SiriusXM Holdings Inc.

Greetings. Welcome to the SiriusXM fourth quarter and full year 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 anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Hooper Stevens, Senior Vice President of Investor Relations and Finance. Thank you, Hooper. You may begin.

Thank you and good morning, everyone. Welcome to SiriusXM's fourth quarter and full year 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 dependent 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 Series 6M'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 to our investor relations website for your convenience. With that, I'll hand the call over to Jennifer.

Thank you, Hooper, and good morning, everyone. SiriusXM had a strong fourth quarter to cap off 2024. entering 2025 with a focused strategy, clear goals, and defined path to addressing both the challenges and opportunities ahead. For 2024, SiriusXM delivered on our public guidance with $8.7 billion in total revenue, $2.73 billion in adjusted EBITDA, and just over $1 billion in free cash flow. Additionally, we achieved significant subscriber improvements year over year, driven by a strong back half, with better than expected metrics across both acquisition and churn. Our offering remains unmatched in the market, and our dedicated subscriber base continues to choose our service to soundtrack their day. As we announced in December, we have sharpened our strategic focus on SiriusXM's strengths and differentiators, with an emphasis on robust margins, free cash flow generation, and capital returns. While we are still in early stages, we have already made progress across each of our key areas as we look to continue to enhance our subscription offering, leverage the strength of our ad business, and accelerate efficiencies and optimization across the organization and our cost structure. Let's begin with our subscription business. where we are doubling down on our core automotive segment. We added approximately 150,000 self-pay subscribers in the fourth quarter and ended the year down less than 300,000, a significant improvement over 2023. Our three-year OEM subscription program is gaining momentum with tens of thousands of equipped vehicles sold in 2024 with a three-year plan. And the launch of our service in Tesla and Rivian models in December, leveraging our newest 360L technology in a streaming-only implementation, allowed us to quickly scale to over 2 million vehicles already on the road. In 2025, we'll be making adjustments that will both allow for a more seamless customer experience and improve the overall health of our business in the long term. These include improvements in online customer engagement, such as click-to-cancel, and a reduction in marketing to higher cost, higher-churn audiences, as well as shortened introductory offers immediately following automotive trials and new lower-priced package options. While we expect some of these changes will have one-time impacts on our subscriber results, particularly in the first half of this year, we believe these actions will allow us to improve customer satisfaction, maintain our strong cash generation, and support the continued long-term health of the business. Apart from these shifts, we would expect our subscriber results in 2025 to be slightly better than what we saw in 2024. Streaming remains critical to our future as we look to expand reach and engagement for our core subscribers who increasingly consume SiriusXM content both in and outside the car. Between 360L, which will account for roughly half of our new car trials this year, and the recent Tesla and Rivian launches, which are IP implementations, streaming plays an increasing role for our business in the vehicle. As an extension of this, we are developing features and technology for our digital products, such as the in-app channel guide, to function as a companion to our in-car offering and better serve the 90% of customers who use our embedded service. Following the launch of our new app, we saw streaming listening steadily increase throughout the year, reaching a high in December. We're seeing strong engagement with the added features that streaming, both in select 360L vehicles as well as in-app, allows our subscribers to enjoy. This includes our extra channels, where we continue to see lift in weekly in-app listenership, up 36% in Q4 year-over-year, as well as audio on demand, including podcasts, which achieved significant double-digit growth across both platforms. And with an average of just under two listeners per subscription, The app not only offers a way to extend listening outside of the car, it allows multiple members of a household to enjoy our service at the same time, delivering even more value to our core subscriber base. But of course, premium, exclusive, curated content remains the heart of our business, and we are focusing our investments in this area on talent and collaborations that resonate with passionate audio consumers. Sports, for example, remains a major differentiator for us, and we were pleased to continue to welcome new expert commentators across golf, tennis, football, and more in the past few months in support of our live play-by-play rights. We also recently added more live event coverage by signing an agreement to broadcast matches from TGL, the new primetime golf league led by Tiger Woods and Rory McIlroy. Within music, we're continuing to deliver the unique curated experiences our subscribers love. This quarter, we added to our subscriber favorite seasonal holiday lineup with an all-new channel led by Jimmy Fallon, and we launched How's Life, a new interview series from John Mayer. John's channel, curated not by genre but by mood, time of day, and the artist's own ever-evolving interest in musical taste, is a great example of the way our service allows fans to connect with the musicians they love in an entirely new way. At the intersection of music, talk, and podcasting, earlier this week, we announced two new channels as part of our agreement with Alex Cooper and the Unwell Network. Featuring live shows and curated music, these channels are a great example of how we can leverage the massive reach of a podcast such as Call Her Daddy to drive interest to SiriusXM with programming exclusive to our service. Podcasting is also key to how we leverage the strength of our advertising business. In addition to the launch of our agreement with Unwell and continued momentum around SmartList, in Q4, we extended and expanded our relationship with Mel Robbins and kicked off with Rotten Mango creator Stephanie Hsu. And earlier this month, we announced a new podcast from sports commentator Katie Nolan, as well as an advertising and distribution agreement with Fantasy Footballers, allowing us to increase our share of the ad dollars flowing into sports media today. The expansion of our podcast network in 2024, combined with our strong streaming footprint, solidifies our position as the number one digital ad-supported audio player in North America and enables us to tap into the demand we're seeing from the market in 2025 with more and more advertisers both entering the space and increasing their investment. Throughout 2024, we onboarded a variety of new advertisers into podcasting, and now have more than 80% of our top clients investing in podcasting, leading to 24% year-over-year growth in podcasting overall in Q4 2024, meaningfully contributing to the total 2024 ad sales revenue of $1.8 billion. Our open ecosystem approach supports both creators and advertisers who want to reach fans across all platforms, with more of our deals also beginning to incorporate social and video. And within ad tech where ads with platform revenue was up 18% year over year in 2024, we are not only welcoming more publishers into our marketplace. We are also seeing key measurement and technology leaders put an emphasis on audio in 2025 as an area of opportunity, addressing the gap between time spent and media investment. Turning now to another key element of our strategy, increasing efficiency across the entire business. In addition to the focus on our core audience with regards to both our marketing and content spend, we are right-sizing our product and technology costs following a period of high investment, optimizing our organizational structure, and are working diligently to achieve the additional target of $200 million in annualized savings as we exit 2025. Tom will speak to these initiatives in greater detail in a moment. As we noted in December, our 2025 guidance reflects the underlying strength of our platform, our increased strategic focus on our differentiators, and the actions we are taking to maximize efficiencies, all of which will drive improved free cash flow. It also accounts for the short-term impact of the changes we are making to the subscriber business, as well as the broader work we are doing to improve the long-term health of the business. Helping us achieve our goals is Wayne Thorson, our new Chief Operating Officer, who is now overseeing both our product and technology group as well as key commercial functions. Most recently Chief Business Officer of ADT, Wayne has incredible experience leading thoughtful and swift change. By unifying these areas of our business, we are ensuring a more rigorous ROI-based approach to all current and new initiatives and will more quickly execute upon updates to our business that will drive subscriber results. You should expect to hear from Wayne on our next earnings call. We remain steadfast in our belief that our offering, from our exclusive content to our leading in-car position, holds a unique and valuable place in the broader entertainment ecosystem. By sharpening our focus, we are bolstering the overall strength of our business in the long term while continuing to deliver for both our listeners and our stockholders. I will now turn it over to Tom.