SIRI - Earnings call transcript Q4 2019

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Operator

Good morning, and welcome to SiriusXM's Fourth Quarter 2019 Results Conference Call. Today's conference is being recorded. A question-and-answer session will be conducted following the presentation. [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

Senior And remarks, conference everyone. Those our call. be conclusion Frear, Officer Ann. Financial and XXXX At Officer. Chief to year will the our Jennifer David and Officer will by Operations. be end management will your Today, our will joined Vice good take you, Marketing President Content to Welcome two President Chief questions. Scott Sales, prepared as available Chief Q&A morning, well of SiriusXM's Witz, Executive Executive also be glad Thank Greenstein, our Jim of Meyer, our call. for President of portion be available, and the the

as to First, forward-looking imprecise. in made assumptions, that defined current data or the Reform the the incorrect necessarily remind Private statements that expectations Securities statements be based upon of are certain beliefs all term everyone or and I’d and XXXX. These and may Litigation is call like management's during upon Act statements forward-looking might methods be depend

Such and could to risks results actual uncertainties materially. are forward-looking cause differ subject that statements to

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

results and advise adjustments. As results. of stock-based adjusted All will to begin, the both we price the XXXX, certain effects I today's transaction and would forma purchase accounting and Pandora January pro forma X, discussions operating our results actual adjusted that listeners assume like compensation closed include exclude pro results discussions on about of

Meyer. Jim call With that, hand the I'll to

James Meyer

revenue, growth with guidance I’m financial our to Thanks, recently and introduced flow. subscribers, Hooper. cash pleased XXXX for strong growth subscriber and good adjusted free performance. And SiriusXM morning. reiterate XXXX in EBITDA finished

fourth additions the the million X.XX for pushed net year. self-pay XXX,XXX The to us quarter in

continuing year rates, fourth in Our we feel quarter results steady about churn and and great which very good were conversion by the XXXX. powered in and

As we’re XXth release, our I’m incredibly of companies adds. or I that long deliver achieve press our year many mentioned managed track consecutive X net proud in have exceed million to record consistent Not a and and success. such there self-pay out able of in any industry the to guidance more

real a relentlessly of so of to even is day-after-day. testament their to This service, and do people but effectively jobs quality excellent our have the the that more we team

across North the just listeners. have past we over million a America. in has XXX about XX entertainment. SiriusXM, decade as become With And truly in powerhouse our a businesses paying subscribers importantly, audio million Pandora,

on problems. We time ton ensuring advantage. know with spend strong the are OEMs and this of working strategic us going, and infotainment, position in a entertainment automakers We tremendous the provides a OEMs helping and solve a their long-term where future there platforms,

penetration quarter-by-quarter towards rising march will the We car new an and this XX% rate. incorporation I more rate, couldn’t be year with pleased

in the recently we’ve renewed many name to more Honda extensions deals, SiriusXM works. completed years extending have to come Toyota, and automakers are We to rising a Recently OEM with for penetration rates. few, of Nissan, our commitments

our size of come. of visibility million to fleet are will Because we the long-term to the in confident deals, our years grow than XXX more enabled

that this the their arrangements dash. importantly, XXXL customers. in placement and the with focus recognize SiriusXM bring and they guaranteed OEMs prominence and in on certainly added SiriusXM these economics to the Perhaps as and Remember, our satisfaction now just share consumer

model by should sharply the vehicles will this X years in come. operation million launches coming in across OEMs XXXL With in many of is year with to be now distribution next-gen record reach the XXXL six its platform continue and to accelerate the will year their of Total XX of OEMs end our 'XX, year new will distributed plan grow. this brands. and with and

immersive, XXXL Internet two-way experience connectivity. and brings listening a the engaging by satellite vehicle more with broadcasting into personalized marrying

expect superior will improve XXXL churn conversion performance. and offering of the We

the of fleet most over-the-ear now evolve down XXXL that is line. so features – cars we path at across updates, things not provides platform about the into Pandora volumes handle newly One can it’s capabilities vehicles. that - large just exciting can significant is some a the our to first move of This that point the entire produced

actually over of all year. later this wideband expect next adapt the chipset we first Additionally, to years, the new OEMs OEM our launching with few the it

