Cost basis and return based on previous market day close. https://buff.ly/41pw0RC . Witz noted however that their financial metrics exceeded their expectations for the year, and it was enough for the company to raise its financial guidance for full-year earnings from $2.7 billion to approximately $2.75 billion. Thank you. The Motley Fool has no position in any of the stocks mentioned. In closing, I would also like to thank Sean for making this transition as seamless as possible. SEE INFOTAINMENT DETAILS SIRIUSXM TRAVEL LINK And we do expect auto sales to continue to grow. With upwards of a thousand hours of DVR space and multiple simultaneous streams available, youll never miss a game. Although we continue to be cautious about the overall ad sales market, we still see tailwinds in podcasting. And we're up about 9 points from 2019 to 2022. Sirius XM's guidance implies that its self-pay subscriber count will decline this year. Our next question is from the line of Steven Cahall with Wells Fargo. Our next question comes from the line of Barton Crockett with Rosenblatt Securities. The advertising market has also been in a slump since recessionary fears began heightening. And returning this fall, Let's Go, hosted by Tom Brady, Larry Fitzgerald, and Jim Gray, will be available first to our subscribers, then on-demand exclusively in our app. Harts podcasts will continue to air on satellite radio prior to their release as a podcast, and Hartbeat will also produce broadcast-specific content. Today, we'll have prepared remarks from Jennifer Witz, our chief executive officer; Sean Sullivan, our chief financial officer; and Tom Barry, who will assume the position of CFO tomorrow. We're a platform that helps consumers choose the best streaming service for them through our content, resources, and tools for navigating the streaming landscape. Putting all this together, adjusted EBITDA of $625 million was down 9% over the prior year. And I kind of apologize for the question, but I can't resist. We expect this margin to trend favorably for the remainder of the year. We ended the quarter with a leverage at 3.4 times, which is within our targeted range of low to mid-threes. Sirius is getting a cut of the $ from those ads on the radio. Youve certainly been very tolerant of views on all sides of the spectrum. And it's key to not only lift and conversion but also improved retention. SIRI earnings call for the period ending March 31, 2023. And the competitive challenges we have are easily solved with 360L and the new platform that we're launching, and we are starting to see that already in some of our numbers. The Rob Carson Show Podcast. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. We are confident that the upgrade will boost engagement and customer satisfaction for indoor and streaming only customers alike, she said. What are you guys seeing among OEMs in terms of their positioning around third-party interfaces on the DASH versus their own? So I think the impact of OEM prepaid revenue should slowdown in terms of how its flowing through ARPU over time. I will start on advertising and hand it over to Scott on your second question. On the used car market, just to start with that, the used car sales were actually pretty strong in the first couple of months of the year. At this time, well be conducting a question-and-answer session. How sizable of a trial acquisition funnel you think that could become over the next few years? Sirius XM (SIRI) Q4 2022 Earnings Call Transcript, U.S. Money Supply Is Doing Something It Hasn't Done in 90 Years, and It May Signal a Big Move for Stocks, Why I Refuse to Chase the Maximum Social Security Benefit, A Bull Market Is Coming: 3 Stocks to Buy Without Hesitation, 1 Trillion-Dollar Growth Stock Down 28% You'll Regret Not Buying on the Dip, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Start watching with a free trial. A connected car offers cheaper alternatives. At this time all participants are in a listen-only mode. But SiriusXM has their own ad-revenue on those news shows. And 360L brings a lot of those features to life. Thanks everybody for participating today. Competition is maybe a bit higher now. SiriusXM bought Conan OBriens Team Coco last year in a $150 million deal that also included a five-year talent agreement for Team Coco staff to collaborate on content, including the new satellite Do not get confused with these three mediums. These collaborations demonstrate our strategy of inviting people to experience Sirius XM in the way that suits them best. Generally, the expectation was modestly negative. Technically speaking, Newsmax is not available on SiriusXM, so you will not find their programs on any channel. Thanks Matt. I will now turn the call over to Sean for some brief remarks, and then Tom will go through the financials in more detail. Pandoras ad hours were 2.59 billion, declined just 4% year-over-year as hours per active users climbed 4.5% with 21 hours per month. SiriusXM has announced that Howard Stern will bring his show to Miami to officially open its newest broadcast complex. Image source: The Motley Fool. Self-pay subscribers decreased by 347,000 during Q1 as a result of fourth quarter declines in trial starts