SIRI - Earnings call transcript Q4 2018

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Operator

Good morning, and welcome to SiriusXM's Fourth Quarter 2018 Results Conference Call. This conference is being recorded. [Operator Instructions]. 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

prepared conclusion Chief our be our glad management good Earnings the Welcome portion will Officer, Meyer, Conference will David Executive and Quarter our also SiriusXM's and your At for remarks, Officer, Scott Frear, of by joined XXXX Call. be the call. Financial take Q&A questions. morning, will our you, of Officer. Greenstein, Content to to be everyone. available Fourth Chief Chief Thank Today, Jim the

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

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

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

James Meyer

even continuing for and and full grow most set exceed And planned joining flow, year. while free subscribers, with managing our and a strong the revenue, throughout you all goal year, SiriusXM this increasing times to metrics, EBITDA morning, multiple we pleased after Pandora. them XXXX quarter integration Good all able our cash I'm thank guidance adjusted have to year Hooper. of were of Thanks, results, us. fourth we delivered of

The million self-paying is audio close trialers world. listeners. in merger trailers million tech, America, subscribers Pandora influential XX and -- the suite a creators ad content to listeners SiriusXM The North powerful efforts add and most improve million and Pandora to in a listeners and advertisers improve future. Pandora company and and and new is Friday. team's market North usability American over to with for solid the reach features promotional for content combined the provides XXX XX nearly expect to The ad-based continuing advertisers We foundation will both Pandora's platform. The bring

into turn The many making auto Before than further me on significantly market stronger let expected Pandora, the going overall to SiriusXM. XXXX year. was comments in

standard market trucks remain car while sedan that This SUVs. met ever our to of their in thrilled SiriusXM morning excited vehicles United become I buyers. on SiriusXM that they of several a Electronics Now Show strong compelling Pandora And vehicles. by more segment big is made and new, incidentally, XXXX quite business the They packages their all to many at am upbeat this the leaders senior the the was automakers. month, prospect at Vegas, as in acquisition about the deal. car Toyota with Consumer Las a was than earlier in and this In announce offering for as somewhat of will we soft, States. and are up committed about

vehicles. this Our XXXX penetration in year climb will start to model fall

this models now world's of pleased General of a and extends rolling service decade, really where is vehicle the XX-year next Yes, deal, XXXL until this from have new for with to a that's growing a year. we'll a new at long-term endorsement full to right, XXXX. news, enhanced penetration agreement at influential fabulous Motors, industry automakers. overall largest also by Toyota, I'm addition year-end one of significant most functionality. our In of penetration our expect announce several With Toyota XX% to with we expansion out remarkable, volume our by which exceed

next-generation this expect our and their platform our we throughout of next-generation vehicle relationship Infiniti through business. just connected connected them deployed lastly, XXXX. be business, eventually awarded to We Nissan car all extending continue to grow out distribution. our And model us year with new vehicle CV

Better While remain OEM I will our play that the and progress have speakers. a more to content, very presence smart our the in well including like apps platforms, role you even for next-generation committed key, we car. more real support remains also features these as we tell improving outside continuing quarter can during made efforts. key as video, with position

combination as see excited think for of and to on to We era functionality and in are efforts at our by to services where be content come we home we we millions distribute delivering SiriusXM. Stay speakers competitive decades the distribution. am a lead go. several listeners value Pandora other come. build players existing and subscription to opportunity our audio that their and completely of our of platform, car on to most will at are large the a to way tuned and space, add company of positioned broaden with is that and home. in Together, the service continue outside new us compelling media ad-supported think the uniquely brands to we working incredibly the our a with I in more experience this changes car, complementary game SiriusXM to platform to by audio the in front and entertainment completely Needless Amazon's vastly gives in more Pandora we can scale more to smart want a the way say, more and great for engagement everywhere. simply, us Put

never decision-making, and will streamline increase consolidate manage I at to of mentioned, As to the easy. contributions. the made thank goal directly Friday, he to XX and the to the G&A things ton on of I say, I speed last functions transaction businesses to Pandora X. just his him we me the personally let want close job have a integration business over These a the plan units and Lynch running. My for ground decision have I've months. immediately the the Pandora Roger and hit holistically And from for me. respect has are report is we day masterful done

we merger cost closer million about rate move But end $XX to a the As cost the run saving. combination, seeing should are for synergies. never we cost these opportunities exceed year. been of next per this has By year, increased of synergies