As ways broadcast decade, amount content of are and this the platforms our us of new expand will multiply This of years data middle our send we many mainstay/future our we the chipsets vehicles. our in-vehicle in to offering able wideband the grow to and XXXL consolidate to chipset the allow to to should for new are come. open services. roadmap monetize and up

car. subscriber work so Although efforts to engagement outside the our extra subscriber the charge we plenty majority still at base. do, far have of increased Late no we increased on grow. streaming we Subscribers summer, to our of to platform leads know last to listening retention. continue pleased with service made of to engagement I’m SiriusXM the increase this that streaming available And vast steadily and

resonating Trailer and that channels in also numbers, very finding streaming well. trialers our are XXX we’re greater are extra

and our to the We’re our video of out continuing stations highlight availability also SiriusXM to subscribers. build Pandora-driven library

as use really you at wherever the car, service steady office connected are, in from of easier those or access on Google. been in never devices, such SiriusXM home, the We and the growth are Amazon on-the-go. to seeing It’s our

ad very continue. At very pleased service can I’m and In was we’re with this optimistic the position the Pandora, I’m taking steps strong, XXXX, success. to for monetization

significantly inventory, efficient. XXXX. our services value we making while we still in programmatic matters because force can simultaneously programmatic high achieve great our and pricing, in grew client This sales and seek Advertisers more

and revenue year. this poised Off-platform in and AdsWizz grew double-digit are for both XXXX incredibly expansion

modes stations and discovery, more content favorites, recently for as Some page of more app and mobile feature after the deep recent extensive impact. having landing to are even to the rolled cuts For positive a and tune innovations, design have product showcase our crowd You, all-new with out such early testing listeners designed more for

amount platform, can increased SiriusXM of unique music content continue podcast radio contents including podcasting greatly the In XXXX, include playlists. And add blends where shows. are artists and we which tracks voice the creators of on playlist, to exclusive curated and from story more we to music

introduced select In on from content UNINTERRUPTED December, we LeBron's Pandora. and Howard Stern

on company, to we’re a SiriusXM offer of unified platforms. isn't amount other compelling from As able listeners a significant to Pandora available that content

content. using new now new highlight and are to during station tech Pandora’s of discovery messages relevant the audio to use ad content We and increasing orders listening artists own promote and

You, for listeners will of to exposed For content the to with exciting be this as new relevance We increases greater continue volume a discovery. much and approach the rollout Combined Pandora engagement great of prioritize service. a is think of broader we

Internally, spread We resources a fronts. are also using together larger been progress our variety approach ad new better to our of to approach. our development a teams unify tech on has combined resources our and in

quarters just over that give our a more applied now than products being are SiriusXM resources both Pandora three one To development digitally-connected of you and the time. way will example, in benefit combined

about relevant becoming down Because of more strengths breaking and SiriusXM. smarter servicing to of the is Pandora content use and and We app listeners. this, personalized, SiriusXM the are easier to both cross-pollinating silos

plan streamers the extension serve and tech to ad-supported SiriusXM's is example This to we begin listen year both platforms. that opportunities great have of created Pandora’s off-platform exists by they sell ads In now a utilizing to an of Pandora, channel. business the when to ad targeted digital later we an because this countless

streaming execution media prowess has growing strategy With and and approach we’re have higher to been programming subscriber attract to Our and added an even to our Pandora. acquired since audience we talent brands. massive SiriusXM of and base, elevated caliber able Pandora's

and Drake, of Our sports, are that. enormous the and UNINTERRUPTED the are music, LeBron's in Marvel, agreements These stars examples with and entertainment worlds. UX value brands programming creative mega audio with first

