SIRI - Earnings call transcript Q2 2018

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Operator

Good morning and welcome to SiriusXM's Second Quarter 2018 Results Conference Call. Today's conference is being recorded. A question-and-answer session will be conducted following the presentation. At this time, I would like to turn the call over to Hooper Stevens, Senior Vice President, Investor Relations and Finance. Mr. ahead. go please Stevens,

Hooper Stevens

CFO. good call. Welcome CEO, Today, David EVP joined and quarter be will Q&A conclusion your to call. portion SiriusXM's and earnings Content by and Senior of our questions. conference Jim management Frear, the morning, be you to also President take Officer, our everyone. the second glad be At Thank Meyer, will of Greenstein, available remarks, our Chief prepared will Scott for the our

or everyone methods remind might may or beliefs statements all to subject Act Such results incorrect and like are certain as statements that term call forward-looking and I'd imprecise. materially. differ First, These in forward-looking Reform the current during that based actual risks could they cause on Securities expectations that be the data and necessarily to and made uncertainties are of XXXX. Litigation statements to course, be forward-looking management's statements the is assumptions, defined of depend upon Private

For on about advise rely to SEC them. not SiriusXM's listeners disclaim to uncertainties, filings. unduly and more update please these statements intent or We and any obligation information forward-looking view risks

now I'd include the adjusted of listeners remind advise to today's results hand call results exclude results Meyer. that operating adjusted over Jim stock-based will begin, and I'll results. of we discussions As compensation. actual like both discussions to about our and All effects the

James E. Meyer

we the joining quarter ever than and team. for record quarter. thank us morning performing success long Good you are a as better and of second discuss Hooper. in to track Thanks, have SiriusXM's we continued today the

are better our a from the ringing keeping more vehicle successes, is our differentiated in quarter, and growth processes It candidly, performance is up content of plan. is us. X% auto for tailwind XX million results. and total as Wage The robust. you before, base we that Conversion see focus see and is There lowest impact I'll further continue be a and can self-pay improving many revenue a economy growth can than ever, growing also strong exceeded of continue we our get our else, improve, time We anything able increasing our our informing subscribers reached million to that ever are in last constantly ever benefits the endorsement self-pay our picking first and SAAR more this these we people offering. and continually XXXX was from pushing nearly all than proposition strong. up, into rate sales SiriusXM for our was data and achieve Despite was XX.X record subscribers, in million But a areas just a X.X%. execute which guidance quarter, improve, still a our result I'm the in I year. value of a Employment quarter self-pay to new decisions EBITDA. the second clearly without doubt, thrilled with With subscriber churn is, our and a subscribers XX.X million. performance in add X.X paid tight subscriber more operational and to bit. Self-pay second to strong. us

rates. higher extended OEM several agreements With Kia to OEMs typical, and our quarter, strengthen. additional we long-term right In our penetration and committing working quarters. Nissan for frankly, another years, we five we the are, And second remains to of OEM three these extensions. extensions, Our some on continue relationships as anticipate rate about and penetration at even is deepen

next penetration long-term and decade. of will our from moves approximately over penetration towards business to tailwind Our continues to car XX% the today as grow used provide new car a XX% growth plus

it at now by year. smaller our harder where X,XXX still here, but one XX,XXX of this can to quality trial are from improved. but we up offering improve independent better. I trials get We have distribution approximately of could room last here, trials We does think about time be as dealers. dealers, is is funnel the the And we these into very Growing important the areas execute move

part time As not at many on of of far that finding work, sale. activated cars lots have we our the properly field too are been used dealer

vehicles a time the before We customer to off are are properly investing drives more ensure resources and lot. that activated