of SiriusXM see are combine cross-promotion audience. in-vehicle some we position SiriusXM's to our my annually. vehicle. simply, We Let packages one me that tremendous our unique position reiterate the audio level There opportunities create strengths, Pandora's vision American strong out North and here. attractive across to to for I'd prospects combined close single strong like running XX million every Quite the are monetize trials of at with

majority paid the particularly to experienced offer that and decade, amount one trials, will from Pandora a our of in of to next With am grow vast consumers, the stack Americans as these combined tremendous comes side, of the company be from we complete the the future. audience, will now thrilled offerings massive I free. a invaluable listener compelling data to have have Over of

music significantly conversions, comes experience when should preferences understanding is just us owners Pandora used the approximately one marketing the you improve of powerful. retention, half Based fleet as can our have subscribers vehicle of efforts kind preliminary of SiriusXM-enabled incredibly years. example. the in these Data Let past behaviors users' time. me upon This from streaming it and as SiriusXM back to over Pandora This refine for give help our research, well data our listening. for win our X

talk We trend obtain based This to their early midyear, upon begin deliver than artist trial mostly Pandora also America Pandora's driven SiriusXM targeted listeners will just news February, vehicle. expect Premium. subscribers channel news cross-promotion beginning. and we to of will thumbs. new active to latest on from a a and listeners. Pandora's XX by unique favorite subscribers package we a music an new -- Pandora-powered promotion or also radio the approximately is a opportunities to offer our In between SiriusXM's million and capitalize $X will XX monthly By mostly XX-day receive subscribers Pandora SiriusXM users. intend billions in an their Select a across satellite-equipped channel, to app more users the extended receive Pandora SiriusXM month to million North

audiences. and over creating content will time create beyond. active listener of together bring new, a value packages is expect team to to powerful through a doubt, to add for at new marketing. Pandora going clearly is Pandora's a biggest in audio reach will step, focus of to confident the services, team change artists here launch The even Without Greenstein that hours. first unique and be importantly, more both and, Scott create a and related users We management best to for podcasts for and of their fans opportunity his challenge improved here. platform and is This my XXXX I'm The is great immediate slate biggest tremendous the

to be will the to vehicle, improve can in position continually user Pandora's looking look experience. will you also onboarding experience we Pandora We and improve bet and

do sight SiriusXM. right what that creation We're SiriusXM. audio on one we We and on new Growing track is having lose tremendous challenges Pandora. Pandora business of that that way growing at at SiriusXM executing opportunities. of let understand to the them that there we business the We have is plan performance our cash important have and, excited SiriusXM. no focus that we strategy at flows but for Trust the in against record remind then content combination will will more of always the entertainment. and you not importantly, an in excellent And at none easy. track core SiriusXM's head-on, remain opportunities plan. sustained arise of and be me to tackle core record generating But many value Great Pandora, with and the and me We second will thing:

a LA's be to subscriber-focused focused KISS it by to show and of Strip, give on live radio. Ricky York in superstar Sunset for as such in shows We an reason -- York New and our for comes a and Gervais upcoming to performance subscribers after hosts City. live our line Live adding New great from pay continue, people continue updating and events to

and politics analyst, a News' On we an with offer show We've news. have new we've channels legal issues and XX, red-hot polling and focused major Cuomo's new on have the added hosted Radio array Soltis. certainly Dan of new live with conferences, plenty afternoon those. days, show starting Chris golf a from chief also increased unrivaled full-time in added sports shows political Abrams, and Bowl. daily already-large show up, Row These new voices, We've motorsports. legal by Kristen sports we channels college channels we live at on front, the analyst, and also Big CNN's call-in with ABC Ten for political the This weekend, of shows our will of and array Super Big focused the

We streaming are begin an music delivering to additional our channels content, also next which offer by we streamed expect our to subscribers significantly of creating month. expanding XXX