the with major new content are We not accustomed space, the and and will coming announced Marvel in with for Pandora superstars with platforms And debut to announced our media which to and original content major working the we the create will SiriusXM launch which to be our for coming channel but fan Pandora, We this deal bases. UXX audio exclusive months. UX superstars the called year. later RADIO, brands SiriusXM of

as introduced December, the soon. coming UNINTERRUPTED, brand and James from Maverick LeBron mentioned, by athlete content will Carter, founded be empowered In I full launch we a and

available exclusive the athlete around and to bring playlist closer music we holidays, first of XXXX the on And Howard will time These selection for their content compelling fans from through music. interviews a favorite Stern's most Pandora. made players

exclusive concerts Opening Pandora - as Chainsmokers we In listeners Concert events the back-to-back Pandora programming Super part in offer Bowl, and nights special and experiences have our days SiriusXM the Series. before new - me, SiriusXM As Drive The listening separate value. exceptional of live in and LIZZO presented these also experience Super Miami on excuse

from week ways. We World. We had in on delivered sports merges that display extraordinary yet more power live Radio of entertainment entire worlds and the of programming star

on pop-up Pitbull, entertainment Sway Hart, From McCarthy, Bowl channel by more. Andy special talk hosted to NFL Radio, SiriusXM Jenny and in-depth Dog a Super sports Mad Radio Sports Calloway Kevin our shows Cohen, and

on SiriusXM's Hollywood Coldplay small full-time live of concert studios Angeles, avid its our play Phish nationwide rare at In on Philadelphia, Los is fans special broadcast aired format that Spectrum In to had in show that we band's channel. a new a legion channel. was the

ever this what among was and Billy sure our analyst did of - that me tells performance a draw tickets the from Faena the Hooper Miami at Joel and investor that one our Theater our subscribers to for Beach. Not after subscribers in most from sought conclusion. And community. Incidentally, Q&A

great I never access new as giving sourcing in than we’ve and CEO, certainly years events. to more listeners my today much and live our so In creating active can say content been

about price approximately allocation, might our pleased shares remained the million significant includes flow financial able our efficiently leverage of the capital in in flexibility whatever bring. about I’m billion $XXX $X, the deploy extremely stockholders we more to were million to steady capital a dividends. purchase we $X.X XXX to speak future for Despite below and will of David XXXX. at tremendous have our stockholders, but plus that That

realize mistake, cut are no well. cars but us inevitably is have and taste competition our The listeners for fierce, for as rapidly we we their work moving consumers change out in Make evolving, XXXX. we and

I right In fact, our position love now.

have engines growing our world-class And strong I model. in sets, now home. stronger the mean both skill and driving ever quickly And business advertising. revenue nobody the We're are subscription nobody in we car and in before. We has than

extremely The changes and were significant well in XXXX future. us for the made position we

and We innovating about focused execution. XXXX guidance. investing are across good And very our on I feel business our

to With that, I’ll you, turn it David. over

David Frear

guidance financial XXXX XXth net our while consecutive did notch successfully Thanks, year doing the year for SiriusXM, but achieved also joining stockholders Jim. X all approximately of so. we adds, everyone. was our plus we $X.X only another returned great call. for our of billion and Thanks self-pay morning, the Good million closed acquisition, Pandora not to

for focus the our results, year's on forma Auto As the $XX.X I companies flat sales discuss $XX at million. combine million, about which two last full period I’ll the just in pro ended both results, years. with the year