We the in big over gains to will private see years. where also will our improve efforts working we coming keep penetration in the sale market

satellite but over Lane these We OEMs degree helps a all and multiple solvable, in connected are us. to frankly, are the and of the our strategic will consumer on second expand of continuing enhances well are and coming to in a is XXXL set, are Fiat Our hard challenges is significant the feature market aggressively our and to, I service advantage we the and of with those Service way. quarter, marriage launched thoroughly distribution stuff convert across third-party for the vastly year IP capabilities that we and XXXL platform, our organization schedule retain XXXL Distribution ability rollout convinced of terms new address Chrysler push vehicles am and key subscribers. and is this and both of many market underway. years. Quite this by fruit, next other in This beyond. efforts XXXL in work, bearing substantial more

improve. same data use our connected experience, listen more growing subscribers' they a our learning mobile crystal We personalized be our and return now new them our positive I our ability potential more transact to with existing and or and as This we Connectivity our customer can path it area me and and the reduce digitally. channel to in capacity. costs we and friction is and subscribers trial Let relevant still reduces by marketing beyond, car are experience help surface more make a handled clear. will even in our in on with content understand preferences, thrilling and and helps unlimited an devices. better that oh, take the understanding help watch behavior love will sharpen for by interesting retention customers. is also or And as The to And, vastly both it business. relationships that subscriber we up-selling. can way, have interactions other

area specifically we and are will told we launched user is come. our and convenience gives the OEMs and the app In iOS, us a has our connected and excellent service vehicle think and behalf consumers first points which relationships our strong climbing Stern. growth drive connected app Our the devices video live revenue from in building a security, the of units, with relationships to while been streaming easier is video Howard believe usage We for and ratings of double-digit and working functions, we this more The we would to connected are clear video you interface, provides our response generated future of But By the completely hosts talented end, on Streaming and ever, content, for our users another The substantial short one platforms. time. clear to guests. is OEMs, users more growing enhances and have very more XX%, Android Howard's app small service growth OEMs. hard in improve. part features safety, brings improved on-demand example search making audio will app time small show has to use, push by new stickier. This business, like richer of May, of years response stores. vehicle universe major will EBITDA. time, deepens and between just we engagement the our listening and It Amazon's my take The the direction now engagement with many by for exceeded and visibility the Sirius with a engagement. business, of enhanced and of in business of strong which discovery seeing video to than on that outside millions increased layer already of momentum by SiriusXM we make also of it our in to and and expectations redesigned vehicle we improved that vastly is improved Over growth subscriber time period with the value and and and to Alexa. complemented business, To seeing which plays the is car, technology touch far now, continue compared proposition in did.

experience without and a subscribers over the nice creators best and Today, plan. in-car to more media. with you launch service. connected agreement with we in SiriusXM on with am and be Last launched SiriusXM include streaming programming, full comedy create, It made business, because small a UX, with differentiator already are original potential optimistic will the can acquiring week, very smart by Fleetwood XX-foot country's content Comedy we have an important always, for Matthews as steadfastly and a content it we out-of-car on the a offer York we brought It's part We desire the comedy channels in-car arrangements, time City, are comedy of focus will music our and in most is or the on channel and platforms I distribution listeners Netflix channel. also improving winning our and will Theater. Los we need as content, top love from sports, such when to months, We we the last find. just pop to fun listeners UX our of launched bundle and on their the large developing user work the we Aldean who curate, at us The programming. audio. And a fueled bundle TVs. know talent portion number subscribers programming know are Over Beach devoted do for global Mac time, music, have best, right we of to their compelling, and see world-class our and our from entertainment, of Harlem's subscribers. the not for subscribers appealing plan few our marketing Boys, Apollo best approach to In in exclusive Mendes but that a Angeles, that as Jason very Band, our and Dave speaking as are busy, subscribers assets stars programming potential most focused Shawn diverse playing talk, have incomparable informative in of most can New want performance announced and be finding, programming all of major

live New and as festivals major We also such Ball. York broadcast Coachella, Governors Stagecoach from music City's

and Cup fans golf ride every step also biggest NFL Masters, and such to Norman, which sports recently access pro Indianapolis entrepreneur, a We During the we gave the the golfer the Crown. and events Draft, Triple on the added business. World focuses Justify's the the of new by quarter, to Greg XXX, as show

presence by slow on also of don't day. our the new White the adding We need veteran new SiriusXM's is our Knox, you I Correspondents' bolstered journalist, Correspondent on Good news Olivier news POTUS House that, President tell channel. Washington team as Olivier. never Chief also a Olivier our luck to Association. has