Our market these channels, will research really specific into which deeper genres. new appreciate will consumers that much shows go

also that to be which addition in much out building our video this be will right will rolling We a more available. hard content, Howard at now Howard beyond offering, video offering is and year, Later are we currently Stern's expanding offering. work robust

and to the performances amazing our will give be guests another love. what into come we do great at Video access and SiriusXM, our from We day, additional and the halls building the value. best our that will subscribers moments yet from to town way shows subscribers of every other showcase

the our out with across and in business return returning larger engagement to our we use expect $X to thrilled ongoing changing, the content, on combined work out-of-car I'm increase continue to Pandora take stock. business, flow XXXX. Pandora Our And share to via cash isn't our past growing our and significant Clearly, plan capital was announced our via you of over and and executing our as as goals weeks grow should shareholder that, OEMs we've even as colleagues business to capital is of indication the the business pending. to commitment achieve yesterday for an But invest to our excellent distribution flow and grow we With I'll shareholders. improved our in see market to shareholders repurchase reauthorization X in stock for new stepped-up been solid our nor turn vote now it we dividend the to focus repurchases. cash our we to that increasing and welcome David. together value billion investment

David Frear

Thanks, vehicles. that morning subscribers, end everyone approximately year vehicles were At sales little new joining records cars was with country. XX% Good Auto SiriusXM radios, revenues and up strong a actually Jim. million equipped now representing a XXXX, another of growing very the to the SiriusXM-enabled year saw and call. the the profitability. for XXXX road breakout the over the XX.X for XX% of and thanks in at for million nearly were the all XXX prior on year for

rates rates for sales. XXX basis last penetration with high XXXX full were up penetrated at as in points Used the car year came basis XX%, we in XX%, down car automakers points reduced year. New penetration over fleet XXX some over

it starts car growth million. to to rose X% in at X.X the these million, starts standard, expect trial including XXX approximately over to up will trial in trial beginning X.X and year total years, make X% XX% our over more used XXXX. where the penetration million enabled we in to nearly Toyota from channels fleet in expect year-end, Total today. growing mentioned, stood model coming XXXX. we to Jim XX.X funnel is The vehicles vehicle SiriusXM exceed As production, XX% with at 'XX bring million total year Together, than XX%

million-plus principally was consecutive from voluntary churn XXXX XXXX. were rates of additions, points the ninth We car year X million of Reported New million total over X.X additions. almost XXs respectively, for dropped self-pay and the ARPU which the ended offsetting car while $XX turnover. since rates conversion basis XX in in the a full rise million net due XXXX. subscribers, for the were year-on-year, year high $XX.XX lowest and X.X self-pay churn with XX standard, approximately excluding approximately representing grew to million to performance XX%, to year fully expense recognition year, net XX the and the full million revenue year and our automaker headwind Non-pay rates churn $X.XX X.XX%, nearly strong was new agreements. related revenue X% or X.X%, very churn used vehicle the reclassified of

With the new was more excluding or nearly billion, year Contribution lower subscriber growth, of points revenue for X% basis standard. annual our than down X% XX%, versus to accounting $X.X total the increased customer margin XXXX, offsetting strength with XX from increase and resulting from the service CRB and billing and change, churn accounting cost higher royalties royalty percentage performance revenue revenue of the equipment December radio and as a the satellite expenses decision. partially XXXX XX% in of the

points SAC have through costs hardware great As we rate discussed the in and that new our in last performance year $XX royalty despite SAC radio call, the year we expanded XX the for due in radio royalties costs basis XXXX, current lower brought And approximately giving billion, XX% us below only margin the the to over from $X.XX prior totaled chipset record. the in XX.X%, nearly X% subsidy year to increase and and visibility royalty prior XX% and distribution XXXX extended forward. reductions install Adjusted OEM capabilities. satellite streaming a EBITDA installations. below investments dropped XXXX, content, year. our SoundExchange on adjusted And per EBITDA for X% satellite down grew going rates, prior

of the full converted of the to previously going credits. For onetime the $XXX XXXX unrealized for change from company's year-over-year million The net the investment $X.XX X% research claims normalized EBITDA of XXXX approximately resolve a grew all tax lump-sum the act to billion, due payment license for effective we totaled rate billion, which recordings. to cash $X.X savings adjusted flow, rate benefiting announced and year, XX% which XX.X%, year Pandora statutory below gain the from the full development and federal free with expect in $XX into is addition from and to state tax fair income down outstanding to XX% totaled our sound XX% company's savings associated value forward. XX% in the we million

share to grew year EPS Taken XX% the together $X.XX. lower count, with the for diluted

issued excluding Pandora, For which for continued SiriusXM, growth company. guidance XXXX, we've anticipates for the

revenue $X.X projecting billion. net approximately approximately adjusted approaching approximately of $X.X free of subscriber EBITDA are cash billion, $X.X million, self-pay and billion X flow of additions We of