XX% totaled to pen XX% XX% through rate the we as pen confident move fourth We at programs. ramped rate several remain quarter year, Our rate but XXXX. move for our as pen at the exited will

the vehicles used was installed The channel car cars year and road lift to self-pay total the basis prior the up rate to XXX The approximately up approximately XXXX, U.S. million the in of the XX% additions points or nearly gross base the in road helped used on from XX% year-over-year XX% XXXX. in over from cars total, XX% the penetration grew on XX% of XXX

continue the Used over increase at car will trial growth grow it from pen in XX% rate climbs accelerating next the to Used solidly XXXX. new penetration several car rate. as years, steadily car XX%, starts towards

the At brought funnel X.X total net million, stood year, million. year. SiriusXM to Self-pay of just X.X XX XXXX a from the at hair the last end of up under the the of adds self-pay X.X at approximately end at trial million million in base

and compared the per month. our new churn churn below the used low-end rounded our was down to remained business XXXX churn. flat to by offset of and in voluntary range still be continues and to as This rates X.X% year and strong expected car rising improving non-pay Conversion vehicle for

in Together in growing revenue X% X% to ARPU the for $X.X grew total record year. XXXX was year segment our X% over prior a base, SiriusXM subscriber growth $XX.XX, billion. nearly SiriusXM's the with approximately

properties, SiriusXM as settlement content at expansion of royalties $X.X increased of cost Fox with several the stock-based increased and comp Total the services, slightly renewals nearly excluding billion. line-up. well our share in deals including and to with to Programming content only continued due the X% programming as SoundExchange. increased cost of Revenue XXXX investments

of increasing customer continued totaled in the Lastly, $X.X efficiency profit and exceptional level prior margin costs. billing produced with over Gross our show year billion, to a XX% service and we X% gross XXXX.

revenue At the and XX% this higher and bookings, from contributions full record pricing, strong XXXX. $X.X grew the SoundCloud from Pandora, end growth Ad reaching a billion, the year, quarter higher to performance. strong than advertising for RPMs platform continue drove XX% $XX.XX relationship to AdsWizz approximately grow, sell-through

additions add continued grew MAU X% and self-pay Pandora and to a X% year ad the X.X by hours down hours to of in MAUs to trends million. XXX,XXX XX.X down with net million subscribers total XX.X million.

XXXX. revenue year $XXX over that $X.X Pandora paid trials were the declined a billion. in XX% result subs promotional more Total of wireless Pandora's was carrier quarter subscription to retired to XX,XXX as grew third up for of million, a promo Paid XX% the subscription revenue with 'XX. than

services Pandora X% revenue strong costs the drove than Total in were of royalty higher off-platform since our elimination XXXX advertising at of minimum guarantees. that cost offset business more share growth the

XX% through to approximately basis XXX Pandora's points in gross higher profit. revenue 'XX, profit dropped to However, million It’s representing XXXX. gross of $XXX a margin growth a XX%, than jumped

margin or company $X.X to XXX million EBITDA nearly points gross growing $XXX 'XX, XX% billion. forma the $X.X profit X% over For over billion the grew billion nearly Adjusted approximately adjusted basis $X for year-over-year. X% combined to and in pro over forma XX.X% year. grew revenue full to Pro million or grew nearly $XXX was EBITDA XXXX

higher converted costs. We year primarily refinancing amortization free XXXX by prior billion net driven this over charges in the XX% to and XXXX. and cash totaling acquisition $X.X Full declined from $XXX of GAAP adjusted approximately and into billion EBITDA in flow, addition in period, other year expenses of income million related depreciation $X.X

of compared was related The XX.X% development and benefits compensation the company's and effective lower share-based to related XX.X% prior the for excess year temporarily XXXX to by to research which recognition credits. driven tax period, rate in was benefit a tax state

we Going approximately expect be rate forward, our will effective XX%. tax

diluted diluted per GAAP a billion on for basis share the Earnings for shares. of share X.XX $X.XX average count was XXXX fully

which anticipates guidance growth issued we've XXXX, For company. continued of the