cash Despite this content we of cash in across performance paying and Our of of business settlement and subscribers of all as with the steady unique work deliver including media this service rates, business, royalties to of model, High substantially content $XXX with out new the our peak our billion of this conversion, all really trial our hard growing with proposition. at a combination, to payments low is investments flow Combining SoundExchange, and special. is And year. are high an churn attest. million keep a still and for a heart strong $X.X conversion growth. easy-to-use margins, rates great expect XX.X increased free the higher path this long-term million value record best winning music car we think, it and consistent evidence monetization, year, business satellites remains we a in and variable would to

you the as disciplined our to Needless return but further and second acquisitions very course, opportunistic still of quarter, evaluate capital increased investments, areas work team our be for said, later our and look targets. new, proud what of to that, to more exceptional we do our am say, I we With for and comfortable have continue year David. delivering I will to in We financial with operational forward to potential achieve higher accomplished much am to it very shareholders. turn and to year. That over I'll guidance this this results

David J. Frear

joining for thanks and everyone, morning, the Good Jim. call. Thanks,

quarter second X.X% the our XXXX rate testament fast of self-pay and quality are XXX,XXX to of the accelerated ever remarkable the demand a Our in and start with quarter self-pay to in the churn offering. net adds lowest

today, XX% Radios, of XX% As year million SiriusXM are XXX over from with the in roughly a ago. cars the of country enabled vehicles, up

many in as the proud we took hard of, the work vehicles focus enabled XXX growth the that this our XX% of we remains While years towards expect arc we're on decade. million next fleet over

in X.X about million, the of resulting sales in rate the it's which our X% quarter, are trial lifted of both XX% used million, XX% quarter, the stood total trial X.X growth highest funnel over million. over our total X.X highs, start was the to trial of X% line ever to in This been. grew while the of record X% New penetration car to end over trial expectations. new X.X to at At car while vehicle starts million, starts grew with

nets quarter base quarter to XXX,XXX XX,XXX second the trials million. the million. brought of XX.X in subscriber nets XXX,XXX self-pay resulting Total total in Our paid in base as self-pay declined paid the were XX.X a

guidance new which Solid remained contributed XXs million growth. approximately and X. self-pay we're additions. in in net high Based rates steady quarter revenue this to rates to $X.XX or full the our of to excluding X% recognition in XX% performance, and subscriber on the year quarter of effective ARPU conversion new taking used the self-pay $XX.XX up subscriber car grew X% car also the became headwind the X.XX January due standard

customer our increasing of effect the to in the was the of last exclude XX%, share expenses over a December's billing percentage addition than from year full $X.X accounting of quarter more accounting we're expenses of $X.X partially in as total or With our XX% revenue a new the billion. to the royalty revenue offsetting standard. year quarterly service higher down over X% the XX.X%, X% year strong in subscriber with half revenue strength guidance versus revenue continued under growth decision. growth, Contribution nearly growth the point belt, advertising margin CRB increased lower of of when more resulting quarter billion With our you second and revenue last than equipment and change to and

also in We SoundExchange litigation prior for we charges this settlement as longstanding periods. booked settled with to reserve

EBITDA to also P&L in and technologies the was rates from QX lower excluded The million from newer expense the due through second There roll SAC reductions than chipset cost installations production. quarter guidance. quarter small this decrease less is in hardware SAC totaled as in of install to of to XXXX the declined $XX. $XX we in per impact for which a continue subsidy volume automotive our adjusted OEM resulting

performance, of to $X.X inclusive I longstanding the the guidance. XXXX. payment free X% to billion. our flow a of XX.X% with MRF its of important As of early we this to running new up early was XX% in margin business to of increasing adjusted benefit in settlement flow year-over-year and prior guidance our the take that from enough grew $XXX the billion. to capital up versus Based $XX into cash note just business quarter. the million this stages million $XXX would third of onetime second remain converted feel expenditures generation to guidance guidance payment, the we In in paid $XX XX% quarter, $XX that benefit quarter, up quarter continue we period cash record quarter EBITDA margin this this about. a EBITDA stepping million in free relates and get flow approximately our adjusted related SoundExchange that an for EBITDA litigation cash adjusted free is of grows, to second achieving of in million, the even charge full-year It's SAC EBITDA talked was flow is as a full-year a of million, the and $XXX our cash guidance totaling confident our despite $XXX we X.X% But cash $X.XXX million in on revenue, to We produced confident with of approximately low. the million second Adjusted ahead be record revenue likely

by also change net the Pandora gain with quarter associated an Second in $XX income value was unrealized impacted of our million fair investment.