to million year, $XXX XXX For in returned SiriusXM repurchasing million billion billion shares full stockholders, and for the paying dividends. approximately $X.X $X.X

amend with in billion our This of our still see to week, to billion, was $X mentioned, limited sought $X.X including capacity revolver the consent Jim a solicitation At in our launch million $XXX to continue permit expressly outstanding. of as contemplated was stock. successful conjunction merger short We for a with solicitation the to until yesterday, end steps of EBITDA billion We repurchase of conversion which XXXX the cash Pandora Board notes time solicitation, debt respect are just substantial notes quarter, there million August the Directors these X.Xx. buying adjusted own liability bringing value program, maturities $X.X the Pandora's indenture into just bond Total will of announced in closes. approximately billion. to had In consent on approved at The undrawn hand the merger another completion debt no after authorization agreement, of the with to $XX we certain And to a the notes the $X.X total of company. approximately a XXXX. outstanding. with and X.XX% $XX consent of convertible our year-end tender offer of note we the due billion provisions

us capitalization for stockholders. make strategic operator, flexibility up to further that, let's and in investments open and invest business, to return ample our With capital provide strong it questions. liquidity Our to continue

Operator

Evercore. in Jayant Vijay from question first our take we'll And Instructions]. [Operator

Vijay Jayant

about, you really you it at and OEM sort and of market But drill your on the is standard to Is car past used the real the XXXX, wanted fact to leverage, how in that to to Toyota of and obviously and based be of mix of back came the record. the sort you're going on year pretty Can out conservative there XXXX. seems SAC Obviously, guidance, seeing XXXX is shifting look sort down become in the between it sort there? shift difference at guidance. guidance seems of Just least operating you no is have talk on if sort higher? that is SAC the

David Frear

Yes.

a I is think big that Vijay. factor,

picking history, with been over associated years the of kind the up pretty X margin subscriber think we've just for you point EBITDA at several acquisition consistently look If I of absorbing about costs.

-- little we've talked that penetration year, to year, but we rising, be Next the be auto maybe sales about, a as bit from this we so going standard, down is Toyota not had is going expectation to for much.

I we're get to lot we're from bigger years, will which are we think going So in to benefit the that prior out, in coming vehicles but a new -- benefit don't that's news, seen pipeline we've SAC right, margin good in that have XXXX. going that

Vijay Jayant

quickly to then the also and these much right be be $XX that you you prior Obviously, promotion we And initiatives just that. there now the all Pandora started haven't will since that, pretty talking by too? XXXX, X on million synergies end starting between the synergies should about have revenue you and just the of quantified -- the platforms, on cross assuming

David Frear

results out combined really go the we the at and Friday. We've we combined when call. management's first I company it just expect our team through next close the the We of and Jim get we'll more to the over And have of have hands recently. gotten about an what around the and to company new opportunity I plan several weeks And will for say sort it. the Sure. get quarter of to the rest year think

James Meyer

synergies, a of that when comes it Yes, quite area the Vijay, say would of to bit we've I done work. cost

opportunity. the And synergies. so In include I we, number to that In not That's synergies, synergy. with correct. believe cost as a guided we a happen to area have lot comfortable that revenue weren't and that there revenue of wouldn't obviously, area the of if It's number number that can -- does is we achieve.

just it every other I we and be we as the hand, big you many And able way to actually think to abreast going we'll test are how of is. have into know keep quarter. that David try before things On said, really our that to opportunity

coming we we'll for be mean, next I of great is you many, box months assume out think we're testing next the to this. that I are And as we the doing week. many swinging. should fine-tune news to going come begin

I and that's So that. kind David of are where both on

Operator

Deutsche question next from in is Kraft Your Bryan Bank.

Bryan Kraft

be past do think to on the few had smart Jim. though that you this point? interpret share Jim, for billion for there if wanted one far as the the years was so and for I maybe Should than also, Is billion billion, listening is a but just even relationship. it of for be versus the even did higher the than David $X light reloaded would speakers? separately, then you sign is listening higher Or repurchases not to in-home I just And guys, authorization I comment year, all through by a the SiriusXM? at And 'XX. opportunity you step-up it David, bigger Amazon repurchase still likely one ask share the in in much authorization. on which think is we you $X.X which at you there's smartphones car old that $X.X outside year and you could last a

James Meyer

for It's there going us, last of a is the I'm one to answer have opportunity Well, to the exciting X think And we your both. I first. news of lot expand.