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

more have largest million stockholders, stockholders. paid $X.X capital XXX and ever. billion shares stock dividends million of year to last the $X. For average more shares buyback we at the nearly than year, just returned approximately over price in $XXX year our Since of our in X program, second repurchased We billion purchased than an we to the initiation

entire cash investing credit debt capital revolving ample At facility $XXX to returning billion while just times with and gives available $X.XX This was hand. year-end, EBITDA our to of the million business X.X on our on adjusted continue to stockholders. over our liquidity us in

operator, that, up open for With questions. let's it

Operator

Stanley. go Swinburne first Please question from ahead. [Operator from Morgan Ben Your Instructions] comes

Ben Swinburne

for and on and up Hey, two growth you. in which marketing David, sales for year-on-year? double-digits think color I good of the the question. was morning, the One, guys. kind quarter, any G&A Thanks

you And targets in the once. about then second, I think think out Pandora deal, some guys had when you synergy as we closed you laid raised them XXXX,

growth Pandora's Just think understand we trends? curious in lifting of expense done to more some XXXX now year? how to versus think lapping in heavy trying prospects about 'XX is about you're opportunity I'm last that as if 'XX the there financially

remarks, one be? to head anything and that of Thanks the business spikes? guys what always fleet - benefits to surprised would the now two but on in this some you you XXXL rollout there think on these is early the or And think auto road. you real biggest far mentioned you And get the into lot. will so when Thanks. the What then, are But admit, XXXL the Jim, XXXX in XXXX to do of really prepared the is patience you preached starting a cycle. you us I distribution as

David Frear

the start Let's with last…

James Meyer

Okay.

what to And through I'll be is meant it cut observation start starting to XXXL. I accelerate. might that Ben, think that confidence So - able we I with now me your really gives XXXL

overlook the for of step wideband an chipset. way, don't the really us. also incorporation important the By is This

In the Spectrum of decade. can't the of it, fact, consolidation in middle without the we the accomplish

that that now of pleased and virtually has planned really with I’m So both seated XXXL are a those record OEM. every

As the we say, to enough from got live you've benefit time. to long because takes implementation them

thought. honest couple harder First, was stuff give than One, observations. you I’ll I a the

we was the As there ending how to was. what the that coordinating service the dovetail together in vehicle more OEMs out, result be the work roll in and on done with

SiriusXM for accumulate that we I to a data organize frankly, really as two. with challenges coming Pandora it’s say real-time would amount how time area, had figuring of launch. separate and first mammoth and And a use with significant the as for back that, we

learned a know begin We’ve climb a we lot to really on the rate significantly. the to to we’re place confident, now and from incorporation and now that for is gas step great

again I be by because It talk cars. involved suspect, virtually anymore in the it will jump XXXX. significantly we even won’t standard way in that about it will And XXXX, SiriusXM's

- experience does It to is; the makes service I two to us we’re better what which our and in key more it's makes car mean retention frankly, things; points service think again higher simple. And better I listening of engaging. the about. is compelling really customers, one, more of only better. both want it all It those our make - conversion two allow

the future. our road XXXL that backward from want compatible going meaning That’s future for downloads XX let I the into ability we've we probably though, to I point, into second versus platform, key the us been where with iterate quicker evolve The features the last software better think can is our years. again it for customers first reiterate it and that - is a will point. going upgrade down that In

as to into Pandora some that helpful we was David? the sitting importantly, allow And introduce car seamlessly at think it us will a to will be way subscribers. point in very

David Frear

that the synergy earlier to to reach the going look in able we’re which on not a said where So we really we’ve now. on for where But of forward synergies we’re them be we Ben, anymore, in it. overachieved year, point targets also we going the sort track identified are 'XX, to as is originally

the integrated the used of be that resources here to pretty structures command from confidence one now. the - other. And probably exercise. be to got have be P&L trying – the consolidated it’s synergies worthwhile honest, I to are that have overachieved. multiple who we track companies, managing going it's can or who say not to everything is solidly But We people in We’ve with

on your sales and G&A a growth. in respect change With to G&A than is much litigation The G&A. to predominantly Other there related reserve. questions wasn’t that growth marketing,

to side, the honest, on areas. on pretty in to and And a marketing number We really the And with be thing same smart. distribution we did on took opportunity work of the were to we step gas we with investments that put the in we a that thought the I sales that sales step good all in having and quarter year. ways marketing all the programming products and gas of and we investments across were channels think money fourth

of brand channels. that done could our solid distribution have amount our and devices. across the CE of it a think think in-home - We then building performance all distribution benefited spending new been We the with