for new and used vehicles, reduced marketing spend, and seasonally higher churn typically seen in the first quarter. Thank you, and good morning, everyone. And in March, we started to see that tail off a little bit. WebSiriusXM delivers a broad range of information directly to your cars navigation system. Read our full review of Fubo TV and visit our TV guide to Fubo TV to find out what you can watch right now. It'd be great to maybe hear how you're thinking more broadly about leveraging capital allocation. So younger generations, in particular, are looking for more opportunities to control is nay experience. And then we just have these solutions in market for advertisers to come in and either buy across our network on an audience basis or by show level and even custom integrations. And we will continue to be active in generating trials. It's definitely possible to watch Newsmax TV on your Roku device, be it a streaming stick or actual Roku TV. So I wouldnt expect to see major changes in our streaming net adds until after that. And while we may in fact be a potential or logical home for anybody that fits into those voices. Get your subscription for $40 per month and get access to Newsmax TV and others, like Bloomberg, BBC America, and Cheddar Business. Have an iPhone? They will improve over the course of the year as will overall total net adds. Our final question is from the line of Matthew Harrigan with The Benchmark Company. And then secondly, its a bit of a more of a press question than an analyst question, its probably definitely falls into the diverse preferences of listeners buckets. Okay, James, Ill go first. We advise listeners to not rely unduly on forward-looking statements and disclaim any intent or obligation to update them. And we are starting to see that already in some of our numbers. Thanks, Matt. Sirius XM is trading for less than 12 times trailing earnings. Sure. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. ET. Podcast ad revenue jumped 34% during the first quarter compared to a year ago. We are making significant progress in rolling out our 360L platform and expect to exit 2023 with nearly 40% of new car trials including 360L. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Just help us think about bridging the Q1 losses towards better numbers in the back half between those two subscriber bases, if you would? discussions about both actual results and adjusted results. With strong similarities between talk radio and podcast, we can do more to seamlessly integrate them across our service and provide more control and discoverability for our subscribers. Partnership is sort of an untapped opportunity. I would expect the second half to be positive and that sort of nets us out to the modestly negative. So its like anything else. And it's driven a lot by the programming additions that we've made and the streaming access. We were up about 9 points from 2019 to 2022. And secondly, we look at the totality of the package between the talent, the issues that allow them to be freed to negotiate and other things. So with that, let's jump right into it. The focus comes as advertising has more attention at SiriusXM, despite an ad market that is presenting challenges for most other companies. And programming and content expenses climbed 6% due to increased licensing fee and production costs. Good morning, everyone. So one of the things we're most proud of is what you alluded to, the true diversity of voices we have on the platform, and basically letting our subscribers and listeners and trialers decide what they want to listen to at any given moment. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. And please let me add my welcome to Tom Berry, who may be new to this call, but is a veteran of Sirius XM and its finance organization since 2009. With strong similarities between talk radio and podcasts, we can do more to seamlessly integrate them across our service and provide more control and discoverability for subscribers, Witz said Thursday. Sirius XM shares hit a new seven-year low last month. We advise listeners to not rely unduly on forward-looking statements and disclaim any intent or obligation to update them. Our total new and used car penetration rate was 80% and 55%, respectively and our enabled fleet stands at about 154 million vehicles. Sure. It has been a real pleasure to serve this company, its talented employees and our shareholders as CFO these past 2.5 years. This will conclude todays conference. And right now, we're certainly seeing significant take-up in Android Automotive operating system, the integrated software from Google. This decline of 114 million is principally the result of increased satellite CapEx of 103 million as we invest in the construction at SXM-11 and SXM-12 and a one-time severance payment of approximately $15 million related to our cost optimization strategy. Our Q1 results were better than we expected, certainly based on where trends were heading in December or January, we had a really solid quarter with ad revenue down just 2%. Our next question is from the line of Steven Cahall with Wells Fargo. We increased the number of women's games we deliver to our subscribers to almost 800 broadcasts, doubling from the previous season. We are making significant progress in rolling out our 360L platform, and expect to exit 2023 with nearly 40% of new car trials, including 360L. WebThere are many ways to watch Newsmax TV without cable, including Sling, Fubo TV, or DirecTV Stream.. So your commentary on the intent to buy and the improving funnel sounds constructive. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. And I highlighted some of these metrics earlier, but we are seeing definitive increases in conversion rates for trialers, particularly younger trialers are using the features, but also just have 360L capable vehicles. I mean, the economy, we just had a soft GDP number, a couple of minutes ago. SiriusXM has announced that Howard Stern will bring his show to Miami to officially open its newest broadcast complex. We expected Q1 to be a low point in terms of net adds. I mean, what portion are coming in on that platform? Hey, great. And on that note, Tom if you could just give us an idea, your key priorities coming into the role, sort of whats at the top of the bullet point list on the whiteboard in your office? These collaborations demonstrate our strategy of inviting people to experience SiriusXM in the way that suits them best. Our strong distribution, investment in new product offerings, and our unmatched content offering that provided a foundation for future growth. Our extensive portfolio includes chart-topping podcasts by Earwolf and Team Coco and exclusive channels featuring A-list talent like Andy Cohen Inks and Conan OBrien. Over the next few years, 360L will continue to expand across OEMs including on select Mercedes-Benz models as part of an agreement that will increase the installation of Sirius XM to make it a standard feature on all Mercedes-Benz models available in the United States. Good morning, everyone. And just on the categories, its been continued improvement in travel, restaurants, casino, even automotive is coming back more, which makes sense and then softness in telecom and some financial services. So we look at this probably more often than not, but we spent a lot of time looking at this. WebIndeed, there is no Newsmax on Sirius XM since the corporation strives to keep its networks fair and independent. Transitioning from a one size fits all approach to a dynamic multi-channel individualized approach, well promote only heard hear moments and exclusive talent to drive subscriber conversions among their fans. In particular, what are the things that are going to allow for the streaming-only subscriber losses sort of moderate? If you're looking for the best way to stream Newsmax TV, Sling is our team's top pick. Sure. Now I listen to Transitioning from a one-size-fits-all approach to a dynamic multichannel individualized approach, we'll promote only heard-here moments and exclusive talent to drive subscriber conversions among their fans, no matter how or where they want to listen. The Motley Fool has a disclosure policy. Jennifer, could you talk a little bit about the subscriber outlook for the rest of the year? And then over the last few years, especially during COVID, there was a massive acceleration in the percentage of millennials buying cars. People find our way to our door and we consider a lot of factors before we make any decisions. Ben Swinburne -- Morgan Stanley -- Analyst. This new experience will emphasize simplicity and elegance provide more control and discoverability and drive greater consistency between in-car and streaming experiences better catering to our subscribers as they increasingly listen across devices. Sirius XM used to be a darling for speculators, screaming fans who would cheer its every uptick and downtick. Welcome to Sirius XMs First Quarter 2023 Operating and Financial Results Conference Call. Invest better with The Motley Fool. And the trends that we saw in Q1 in large part are reversing as we go through the year. So some OEMs will choose to pay for the trial and receive a higher subsidy. We havent changed the guidance on subscribers, so still expecting modestly negative for the year. But the streaming trial funnel, our challenge has not been trial generation, and we've put very distinct guardrails in place in how we're active and Performance Media in bringing trials into the funnel. Sure. Pause and rewind live radio. And were working closely with the OEMs and with Google as that rules out. Turning to our content, given the strong engagement we continue to see with our extra channels in and out of the car, in the first quarter, we expanded our focus here and launched several new hip-hop and R&B channels, we have seen the percentage of listeners consuming these genres more than double versus a year ago, driven by younger audiences who value the more controlled listening experience. The majority of our trial funnel as you would expect, is represented by the millions of trial starts that we do every year through our automotive partners. What do you see as the right leverage profile, the right mix of capital returns? [Operator Instructions] Please note this conference is being recorded. We see significant in-car conversion improvements when trialers engage with features that enable more control