I don't will many try done, When we those we do, if well. we're be to get to progress we focus me in areas don't okay. of XXXX, going make -- certainly focus them disappointed, Bryan, there. significant think I things. And I on pretty both you I am in know and so And

base the at we know, saw wanting our that relationship, We more customers speakers that product, in you much Amazon for too know us wanting for yet the or launched, enabled how it early It's to certainly the late XXXX. use as saw it early increasing data subscriber On and smart moved. from a home. lot listening very enthusiasm to has success in those so of

that watching tracking we're that. and assume can You

Amazon On side, as liked what would've have of with streaming done us very the will -- are heads we think to as didn't I'll through down, and the And we'll would going at well call flip I our already stand-alone be Both I got channel. it and figure you, to candid just I stay out. we Amazon attracting do I customers it. just David?

David Frear

what buyback for more So it a we look intend and if it's on buy the question, at could long of the time, think on that it weak some we've fourth bit said stock quarter, stock we had a we decline what see to I less understanding in quarter. of fourth value now. the we rises. bought the in And when stock restrictions and you quite that the in we as of buy, in did And we

billion the to Doesn't that Last to what free of EBITDA expansion through cash and repurchases a flow cash levers flexibility $X be the returned the you gives between put that when move did. can have we And and on the excess us continues sort change see dividends. just shareholders about opportunities the stock. perspective pick billion and the $X.X year, move quickly year we it, flow and of it. model business stock up the expanded we the long-term a we've of -- really authorization authorization about we generates talked to that to So Bryan, though,

zip think code. right that I so in staying we're And

Operator

Canada. question is Steven from with next Bank Our Cahall Royal of

Steven Cahall

question be of the ARPU. just even first bit get baseline change, the MRF, deflationary. excluding Maybe a little Calculating I ARPU, the ARPU, on to kind excluding just accounting

seeing similar Auto as have a promotional could the how if Sirius run? Comcast you on come of Netflix SiriusXM XX% bit also to And if liked those to see was any and impact with if about Apple little the things similar MRF the really you activity. overlay you Pandora wondering stat CarPlay as -- And being wondering talk that are I And I users subscribers. secondarily, penetration between and gave, long television think of well. you So that subscribers data up that what starts lots us in pricing you're you on then users of Android users. we and users of can

James Meyer

your take quote the to go last we'll can't But last that want question, I with to I know to I'd our I the Well, to data look and back first. it. don't into have I'll one happen but ask agree teams. you. I know, is this, answer million. I first cut you when database, excited I the SiriusXM which, as saw can't data over the Pandora don't you, the but to undersell how and I between am, overlap tell vehicle-enabled you of XXX well

in But use For a a us, within we, extraordinarily to seamlessly campaigns And me. be obviously, of tactics. tunnel powerful. to it this figure to is how now bright and light for kind data, marketing able have this to is have out creatively marketing our our and

David Frear

averaged at sort accounting we change question, same X strip year, the when kind subscribers. getting last And we're sort out last And in end of the X.X% ARPU of of that you the sort if the of of ARPU. at the you you look On value at up increases look we've realized total number. for realized out years,

in we I -- that, the we haven't really years we'll changed we'll and long change for part, there's plans. discounting we very of rotate using with practices. been at But similar hammer our what that no sort So our time. over come -- do, We've fundamental a out -- sequence and offers and offers, and the margin, think for new them go-to-market -- most been for we away with the

Operator

Lynch. of Next question is Bank from America Reif Jessica Merrill Elrick,

Jessica Reif Elrick

where or about a it just product? churn this product? Is the video benefits talk little you've so bit What far? you you Can can else? take seen anything And

James Meyer

he's see in fan engagement today, stuff very well on he want And to Jessica. Jim, tell on. already with I about can Howard's early ago -- he I a app. more with Howard from the the X couple, to I a engagement and there's very we the he's work X speak is excited. video don't him as base. seen things sees honestly, it This I he that what's very excited as can this. know, can and don't on weeks spoke come have do actually what engaged for very to base on video We but the is certainly fan wants increased on, will -- now do him, he I you with And

So after there. it's improvement engagement heart I is any this pretty we know, better that that they our engagement, stat of of don't I XX certainly I and know easily are every we've back, metrics. engagement, The seen here yet us the thing, can one of learned subscribers pin more do for that behave hard improvement metrics. almost years says that one or terms engaged, our in our the at here,

