in-app. With each of these initiatives, we will be building upon the broader tech replatforming we began last year, as well as the insights we've gained from Pandora and our other business units, to deliver more value to our customers across an expanded set of offerings, drive discovery of our exclusive content, and give subscribers the control they crave. As we continue making progress in the evolution of our business, we will share key updates to illustrate how we are measuring against each of our objectives, from enhancing our subscription business across content, technology, and price, to building our advertising business and maintaining our financial strength with ongoing business optimizations. Jumping into the third quarter, we are pleased to have delivered 14,000 self-pay net additions and improvement of 110,000 from last year's third quarter, and we still expect our full-year subscriber performance to be slightly better than last year's. Our advertising revenue was softer than expected. With lower demand due to a flood of new CTV supply entering the market, advertisers spend shifting toward performance products, a truncated election cycle, and lower-than-expected podcast inventory. We expect this shift to also impact fourth-quarter ad revenue, and as a result, we are lowering our revenue guidance by $75 million. While we aren't happy with these near-term numbers, I want to reiterate our confidence in our advertising business and the long-term potential it has to support growth of the company. One of the biggest announcements from the past few months was our new exclusive agreement with Alex Cooper's Unwell. The podcast network, including its flagship Call Her Daddy, has strong resonance among millennials and Gen Z. We see enormous opportunity here to both bolster our ad offering, where we are already seeing positive momentum in the market with presenting sponsorships selling out quickly, and drive subscribers to SiriusXM with exclusive new programming from Alex and the entire Unwell Network coming early next year. We're proud to be home to so many powerful voices like Alex and a platform for important conversations across every topic and fandom. In the past six months, the sitting president, as well as both presidential candidates and their vice presidential nominees, appeared on SiriusXM Talk and podcast programming for exclusive in-depth conversations showcasing the power of our platform and the impact of our audience. News, politics, and sports are areas where live, up-to-the-minute content is critical, and we are the go-to audio destination for listeners who don't want to miss a moment. We are seeing double-digit percentage increases in news and politics programming, both in terms of the number of listeners and hours listened. This quarter, we launched new shows from former U.N. Ambassador Nikki Haley and rising political voice for Gen Z, Dylan Douglas, providing perspectives from both sides of the aisle. And with sports listenership rising quarter over quarter and the football season now underway, we've introduced new expert commentators into our lineup, including legendary football coaches Jimbo Fisher and Bill Belichick. As podcasting's role across our business continues to expand, this quarter we released a series of updates to our app focused on improving the podcast listener experience and enhancing discovery. These features allow us to better serve our current and future customers as we continue to see upticks in podcast listenership across both our core and growth audience segments. We also launched a new feature, which makes it seamless for in-car subscribers to download and sign into our app from the vehicle display, allowing them to easily access even more content and features such as on-demand. Over the last few weeks, we began scaling our new personalized customer journeys to the majority of our new and used car trialers. Initial results show these journeys are leading customers to listen at higher rates early in trial. In addition, our streaming journeys continue to evolve and are driving an increase in the number of days active in the first month for some key cohorts. All of these are key leading indicators for the business, and it will be critical for us to scale and sustain these increases throughout the trial and self-pay lifecycle in order to drive improvements in conversion, retention, and overall customer satisfaction. This quarter, we continued to expand our wholesale three-year subscription program with the addition of Toyota, and we now have nine OEMs participating. Early results for this initiative are encouraging, as dealers are showing interest in ordering vehicles with this added value feature. This program and additional automotive initiatives, such as expanded used car programs that help us identify and provide trials to new owners at point of sale, are driving subscriber performance, while some of our bigger picture initiatives ramp up. The same can be said of our Podcast Plus subscription in relation to our streaming subscribers, where positive momentum contributed to our sub-growth this quarter. As we look to build value with new customers, earlier this month we began to roll out our new in-car pricing and packaging structure. Now, pricing for both streaming only and in-car begins at $999, a compelling price that makes SiriusXM competitive with other audio subscriptions and a strong complimentary service for audio enthusiasts. For in-car subscribers, the $999 price point offers access to every one of our incredible music channels in the car and on the app, with the ability to purchase add-ons for sports, talk, and news, providing subscribers with more flexibility than ever before. We believe this will both attract listeners who may have been left behind by our premium price packages and allow us to move away from discounted pricing by enabling price-conscious subscribers to tailor the package to their interests and budget, instead of relying on short-term promotional packages. We've also been pushing more features and content into our plans, which help drive broader demand, reduce churn, and support future price adjustment. These updates provide expanded content, additional features, and greater accessibility across our most popular offerings. This includes access for all our subscribers to artist stations, allowing for greater personalization to be enjoyed by all, and the ability for platinum subscribers to stream on up to three devices simultaneously, which should help introduce new listeners within families. as younger generations take advantage of their parents' subscriptions and become fans themselves. And in an effort to continue providing even more value to our Platinum customers, as well as win-back subscribers who did not convert, we launched the next phase of our Walmart collaboration this quarter, giving six months of their Walmart Plus service to our customers at no cost. Walmart will also be providing extended trials of SiriusXM to their customers, And this month, we announced a new agreement with ESPN Plus to provide extended trials of each service, highlighting the sports prowess of both brands to dedicated fans. Switching gears to our advertising business, as noted, several factors are impacting our digital audio ad business in the second half. We are responding by investing in our ad tech stack and pursuing collaborations with industry leaders where we can offer better targeting and measurement, such as our new agreement with LiveRamp, which enables a first-to-market data cleanroom for audio for Group M clients. And within podcasting, recent agreements with Unwell and SmartList are opening up new opportunities and inventory. Across the board, we are committed to maintaining our financial strength with ongoing business optimizations. We are advancing scalable AI and automation tools across our business, and our AI customer agent work is already exceeding our expectations. Additionally, this quarter we opened our Irish Technology Center, which will allow us to manage our product and technology investments in a tax-efficient, business-minded way. In closing, we remain focused and disciplined in our approach to continuing our long-term financial success and putting ourselves on a path for both subscriber and free cash flow growth. We are spearheading rapid initiatives each quarter to capture demand and retain our base. Simultaneously, we are building long-term solutions to enhance our value and drive sustainable growth. With subscriber growth for the quarter, consumer excitement around our exclusive programming, and new features and pricing now in market, we are excited about the opportunity ahead. And now I will pass the call over to Tom to share more on the financials.