SiriusXM Holdings Inc.

Welcome to SiriusXM's second quarter 2026 earnings call. If anyone today should require operator assistance, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jennifer DeGrazia, Senior Vice President of Investor Relations.

Thank you and good morning, everyone. Welcome to SiriusXM's second quarter 2026 earnings call. Today's discussion will include prepared remarks from Jennifer Witz, our Chief Executive Officer, and Zach Coghlan, our Chief Financial Officer. Following their comments, we will open the call for questions. Joining us for the Q&A portion are Scott Greenstein, our President and Chief Content Officer, and Scott Walker, our Chief Advertising Revenue Officer. I would like to remind everyone that certain statements made during the call may 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. Additionally, we have posted a supplementary earnings presentation and trending schedule on our investor relations website for your convenience. And to provide an opportunity for as many analysts as possible to participate during the Q&A portion of the call, we ask that you please limit yourself to no more than two questions. With that, I'll turn the call over to Jennifer.

Good morning, everyone, and thank you for joining us today. As we reach the midpoint of 2026, our strategy is clear and our solid execution is delivering results. We remain focused on advancing the three strategic priorities we established in December 2024, strengthening our subscription business through exceptional in-car listening experiences, accelerating the growth of our advertising business, and leveraging the scale of the SiriusXM portfolio to drive greater efficiency and long-term shareholder value. What gives us confidence today isn't simply the financial performance we delivered this quarter. It's that we're seeing tangible evidence our strategy is creating an even more durable business. We're building deeper subscriber relationships, expanding monetization opportunities, improving operating efficiency, and reinforcing competitive advantages that we believe will support sustainable long-term growth. In the second quarter, we return to positive net subscriber additions increased ARPU and achieved the lowest churn in SiriusXM's history, supporting 1% growth in revenue. Our continued focus on efficiency also drove further margin expansion, and as a result, adjusted EBITDA grew 3% and free cash flow increased 48% year-over-year, demonstrating our ability to convert disciplined execution into stronger financial performance. Reflecting the strength of our first-half performance, and our confidence in the business, we're raising our full year 2026 guidance for revenue, adjusted EBITDA and free cash flow by $25 million each. Before Zach reviews our financial results in more detail, I'd like to highlight a few areas where we are seeing solid execution. Starting with our subscription business, we delivered our strongest second quarter subscriber performance in four years with self-pay net additions of $22,000. Companion plans, continuous service, and extended duration automotive dealer programs all contributed meaningfully, helping offset slightly lower conversion rates. Our confidence in companion plans continues to grow, and we're thoughtfully expanding the program where we see the greatest strategic value. It's strengthening retention, customer satisfaction, and revenue, while incremental customer relationships continue to more than offset limited ARPU dilution and modest cannibalization. At the same time, we're becoming more disciplined in promotional acquisition, reducing discounting to improve subscriber quality and strengthen long-term economics. While these actions may temper near-term net additions, they position us to generate higher lifetime value and more durable growth. Looking to the second half of the year, subscriber trends will reflect a different seasonal pattern than investors have historically seen. Beginning in the fourth quarter, the year-over-year benefit from continuous service will begin to normalize as we anniversary its rollout, resulting in more challenging retention comparisons. Combined with our disciplined acquisition strategy, we continue to expect modestly lower full-year self-paid net additions. The benefits of this approach are already evident. Continuous service helped drive self-pay churn to approximately 1.4% during the quarter, while underlying churn also improved year-over-year independent of this initiative driven by lower vehicle-related and non-pay churns. combined with continued ARPU growth, these results demonstrate we're building a more resilient subscription business with pricing durability and higher long-term customer value. We remain focused on broadening how customers experience SiriusXM. connecting them with more of the music, sports, news, talk, and entertainment that matters most to them across more devices, more listening moments, and more members of their household to deliver a more personalized, engaging experience that strengthens retention and becomes increasingly essential over time. Exclusive content and unforgettable live experiences have always set SiriusXM apart. And in the second quarter, we continued to build on that advantage. Every new channel, artist performance, live event, and creator collaboration advances our vision for the future of audio, making SiriusXM a home for fandom. In Q2, we expanded our Artist First programming with new full-time channels from Morgan Wallen and Green Day, alongside limited-run offerings including The Eagles, U2, and Miles Davis Radio. We also continued bringing fans closer to the artists they love through one-of-a-kind SiriusXM-only events, including performances by Kenny Chesney, Hilary Duff, the Black Crows and Whiskey Myers, a live SmartList taping, and a special FIFA World Cup performance by Carlos Vives. Our Front Row series complemented these experiences by bringing audiences closer to the biggest moments in entertainment with special conversations featuring the cast of The Devil Wears Prada 2 and Toy Story 5, along with an intimate album preview with Olivia Rodrigo on Hits 1. Across news, talk, and podcasts, we're strengthening our portfolio of trusted voices and compelling storytelling. We expanded our partnership with ABC News by launching the ABC News Live and 2020 True Crime Channels while bringing This Week with George Stephanopoulos and Start Here Weekend to POTUS. We also welcomed the John Kasich