So excited. I'm

too would outside I I mean, video see Whalerock to of working -- we'll directly the Lloyd okay. committed that path. our on we're can can going I extensive you, that and going lane, want not report going -- to over But on initiative. it experience, Braun audio will today. with help we're content but say the it months. area. our to venture I a into our But will they're create be reveal be excited or Scott X complements that that and about are Lloyd Scott we're to getting kind to we're stuff swim some to tell outside stuff not We've you're entered think don't next initiatives. Both of said, the Lloyd, into to we things risky -- pretty renewal reveal that think video this agreement with yet, us that and I not

Scott Greenstein

great And matter early and numbers in on have the social thing is that does Jessica, deal outside a we Howard media digital where places. one seen

the clips extraordinary when to plan plan were the these through and going places, other dramatic more of lines, the in interviews the runs clips where YouTube they numbers the out organized are other and things best we're increase number audio the much other of a there seeing media social of views. some side out And thematic on it and when hit well-edited there. and better-quality So that's or when Howard a in been have compared an or was

Jessica Reif Elrick

but said adding it the on on. That's product then have -- different you And from you're streaming -- how have what from follow-up mean, you app? is other Did just great. I that just now? Jim I early you is XXX the one think to So that say channels -- is different something

James Meyer

Well, adding channels. those we're -- XXX channels

certainly app. We find ones add very, in out. I think, carefully about satellite that thought them great into channels lineup. on the their expect the well is perform been will Those weeks. way the, should thing to But only be the our you X to expect very They XXX next in will have the that X

Scott Greenstein

and you should go expect largely we've them at brands complement And existing SiriusXM. deeper to or popular channels created

sort hassle So more curate and free. what still give it but of want, people

Operator

from next question is Buckingham Group. The Matthew with Harrigan Research

Matthew Harrigan

hear you that. with sorry, I'm with with the curious, of and Just particularly on hype connectivity can [Technical going you're a Nissan OEM the to side, IPO But Toyota and a and better Congratulations was second. with Uber all me I Difficulty] now? lot have some

James Meyer

Yes.

David Frear

you hear fine. We Sure.

Matthew Harrigan

do I apologize Okay. that. for

in think some again, with think the that cost market know of Uber -- Uber the of automotive period perceptual in the do ownership question. you some in it's much that. going your the talk to And apologize and and Lyft And do past, of IPO all I the of you necessarily something start for downplayed about given queue, bumps? you're With I haven't the a that friction. business between too a sharing you affects to the versus lapse got lot But you going over real cost time? you're the And on get get of dislocations the and

James Meyer

Don't about it a worry bit.

smart-alecky had, around long I guess has a is a auto the has greatest time give Uber which kind industry been could answer, you run and just I history. of in I So its a it's think, X-year

I when feel Americans certainly and owning what vehicles, feel I to mean by working. is buy good. So vehicles they when value And think they're continue more they good

vehicles a vehicles. of of factors many, will comment they and I place am older car who own happen I I they -- the to is how might And many affect is give those macro X I their so am worried they don't also to how we're key in there. are That do all a Uber. and bit have their part a said, things. and things. up Uber want children grown -- Uber market than be transforming more about great

So enough in down. not years I just And the I smart how or see me, near it, -- just midterm. and certainly I it to X road see the don't I'm and guess, right now impact XX might the

Operator

from Next Bazinet in Jason question Citi.

Jason Bazinet

Pandora. I just a had on question

hours, things listener there: was didn't that, main now see interested and right free; three free One, were mix, as said of is marketing and there exists Pandora? the active CPMs. is you see ad on you content. today, challenges Premium dimensions just the users the mention and load those between a and the other I in And And couple there? opportunity opportunities Can you side, and just of you on then whether it the and ad You comment the