price. Our booked stock-based with second tax lower and and quarter because share benefits of a than first half rates rising XX% expected associated and were XX% respectively, comp

Our approximately long-term be further tax XX% should such absent rate benefit.

spent expect we paid million stockholders. cash million in the taxes debt and now to X.X nearly approximately In begin in We Total to to quarter, shares dividends XXXX. million paying $XX repurchase second $XX at billion bond times. our EBITDA million. our with just At until of adjusted stands had cash no the of three We maturities on $XX approximately XXXX. was to hand end $X.X debt August quarter, approximately federal

we facility Our investments, continue capacity in let's gives stockholders. of strategic invest ample operator, with up undrawn $X.XX our XXXX open to This which it and for a us business, to to is credit liquidity extended revolving completely billion. capital questions. recently to And return makes

Operator

At first open we'd from Jason this will with And questions. Citi. Bazinet come your time, like up call the for question to

Jason Boisvert Bazinet

question. the for much so Thanks

back, model bought on years could to I a guys bit up four just was a what's wondering you only to or good relatively quarter. me our have was just buyback that time years think, You low the if less. The the in to that. when provide five go you thing little relative stood had to our I of really model. I in color

David J. Frear

these a and we – I problem. the there had bought what the revised passing we a places the we lot between it's we December honestly, in quarter And a the revised our reflect back the stock on kind of put about quarter. first-world you one the as of grid. with toughest call. again it went the tax talked performance, not tax into look, flatfooted. it's time of the that's is law yeah, that, we law ran through of have And had did big And it's the So, outstanding stock earnings it grid we caught the was of thing the – it we where second It's the the But exactly a mean, event run. of and grid stock change, into a stock time goes that and – yank just every grid, to performance the us things – that the in like

And so, We're thankful. in stock. we've had great performance

We continue is. stock to think is the that so it value good that's and what

Jason Boisvert Bazinet

Very helpful. you. Thank

Operator

Feldman And Brett your from Goldman next Sachs. will question with come

Brett Feldman

I've that going adjusted able a mean, forward? to that or price maybe now grid share you is up you're just communicate? to you to trying Actually actually were be on not to is question. active what on going the the more got follow have one, I where based

David J. Frear

to talked what basis with in won't that today. never do on going we're about We've buyback the we forward-looking past, do and a

Brett Feldman

of any the churn. interesting. then, can it, of of ebb a have you it as guess I note moves of quarter. down to enough. actually that's quarter to question. one and ebb in you quarter. know And understand that the down, if Fair standout was kind But exactly it's the it churn why Okay. would thoughts, positives metric I operating that easy and not durability always The did were And low be obviously installations flow and you the to why and from

just acquire these this of You in intentional kind wondering to directions that of much move quarter. any those have I'm as to if was things or don't if spend customers.

James E. Meyer

No.

the normal. said the it's well X.X%, I I so as I believe things are the believe clear in you asked of through I blocking not quarter hard are our X.X% can coming quarter And would between that as and continue look X%. into say you turnover puts it, performed new about will perform lots the a we've second the and new think, think to question hope in which And vehicles. work, to I'm as thinking it move you. and our over I continues led we'll remind don't be quarters. second building not goes. third performance always just we simple does should number in one include the overall to that turnover that fourth most well. improvement ready churn to blocks. I'd – normal. at those, that's the about And the the of with way the see mean said, is quarter that in our should improvements number see and I you one, tackling it increase that we asked quarter. the when there but to is we That you same and you think the how the as remember churn number that need flow performance by churn that of you you're and pressure to of as that of increase, lot

David J. Frear

number So two voluntary we've extraordinary It in of churn and non-pay at was was And the if before. quarter. would continues. be in things We've I'd it it prior seen X.X%. an calls just the talked which never it level great that under add about sort that

was of I a economy. that U.S. think part testimony to the the of health

X% wasn't were mentioned or X.X% I quarter. It think, only in the the you that very On like installations installations the down, front, much.