- was money us, a for we thought work. it put great time So to to

Ben Swinburne

guys. Thank you, you. Thank

Operator

next Fargo. Please ahead. Steven from The go comes question Wells Cahall from

Steven Cahall

Yeah. you. Thank

gotten nice sometimes I on for the a bit past a think kind the in me. short lighter in Just quarter. period. little the know a stock the first Maybe grid a buyback little the when in a has couple move your have buyback way of I the in was

us So in XXXX cash help I'm thinking wondering a if and just for versus you're you put deployment how little context could maybe that XXXX? bit about

back all bit that little see the I are it high a pretty KPIs then I unusually ticked but did was kind down And in seems know strong, the like sequentially. funnel of vehicles trial it think the just XXXX? that about as if or shipments wondering how I slower we we paid trending promotional QX. was do of the to through funnel trial tied go the Thanks.

David Frear

Sure.

step ease can gas shareholders stock we we On for it long the quickly, on we - $X.X sort back of point, Overall, as year and then time, - exactly the is on us. up buying capital of right grid. a buyback falls sort it run the on it to through billion to rises when the your in returning for a but big buyback,

we're did think with we that. So well. thrilled We

to On buyback. a do going we forward, continue

in capital. And generate opportunities look continue used think billion a the we we’ve past terms when to use We’ll buyback good We buy. sizing the that stock this up the same about we’ll years. year methods in $X excess year to in it's a load probably of on for

closed funnel, trial paid did for among and manufacturers business trials, some market we promotional to the the wouldn’t But car a related the shift love say On year slowly. automakers. slowly close was some it the our used always all I little our really is trialers. there

thing interesting new that automakers little interesting or closed lot car business the - The year. slowly. end that about didn’t at a of a cars was of the the build thing the The

year well before and actually they actually, of of augurs year were so sort were than fleet inventories the for were it our for lower us. And vehicles this XXXX

James Meyer

Yeah.

few on well the able in as obviously I cars time is of country. of certainly as two to spend deal our David, least of biggest that, ago all at Electronic mood retailers think, top The automaking Consumer partners weeks was a great good. of the I at a with the Show

I’m particularly for about trial And so I’m is right me not all with at least you I concerned at all as right XXXX, thinking in will the now. challenges now funnel one the tell

Steven Cahall

you. Thank

Operator

from Jim go question Research. Please next from ahead. comes Barrington Our Goss

Jim Goss

and talk now good, opportunities? were ad Pandora might good if consider A between performance I point you’ve might a you of are wondering was to other revenue any describing you couple the the and very to and if details. strategy the to ad you you. also, one about - some year emphasis you Thank there The SiriusXM there have revenue that are Pandora the on was revenue, Pandora. And later those adjustments year with interplay extent that any had out? any

James Meyer

me any not chooses. in both with add in can XXXX of and terms Really and color what monetization jump let then Meaning we’re only able pleased utilization. performance to So he in David our charge but actually ads, were sell, to really optimize of were mix of sell for the able to revenue we're higher we how how we which to as our and efficient inventory to able much pleased.

And getting frankly, it in stronger of the year. kind the quarter me that strong during kept fourth surprised performance just November as in was December. And our as and

For me, normal that’s new a now.