Show and hosted Vice President J.D. Vance on the Megyn Kelly Show, underscoring our commitment to thoughtful conversations and diverse perspectives across the political spectrum. In podcasts, we renewed partnerships with Comedy Bang Bang and the School of Greatness and announced A History of the United States in 100 Objects, a landmark original series produced with BBC Studios and the award-winning team behind 99% Invisible. Sports remains one of SiriusXM's most significant competitive advantages and an increasingly important driver of engagement. More subscribers are tuning in to sports than ever before, with sports streaming up 14% year over year and growing across every platform, including our expanding 360L audience. During the quarter, we delivered comprehensive coverage of the Masters, PGA Championship, U.S. Open, and every round of the NFL Draft and NBA Playoffs. We extended our long-standing NASCAR partnership, welcomed Giants all-star Logan Webb to MLB Network Radio and Kenny Beecham to SiriusXM NBA Radio and served as the audio home of the FIFA World Cup. We're also expanding our presence in one of the world's most passionate fan communities with the launch of WWE Radio. Together, these investments strengthen SiriusXM's position as the premier audio destination for sports fans. Building on that success, yesterday we announced Sports Pass, a new subscription designed specifically for today's always-on sports fans. It offers a simpler, more flexible way to access our industry-leading sports programming at a compelling price point, making our unmatched sports offering accessible to even more fans. were complementing the launch with a new agreement with Odyssey, adding leading local sports stations from 22 major markets across the country and giving listeners seamless access to both national coverage and the hometown voices they care about most, further strengthening the value of our sports offerings and broader subscription portfolio. Collectively, these initiatives represent far more than programming investments. They reflect our conviction that the future of media belongs to companies that create enduring relationships with audiences. Our approach is built around a powerful flywheel. Exclusive access drives participation, participation builds community, Community deepens loyalty, loyalty fuels growth, and growth creates new opportunities to deliver even more exclusive content, experiences, and access. SiriusXM is uniquely positioned to lead because we combine premium talent, passionate fan communities, immersive live events, first-party audience intelligence, and SiriusXM Media's unmatched cross-platform reach in ways few others can replicate. Ultimately, we're transforming listening into belonging. We're already seeing the strategy deliver measurable impact. This year, we'll produce more than 400 live events, generating over 2,000 hours of original programming and more than 3 million sweepstakes entries for free access to these events and other major artist tours. 95% of those who attend our exclusive events say the experiences increase the value of their SiriusXM subscription. And perhaps more importantly, these experiences deepen engagement well beyond those who attend. That's the power of fandom, bringing listeners closer to the people and moments they love while creating a stronger, more differentiated SiriusXM. Creating deeper fan connections isn't just about the content we offer. It's also about how we deliver it. As 360L expands across nearly every major OEM lineup, we're creating a more intelligent, personalized in-car experience that makes it easier for subscribers to discover and enjoy the content they love. We're seeing meaningful adoption of these capabilities. OEM subscribers now average approximately 24 hours of listening each month, while those who also stream through the SiriusXM app engage more than twice as much. Discovery is also accelerating with listening through our personalized artist stations increasing 50% year over year. When you combine exclusive content, immersive experiences, and a more intelligent product, you create a subscription service that's more valuable to customers, easier to monetize, and better positioned for long-term growth. The same strategy that's bringing fans closer to the content and creators they love is driving momentum across our advertising business, where revenue increased 5% year over year to $454 million. Our open ecosystem approach and strategic investments in advertising technology continue to cement our position as a leader in audio advertising. Partnerships with major players such as YouTube, Apple and Amazon significantly extend our addressable reach, increasing monetization opportunities and giving marketers access to premium inventory with the ease and targeting capabilities businesses need to invest with confidence. At the same time, our differentiated portfolio of podcast, sports, and live talk programming continues to drive demand. Podcasting revenue grew 30% year over year, driven by rising CPM, increased sell-through, and an ongoing appetite for our culture-defining content. During the FIFA World Cup, for example, we leveraged our coverage across satellite, streaming, and podcasts, to create spoke sponsorship packages for major brands including Bank of America, Lowe's, Verizon, Xfinity, and McDonald's, demonstrating how our premium audio lineup and cross-platform capabilities create value for both content partners and advertisers. Finally, the successful launch of SiriusXM 11 at the end of June advanced our next-generation satellite fleet and reinforced the long-term resilience of our network. Investments like these ensure we continue delivering the premium, reliable in-car experience that remains a key competitive advantage for SiriusXM. Taken together, these investments are creating a stronger SiriusXM, one with healthier subscription economics, a faster-growing advertising platform, and durable competitive advantages that position us for long-term growth. We're encouraged by our execution, confident in our strategy, and focused on creating sustainable long-term value for our listeners, partners, and shareholders. Before I turn the call over to Zach for more detail on our financial results, I'd like to acknowledge that we announced this morning that Wayne Thorsen has decided to leave the company. We appreciate Wayne's many contributions to SiriusXM and thank him for his service. We wish him all the best in his future endeavors.