around all lower small. little The is cars contraction And a is, bit, in with associated an in of a in bit doesn't and to the have technologies contribute SAC. it the so that essence installations much fairly so, but it was Most do in the lower of bounce fact, the we SAC change-out sustainable. really little quarter in inventory

Brett Feldman

Thanks for color. Great. the

Operator

(USA) Hi. mostly your passing for like beat the Securities And with net Brian the looks - taking question. Credit we through quarter. LLC Thanks It was guidance raise now from will hear for Russo this Credit Suisse. Russo Brian Suisse adds

year you a kind that partners initially the OEM remainder I from getting the wanted have done before cautious it ways this are have first country to we year, on for sense better people go the optimism still for that the to seems of lot ask, the auto is Are sales your expected. half a a book the XXXX or written? So than in of of

James E. Meyer

So I is this think – Jim.

there capacity. one think I you their well – the will heard optimism of their say as booked know, and that's in is terms plans from of And we into they're we a build second I quite out automakers. far went the certainly when quarter, bit as pretty to lot work will and how know, noise, a trade where and out of go. you the quite knows no that front going on

Washington I of just And that modification so, a and you. have out. would Suisse are on see proposals LLC any Thank goes Securities no happen hard if record place. there of We'll me would Credit it auto Every I that me president's you to ask for there gauge? idea that that's what the where the (USA) trade in biggest things in Brian will put to say companies, frankly, Okay. I Russo are And are some company, I think, auto out is say, type the – - one. there. the

Operator

question And Ben come next our Swinburne from Stanley. Morgan with will

Benjamin Daniel Swinburne

people think increases expected half you're I'm love business you periods you versus have front. when I a it of experience impact customer first raising the guys realize than I'd had suggest been prices But But churn in met I on have that is or Hey, prices on is encouraging and satisfaction you looks to out one you've more around raise manage either your guys. wondering, extrapolate just to historically pricing power you've careful consumer going good to when the the more to raised seen as hear year prices. Jim, price this to you some today – and the morning, in maybe to could you've impact churn and not churn prior and like certainly what you've quarter. and know you guys

James E. Meyer

think CEO that be you, answered little group willing bold quarter. can in had to constantly you a much in with reaction to very reaction use second you've predict question. We I'm with barometer the I we I tell to who will me. I extremely a satisfied though, This year deal that to us candid you you, to MRF be I'm power how surprised who you increase we tell a saw. very little we the have I built than enough tell asked volatile. are And through appear in, Ben, the the I are stayed to more the So, that tell as service we with have you to not think, I was have with have. MRF fifth pricing and with will as certainly subscribers to large our subscribers of this very also disruption. increase

So, I got real testament a to tell value positive our and real a to you, it's proposition.

Benjamin Daniel Swinburne

ago a second used then to... And just we question, years

James E. Meyer

to continue really, Ben, that to going going we're cautious said, really be here forward.

Benjamin Daniel Swinburne

get I'm as you of don't what Understood. qualitatively what there. you're that now We don't at anymore. know, But ago just are much or doing, used to the sort was fourth and of obviously but strategically, car information moving a around be and deals very focused result We years are there results on partners, background I your least cycle these renewals curious, are these with which are maybe fifth OEM important to your your or as might agreements business? now the routine kind anything we that focused what what's in on, is see of incredibly in new,

James E. Meyer

put vehicles. a things of think their a four I've the for So, been to including it I here talk great radio in a enthusiasm And there. kind get hard in. the time them foremost, at their is beginning. headline, first about think – long biggest This and question. was satellite very there's to And to Probably, I sell

in is now automakers that think satellite feeling consumer pretty radio from the the are I pull vehicles. expected the significant an feature

these levels have don't there that increased those to And some We would as We'll I are my done indicating said agreements, of automakers so, our in penetration. certainly renewing continue some in who as we're are that. yet. interested be they comments, through work way

to fast heard our and frankly, that the is – very it's really would these best years ago, And reasons. include XMH all the you're to XXXL cost go was in the One, agreements, SAC OEMs, lower we help costs a best can commitments long-term ago, which we two each clearly lower what from experience we they this up-front commitment that of a in they is which understand comment David be that their new providing with finally, complete. then lower for XXXL. continue and That it's to customers. as as important that But transition our you is to Second, couple is pointed for David's transition them important and -- several the right and customer do importantly, our good moments then clearly speed what implementation. it now involves gain satisfaction how in That that of it's now finally and the renew out. That's and seeing customer. call OEMs that for platforms platforms. with And our new can platform and automakers be our

we're way. And all along I think to just things the tell you have positive very so, seeing I we're – seeing