We’ll And we're with And the continue what able team so I’m hard with really to focus we’re delivering. deliver results. be and to pleased but pushing those to the - really see.

at quite think bit. sales with some things. One, I that force being direct really of had now of well, couple that have root works a programmatic the able a a to is available and tool

able down we think an And what to everybody know number haven’t they to to getting through settling doing I do. organization, frankly were as things two, just how back

deliver stay We’re results. focused to just able those and

it you, - things Pandora I’m I will one capable is it. how with digital deliver with force the and of at what completion to tell really pleased that we’re have after able is we now audio really, I’m the year and ad sales the a merger, later the of

sales with ad quarter. well I great want in we as the to fourth in point SiriusXM out; had results

lot XXXX. ad with Jim, momentum sales is general, something a exiting really of So in

Pandora will challenging I are, two general the together great Pandora was terms XXXX and you, feel hardships a in of all through for and part feel Pandora Observations now come. own us the getting better. tell I the a SiriusXM. love and of the in and we bringing I I that companies year that fact of on difficulties lot is

behind to that really of that. the pleased We’re future. the that what that I’m for I’m up is doing vast with us. And majority happy say sets

David Frear

almost growing and to ad bringing we walk into last Jim, what like able - AdsWizz it the just and in Pandora's as tech months, And been put platform sold two has With in SiriusXM in, to sort have the So see brought on product a to also it’s the I’d business customer Pandora test off-platform part add strategy. couple and things that. of as like of really that up in. a then of

to And pretty I at it that admit approach how surprised is. I’m in have simple

the well their simply awful business. off-platform out no the scale. think In there who of audio advertisers lot an audio, digital so aren’t digital it I are to bother ad for of direct enough growth there into agencies big hook just augurs for platform, providers than the to the

But I with relationship ad the with tech think the SoundCloud play be really Pandora done the on with our SiriusXM to and then And players then of you into Pandora's could with saw integrated App we'll party, opportunity sold what as honestly be never able smaller tech, to what out other customers. a additional with audience sales reach, giving us own. and for like system AdsWizz brings stack the plug that can can an to lot monetize story we that have that

that. see to happy really So

And what you’re to have probably more the really million reached really the then to means strategy And the at XXX just million you platform, side we’re people people. SoundCloud XXX that out is America. than if learning thing in it other looking on North include

that’s And comments. opens good as as area programming talked industry and Scott's think a opened the in it perspective. box do Jim really they could about team for up I of But that’s kind from unexpected just what done our what their People an be of with see we're lot thinking to up the going to platform. benefits. can that a in also his

Jim Goss

having SiriusXM increase the wideband wonder - it get was that merged? And wondering provides, to does thing, from chipset. years the once mentioned Okay. might are I platforms you want few transition completely And beyond assisted you a where spectrum one some you monetize the now other likelihood point the to of

James Meyer

out say is been tech and has would this later create Jim in place chipset, put investment this more rolling we to than will to the for I ago this what five delivered in began So begin planning beginning which of now year. years terms

goes, us in Very for way clearly of us increase that's decade. of comment to to with the provide awful to I ability the it. lot I’m on us think is use But provide chipset not tell plays where it best it you, optionality customers, out that how we choose our to is it say optionality does middle ready to and if does I right that significantly How now. the what offering - will the

Jim Goss

much. Okay. Thanks very

Operator

America Ehrlich Next from comes Please ahead. of Securities. Jessica question go Reif Bank from

Jessica Reif Ehrlich

A couple of you. Okay. Thank questions.

you ad Doesn't First, that could of use are incremental seem sales lot you like digital explain same the the force there business? opportunity of costs? how long-term for a podcast

secondly, the then that audience can benefits been from talk about the finding?. you’ve of expect some And you you

You moved to [ph] you sports, there YouTube UNINTERRUPTED? ask Is room wanted now know, I which interesting area. is Drake beyond into a and really but about

you these pay could do you there – just fees? for stay And talk incentive little What's share? you. the a how bit they you? the Is them Thank a you deals? about revenue structure artist to Are with

James Meyer

comments let me Jess, of couple a make So first.