and discovery including our more targeted extra channels, Pandora artist stations and enhanced recommendations. We do expect to see future quarter-over-quarter progress in self-pay net adds, but we still anticipate being modestly negative for the full year in aggregate. Just subscribe to Sling, Fubo TV, or DirecTV Stream to get Newsmax TV on Android phones. While this is a great indicator of whats to come, these features are currently only available in a limited number of 360L enabled vehicles, and awareness of these features is still low. For more information about those risks and uncertainties, please view SiriusXM's SEC filings and today's earnings release. Podcast And Satellite Radio Businesses Will Be More Closely Aligned, SiriusXM CEO Says. Sirius XM offers superior reception. And podcasting continues to be a bright spot. Devices supported by Sling include: web browsers, Android, iOS, Amazon Fire, Roku, Chromecast, Apple TV, LG/Samsung Smart TVs, and Xbox One. SIRI earnings call for the period ending March 31, 2023. But we are actually holding back largely until the launch of the new platform, which is in the fourth quarter. So with that, lets jump right into it. I'm glad you extended your tenure in the media industry here. And podcasting continues to be a bright spot. Thanks, Matt. So some OEMs will choose to pay for the trial and receive a higher subsidy and obviously, there's the impact of revenue share as well. With a huge number of subscription plans covering every conceivable way to get entertained, Sirius XM is one of the best entertainment platforms around for sure. First, Sean, good luck. This gives us a general idea of the trajectory and the scope of spending. ET. Steven Cahall -- Wells Fargo Securities -- Analyst. Tom Barry -- Incoming Chief Financial Officer. And we're working closely with the OEMs and with Google is that rolls out, the majority of OEMs have either announced or in process of moving toward that operating system. In this past month, we have all worked together to ensure a smooth transition. And while that growth will continue, it's actually come down to more normalized level at this point. Great. While the exact timing of construction milestone payments can inevitably shift, this gives us a general idea of the trajectory and the scope of spending. So we look at this probably more often than not, but we spend a lot of time looking at this. Because this typical seasonality of our business in terms of receipts versus expenditures, combined with the timing of our capital expenditures we expect to produce a meaningful portion of 2023's free cash flow later in the year. We have seen the percentage of listeners consuming these genres more than double versus a year ago, driven by younger audiences who value the more controlled listening experience. I look forward to leveraging my experience of leading the Sirius XM controllers team to more broadly work with operations and the leadership team who shaped the companys long-term direction. Certainly, theres still uncertainty in the second half I think, but we are hopeful that the market will continue to recover. Or search "Newsmax" on your favorite podcast platform. Greg and guests discuss politics and news of the day. Pandora was supposed to be a catalyst for growth, a digital escape hatch the moment that satellite radio would prove transitory and eventually obsolete. Or is there anything different that you can talk to at this point? Our extensive portfolio includes chart-topping podcast by EarWolf and Team Cocoa and exclusive channels featuring A-list talents like Andy Cohen, [Inaudible], and Conan O'Brien. And that is because we're addressing these pain points. SiriusXM cut its sales and marketing costs by 17% during the first three months of the year, as Witz said they have decided to delay advertising efforts in anticipation of product improvements they are launching later this year. Moving forward, we value a strong balance sheet that provides us with flexibility to navigate a variety of future environments, and our goal, of course, is to continue a discipline and thoughtful approach to capital return. James Ratcliffe -- Evercore ISI -- Analyst. Sirius XM reports its first-quarter results on Thursday morning. And then maybe the same question sort of on the in-car business, I think the trial starts are starting to improve. But we're not seeing any major changes in the market that I would highlight. Thanks, operator, Rob. Tags: Financials Pandora Radio SiriusXM. And then on to your question on streaming net adds, we did to some extent, weve gone through this hurdle of the reduced marketing spend we had in the fourth quarter, and now were operating at a much more efficient level and the cost to acquire trials has gone down, some of thats market conditions and some of that is more efficiently buying in specific channels. And I believe as we launch this platform, we will have more and more opportunities to better execute on that. Thank you, Ben. Greetings. Let's get into the best options for everyone. Welcome to SiriusXM's first quarter 2023 operating and financial results conference call. Thanks. [Operator instructions] Please note, this conference is being recorded. We also delivered