Benjamin Daniel Swinburne

you much. Thank very

Operator

now And Cahall move to we will Steven RBC. with

Steven Cahall

Good morning. Yeah. Thank you.

quarter. a sub-ARPU both think then and disaggregate is year I little the I couple on half I digit your ARPU for a low had your really bit, the ARPU. little running percent, has ARPU question think strong, up and a been the down a bit ad just year-on-year So, If I double it's for of

those the or the on can you advertising ARPU And as pricing deflationary the has been you how you give looking? which are then subscriber Thank give driver color on other really really of that's been us flipside bit a business? us trends the see So strong, how some think strong aspect of you. to little model just could a and that's maybe you do color

David J. Frear

Sure.

So have accounting which change hit side, on the revenue subscriber we $X.XX. the did

adjust if growth have growth. good just time want digital on you retarded So long you for think know ad Scott, comment you just if something – is don't to you that I outside big now ad the revenue see. XX% the you And, off that different knocking guys, the right? revenue don't the guys and growth of have I trend, been the that And Because out, cover ball advertising $X.XX. ARPU a a it by in

Scott Andrew Greenstein

Yeah.

we But and opinion, sticky the and unique base a know, subscriber my a content be will to continue, ad advertise As very all the with over base. to. place to is That's providing all very in we're market desirable so. volatile

as more is silly sounds, and the and they're getting So discovered by more that community results. combination as I think ad being, it

But affect So, market lot subject there is we're happy are a right in that in. again, there with could things most they're position now, and us. out But there the definitely we're of but coming. the changes particular, ad like

Steven Cahall

advertising? in the us any give you has been of Could trend indication what pricing

James E. Meyer

give don't don't – I we that. think

We growth, everywhere. if really at revenue that. we're in haven't Obviously, look strength the clearly you discussed our seeing strength

David J. Frear

Yeah. It's just not more us. for spots

able rates. have secure in been We to increases

Scott Andrew Greenstein

and always can about focus primary a in Yeah. not a our spots never expense consumer on fit – we the in be few more It's will We're the of air. experience subscriber listening at experience.

Steven Cahall

Thank you.

Operator

from next America your Jessica of question Reif will with Bank come And Lynch. Merrill

Jessica Jean Reif Cohen

at currently far your Thank below Yeah. target is you. times. are leverage questions. One at three have you so three I

is X. I target the think

significant got free You've flow. cash

which is car. out you on about the plans services? – that clearly success you positive, mentioned, about kind other are how at talk iHeart, a you'll your Nation. maybe how and as bring with buyback, measure redefined finally, taken the about it charge of what the for that results sounds in You've market happen of talk about And a with added would rollout assets you will and speculation you've target you investment Can Thanks. already slowed Your how Live for Can now? talk stab that's to market Could value over. you your down other video been There's target company? a bit. big you then, talk businesses? can now Second, video has something your do like market

James E. Meyer

Jim. it's Jess, So

me Let with the start first question.

So we've I this time, been for talking about a long really clear. think I've been and

everything very capital basket need our what look the at to areas we nice a evaluate you generating think we our as I investing do with very, I in we which key that we're that I going of all we is what from we And, in business have think are business. believe we the are is to. when know,