James Meyer

there I and experience by by And telling very thing it's to compelling lot by I we to got we're content if ground think close, deep in give running, that, opinion. time, XX this the believe But listening I Well, to the one about our close light more believe into work going. with that. more to listening in into to entertainment a believe, is and That I'll improve can that And are We lot listeners, is fixable, that there's more the decline running more mentioned, on okay. moment. that be and Pandora. and a and Friday -- you think and we're first fixable, longer adding into is really that a a listeners that. funnel, story Pandora I'm significant app you the way, attract both there well we minutes in-car that is partners drive believe, our going it And focused worry there ground still whatever the making speak happen. and believe OEM to And metric funnel, I on to And going we I will focused. my -- we gut longer statistics. little foremost, going hours. the And take will experience -- tell come correct, thrilled the can will get certainly, hit make where more. to and make that later -- about David the hit flashing listen together to once we as again, the stay I room we're also you to try I Pandora be that's Pandora's be done is compelling. the love with

there. think I doing job in have. see that they of the any, We different listening things there I or it team monetizing is the ad doing David ad think ad They're invested way, a to where great understand, increase lot ad varieties smart load I hours. don't technology. the the go, statistics They've loads compelling does load. really certainly, the of there's a in about any what by can

we have to going just those decisions, So get tools make those at we're available it. and to

David Frear

what which and the and if little hours this drop capacity, to let really and you about also about about hours. couple like load ad I less before. I ad and a we that you want get And back ads. in around to you really will more what -- ad and -- the bit think, bring we and just want expand ad is that -- more right, the to like then right just things a add of -- me revenues, to and do you loads, expand Jason, to So talked do think, we have -- drive capacity that The

we've got got think a from is everyone the between compelling at we've the want vast something is better. the product good, got And that some sort X then let's sets, majority we've to the service, that appetites now. with I $X companies sort product it there -- pretty product, ability of satellite call then which to represent best lineup. a really of and has good CES. for powerful Certainly, that. offer. And free at in we about there stack you've that $XX the provide different better, conference, product Yes, ad-free And but offering. for the we've offerings is a effectively, a certainly product and best mid-tier offer that talked of and then stack got the radio sort terms market got services middle-priced -- the Pandora these of the -- here, And the to of the to Americans are

James Meyer

What's has strongly editorial here more that And the I answer feel question just of those now, the about. X All X going been to with Pandora but are your going? doesn't last faced where to you want I team, one The years, done Pandora? okay. the for to sell comment to all Are Those constantly you or done. are company? happen make question That's something going questions.

do particularly hours the at is improving it. we so back the work And you won't to the on I of but can going tell where are be those. confident It I'm and can fundamental business, getting we metrics easy, heart on listening of the focusing

Operator

We'll take our next and Amy final Macquarie. question in from Yong

Amy Yong

$XX and on the color you for the up thank synergies, on just early I guess, the million. Maybe following

are about XXXX merger EBITDA that your synergies. a actual a How are up the lot Pandora following of think business. understand a that look in guess, think Most I ad-based us Jim, in an dis-synergies of do as at process, And the previous we I context of then there us guidance? business, there on as SiriusXM just subscription-based question. before

the models, some we manage you X XXXX credibility? As if and about and different judge has how merger beyond think separate were business this that prioritize to should we actually

James Meyer

have I'll I think does but with... start merger this credibility, Well,

Amy Yong

Sorry.

James Meyer

of what know in we're how and They're XX real real are owner with up said, XX very -- through is going can Today, very mean, listener auto $X satellite we're it's I I we're how how that, our take if thrilled monetizing year trials way. the finding you of trials. our I'm way, and some well a think could going okay. We that, that $XX, many start get them or delivered, that can ad monetizing very way about our about irregardless will run know, my our you want it the to many solve offer, down these that all not we how every number, cannibalizing is as free -- how we I'm X/X more information. if million ultimately, we are begin And to those EBITDA do. channels. a those that's I'm pressure we $XX, we I'm for I And other. are click what those confident model end many each the pick David? trials to going are that, effectively monetize $XX, by the And streaming, million, $XX all one of end way not worried And through In successfully. from We we generous the I'll between and by to to revenue-producing measuring be to free equation. measure in back many and points right -- I funnels. can immediately do start trials, mind, much of how to up driven very, manage of those. of worried harder we

David Frear

had guidance, because chance it relates as in hands get Jim the expect the Amy, of it's not when flow, plan as in our alter relates for I smart materially they for effects to going our the wouldn't Pandora cash the and first the probably have of it -- back come quarter 'XX. we is But today, right, different, around a are Pandora as to and you a But on to revenue. we EBITDA 'XX really as to we'll So lot free revenue to got guidance. obviously --

Hooper Stevens

Take care. everyone, Amy. today. Thanks, us for Thank you, joining

Sirius XM (SIRI) 30 Jan 192018 Q4 Earnings call transcript