better-than-expected ad revenue partly due to our leading self-service and programmatic solutions that are allowing us to capture close-end bookings, and I will address this more in a few minutes. Obviously, as we said to you at the year-end call that all of a lot of our free cash flow and a lot of our numbers will be coming in the second half of the year. Talk to you later. I also cancelled my SiriusXM as Fox News was the ONLY thing I listened to on that. This satellite capex spending will be in the $300 million range per year in 2023 and 2024, before declining to approximately $175 million in 2025, approximately $80 million in 2026, and approximately $20 million in 2027. Question on the new trends given the new Mercedes-Benz deal and some recent price increases, what are the impacts on ARPU in the near-term? Thank you. And please let me add my welcome to Tom Barry who may be new to this call but is a veteran of SiriusXM and its finance organization since 2009. Thanks, Hooper, and good morning, everyone. And once again, we saw the seasonally higher churn we tend to see in Q1. Entertainment Television, ESPNU, INSP, Science, FYI, MTV2: Music Television, BBC America, beIN Sports, CMT, and more. Well target leverage in the low to mid-3s in light of the macroeconomic factors. Barton Crockett -- Rosenblatt Securities -- Analyst. We also launched Fluency, a cultural practice, helping brands connect with young, diverse audiences in audio by providing insights to support campaigns and creative strategy. AAOS will roll out in small volumes initially but should grow materially to become the dominant OEM operating system, improving 360L adoption and feature parity along the way. Our team is working diligently to position us for success in the second half of 2023 and beyond. Against the splintering of sports rights in the video space, we offer incredible value as the one stop audio home for all major sports and its powering record engagement of this content. If youre coming to the end of that trial, youre making decisions on whether to keep the service. We ended the quarter with a leverage at 3.4 times, which is within our targeted range of low to mid threes. So Q1 was impacted, as we said, by lower fourth-quarter trials and then third quarter, but Q1 trials have been stronger -- were stronger than Q4. Scott, you want to? And just on the categories, it's been continued improvement in travel, restaurants, casino, even automotive is coming back more, which makes sense, and then softness in telecom and financial services. Invest better with The Motley Fool. Are you seeing any flux in terms of the categories that are participating or just kind of tailwinds for audio advertising even irrespective of the economy? Today, well have prepared remarks from Jennifer Witz, our Chief Executive Officer; Sean Sullivan, our Chief Financial Officer; and Tom Berry, who will assume the position of CFO tomorrow. Earnings of $0.07 a share would be a small step down from the $0.08 a share it clocked in with a year earlier. David Joyce -- Seaport Research Partners -- Analyst. And I believe that is a very strong proof point for what we can continue to drive and see when we launch this new platform that is going to support 360L, but also drive cross-listening in and out of the car and provide much more personalized listening experiences. Moving forward, we value a strong balance sheet that provides us with flexibility to navigate a variety of future environments. Some of that's market conditions and some of that is more efficiently buying and specific channels. A longtime Newsmax contributor, #1 rated radio host and successful columnist, Gerry Callahan calls it like he sees it and offers sharp commentary on the news of the day. It continues to be supported by the millions of trial starts we generate each quarter through our robust and long-term OEM partnerships. We are already beginning to see benefits from cost reductions implemented in Q1 across every element of our business. After all, the newsletter theyhave run for over a decade, Motley Fool Stock Advisor, has tripled the market.*. As we begin, I'd like to remind our listeners that today's call will include discussions about both actual results and adjusted results. Please proceed with your questions. And I guess what I wanted to ask about is just a follow-up on the subscriber progression here. In short, I am pleased with our financial performance this quarter, and I'm confident in our opportunity to expand our subscriber base as auto sales recover and relaunch the next-generation SiriusXM experience later this year. Entertainment Television, ESPNU, Freeform, FX, INSP, Science, MTV2: Music Television, Animal Planet, BBC America, beIN Sports, CMT, CNBC, Disney Junior, Discovery Life Channel, and more. Other channels on Fubo TV include: Hallmark Movies & Mysteries, TV Land, BET, Bravo, Comedy Central, Discovery Family Channel, E! WebPolitical news and talk from all sides with Julie Mason, Michael Smerconish, Dan Abrams, Laura Coates, and more. But my overall view is to work on obviously optimizing the business, support the growth of the business and position us for the year ahead.
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