Keep a First there by in speculation in a thrilled fair our we've I'm connected fit coming us. SiriusXM. and is Michael for member the a Labs, from Nation. amount moment. of some and prowl, ceased. a the is we as sure since going But of could of I Michael Automatic is ago, with Live -- invested It's vehicle good we things example now comment that I tell that not activity mind. look. that to board And around year quite SiriusXM. even way, business where on iHeart I'm in foremost, have other which Pandora. certainly on has to speak, and you, board. looking to we're growing Obviously, was from. and then a Rapino the will any continue that of don't have I'm I'm not that there back coming on comment

and But growing as assets both strong have, We Live Nation that's figure both have for out about our me, use we think, I Sirius to to and between cooperation business. how that we it. improve

a you, look I tell before believe told here I go leverage areas. has It's going disciplined declining. and very rush our We extremely for that our is shareholders. not I I've to strong do you just to am other me return don't continue But be as absolutely to out because at going to anything cause will

looking you way. that continue so, And and point that anything path we'll there add in to is on moving one? Dave, down want

David J. Frear

and people it's generate in attention, get kind for sort true publishing to of We of Yeah. community. any the need

or and down it's Paul sat has So up I is little seeing piece, a it's abducted for in they headlines dead aliens but headlines the candid morning research reality. to wake bit Sasquatch baby. out, There for all clear not going lots that could photos the don't or and get I like we supermarket of comment do see But me, into that have that are all somebody's acquisition. that with much put on and

James E. Meyer

Yeah.

absolutely I do. to capacity Jessica, And you on absolutely almost looking, that we --so we we'll this. your jump question ready And on returns, the do our we to anything prowl. to our everywhere tell meets believe are we answer how show I find know threshold, that's really on are On can up your something have to think We're the and exactly look. and we out-of-car, to when can focused So, we in how I'm we question second that. not do targeted yet. me, going want

It's to Meyer some strong. proof. and this before got someone four That's you, why. technology give is tell competition believe Everyone to our strong. you've printed It not and I strong. it. audio has. think it's gotten I outside what recently earnings I and only tell really said competition more us calls feel about I will vehicle for one is business said in acts And about I good said I future time that meant. that to you continue in I'll build What be will will vehicle. I the always be always been what always is always the like around

XXXL going initiatives investing out you, connectivity to but in how it the strong, Let we're what whatever it. about we and is to our somebody for in to always okay? because focus, important that do. sorry in early going for and money they're this battle our do allow all compelling of going And This and me to pay the be the am it. is in with willing on it's battle technology. content, been left experience, apps easy want investing intense are forward tell really and – hooked game is will us is about to money use and be of how and getting But most this to case I happy not our we we're the your word,

the be have. I couldn't more so opportunities about we And excited

be or something I channel to way in very subscribe ready, people over to our phone stream want home of hope you only on Howard to understand have who and beginning I at how this X with his their marry I'd can on you're I that's puts something, And think stream where the that one now mind more. quality from two. we figure will team. you it's out XX be conflicts you to could the we'll a tell that more to think I've succinct many I've months else way the their As product surprised and I hope to that service really liked been that hey, on device when honest plus behind on I've at the in But subscribers car. a to see out the to next when always tell you, was into my And like good know, months one put video, And clear, a there. independent focus, surprised I that our our test we're or you, we answer. especially of heard I create. says, also we're remarks, I going than We can to see been I with finally

you so, XXXX challenged us get team hear you'll I think from there. as And broaden should more we Scott's and here assume this, I've that to into significantly

Scott Andrew Greenstein

that political we and November other can be as in all look channels, it. our go right there could again there's with really presets that our we that our I all imagine to short Just complementary form, be to component or calls. news cut-ins of forward as I I that, in audio one of universe looking Jim in stress be now, video, within sports there may live sort area, and to there channels And appealing be now. the would with and Right stuff (XX:XX). thing I fun, content want And plenty things will a but in it's we're mean, earlier content whether real-time in that think whether follow-up on can be know said again, and has you that eventually,

James E. Meyer

it. that's So

Jessica Jean Reif Cohen

you. Thank Great.

Operator

And at we next Riley. Barton from final take question will our Crockett and B.

Barton Crockett

relative couple churn company ability for has your growing on subs impact Music, are self-pay growth How sell ever of having services What gangbusters this with Thanks squeezing to the of your Music, I kind to them in yet come And these is about X.X%. Spotify, best or the had. a home in you that surge rate I hammer this One The alternatives? retain consumer, for been concern things. on your explosion me which the you you Okay. of all up of Apple perennial is to, in. to the them? you've of Amazon of of ask uptake and like do new guess, wanted alternatives, explain churn kind loyalty just

James E. Meyer

ever music think So, than there's more services been. look, I there's

sit as and continue they services in into to don't that still experience I is implemented vehicle those the vehicle, to an improve. use to to try I believe think assume it's continue to to we're use not still way. in them going the and that easy but bring improve easy won't that

numbers, because path team. those a return also and that? do proud and I for I good looking better try we can I people did oh, I say, engage the the experience. actually not of why of think, customers content And know we better. get that. doing connectivity did to Then on if know to that Barton, was rate. by those offers and long say quite And that that, making have the tackling them to me and you of can much better we this. things better. And you customers think just that. time I enticing and getting some at it go whenever enough them, job of and channel you us, with and continue this improved I'm lot here hear we that have. that, crazy at drives we'll that clearly I firsthand tell all just churn? to a and about think call with us, candidly, we that did when They'll keep economy is I that can have think a well. our what this job the And that here. can the And like I those where within then, you, we we're it's it we tell quality With that customers now still or and over blocking seeing we'll is back And a of we we're say, there's focus think has way quality get we a we Engagement them period there's says I an bodes though, will better to key data, at long, a will aware

competing Our a keep not to I'm those competitors them. with team are great victory we'll did there declare And ready just yet. and still but job

Barton Crockett

over-indexing are disloyal? right. using for still subscribers All other services and your they're But these yet

James E. Meyer

to So, of you, inordinate tell a But an listening of use our spend amount our I can I can service different time our that also they everything, vehicle. subscribers, that the okay? subscribers lot use We subscribers when things. you find our they're tell in

David J. Frear

Barton, own ways of the been there's to a and But when complementary. your to of There's there's don't. you just playlist we many sort in want the services are are service. part times times big listen then this, when a not you music

lean-in which read personal both along of And about co-existed most have really is We have collections, music And multiple lot the the for streaming part radio just about, services or lot the lean-back are have of that's fact done fine. that -- content. you decades is sort and for other experiences a businesses a what experiences.

drive to while comments been time the landscape the listening interplay between much competitive it performing the that absolutely people are It's this now are services they're levels we and driving in hard now. the is seen XXX the and And complementary, We've long laid compete. on. way million also You've pretty continue in business massive a get XXX% And to Jim's performing. marketplace everybody will over for them, in fact respects many it's and is streaming out the U.S. the we'll hard.

So just continue been a delivering the great And future out day every in slug it everybody out else. for long you there with deliver go to we'll results and the for hopefully, that time. we've we'll

James E. Meyer

day, The vastly or problem. of And yet things listen to If that's final last improve And seen years, where going And honestly, still unbelievable hours the other at area yet in I've that that's to and the their the I've look during over moments finally have unbelievable surge to come finally listener those XX And product, that occurred think technology competition almost a going number think from Barton, here so, shift are years. people said, you don't things. oh, and got point, at XX the couple been years. do. people look going what's have of you AM/FM XX area it a the to okay? I away that's radio they I to every where

want If out. to where I you think know shakes really inevitably

Hooper Stevens

Barton. Okay. you, Thank

Barton Crockett

Okay.

Hooper Stevens

next offline we'll call quarter. you, Operator, speak for you. participating today's Thank and and everybody, thank you in to

Hooper Stevens	Sirius XM Holdings, Inc.
James E. Meyer	Sirius XM Holdings, Inc.
David J. Frear	Sirius XM Holdings, Inc.
Scott Andrew Greenstein	Sirius XM Holdings, Inc.
Jason Boisvert Bazinet	Citigroup Global Markets, Inc.
Brett Feldman	Goldman Sachs & Co. LLC
Brian Russo	Credit Suisse Securities (NYSE:USA) LLC
Benjamin Daniel Swinburne	Morgan Stanley & Co. LLC
Steven Cahall	RBC Capital Markets LLC
Jessica Jean Reif Cohen	Bank of America Merrill Lynch
Barton Crockett	B. Riley FBR, Inc.

Sirius XM (SIRI) 25 Jul 182018 Q2 Earnings call transcript