are you, And of maximize that right. audio digital scalable. take that. I Your agree we the advertising, across those should And sales we'll yes, with is that will those is where XXX% opportunities sell to And have. there be observation we force advantage

it's whole other worrying to I certainly And like things really David some going. and quickly I space for what do are can it me think of in think And I some world a there. opportunities new know at further. hinted I that's that our we're where we scale

your think correct. candidly are I observations So

into going don't And a will have where two, least always start Pandora. those SiriusXM that would observation. we're brand. cross see - at ever with two kind I certainly Number I I in here; the don't of general and one necessarily, brands to I mid-term, believe

tell is how surprised the how over most the However, the they've me year together well I you thing and last consumer will that the well that. dovetailed accepts

So how least advertising. of brought be Pandora. you see and And that than size forward of have events in both been they're our in be just couple they way at to it frankly brought, to and in in can loves almost in last talent events, that they down the able weeks that they're a particularly that it most we subscription across includes love our to co-branded And the of the a of able SiriusXM more and platform size. be all even that monetized Miami frankly, exposed

How deal But and clear we'll with you, do with does way how our work it. of we - it's about we all think it that can it our a I'm don't both probably where today deal, a work on I'll I don't forward, how brands not sure going we evolve. both comment, any tell of deals platforms a do does how can those optimize we and don't Scott in exactly work talent will let

Scott? So

Scott Greenstein

Yeah.

things, Jessica. two So

done we'll First, Sirius Uninterrupted we'll briefly podcasting cover one and and at always we've things then the at On duration. is podcasting, ultimately concept. and the the of artist Pandora continue

that's do what think well. we I

you. that of of to ever if think the it's there might I sort of volume duration and lack everything a for And audio needs was type product be find now, ability right it podcasting of to that the due

well podcasting I you very channels organize of way think other So coming think on and of did the we could sometimes music that things. may vertically-integrated

one. that's So number

coming of algorithmically-generated inception are space is the podcasting audio started out meaning scratch, they given most from in of based out just of companies. they two, Number or

that are audio in capabilities bigger of with content. what for quality the high the comes and with brand anybody decade out as they they want last, talent go podcasting up our of done And quality the audio artist, or lot the an producing over terms the want. other line in for and to a sure us are a audio more integrity you else, than of reasons us and signing production A we've make

traction, UNINTERRUPTED, XX that very it, two not it is go. other the over last, for Almost following that group many and see the but coming really and culture weeks, LeBron's good with had mean sports music every we're together. athletes. in Pandora, years, and interested of bigger music social starting than more playlist the where over athletes pretty firmly the are precedent on of that media but they're can playlist deal of particularly obviously coming passionate putting in another there American from only very are athletes that some about to excited general, I most than that intersection On idea the about And also now is intersected. I’m media these companies in

and said, on they into When as we Ultimately, will Drake UNINTERRUPTED Sirius Jim have channel. a playlist components. radio it launch, evolve will launch will UX channels benefit as and

as formula, continue. that will So we mentioned before,

excited pretty that. we're So about

James Meyer

forward. a is to entertainment also understand I clearly podcasting will want part Jim. I this comment more on - one believe audio of just I certainly I going to want relative make and be is, podcasting podcasting. that

so medium. we're as audio entertainment, should on And focused entertainment assume acutely that an you

going is believe enough be, space. in to and our show space dominated major we're two, amount by names at that believe the least we is and going going direction And Number of However, by that proper there. talent. to be brands we said what discipline probably to

think you're so And see. that's going I to what

to what approach, how us Santa the going which I call lot nobody can flea how to more satisfied. see much big stuff would a really as in I that want can of environment an find is can difficult make they be from to You're and what Monica market opposed and have it's perhaps where I

service we’ve Remember, work expect and we experience. audio spoken culture been introduced and us as the nothing part our from day believed you of offering first that forward. our always of in that our entertainment less should It's part for than going the

Jessica Reif Ehrlich

you. Great. Thank

Operator

Please We will question and from Silver Zack take our B. next ahead. go Riley, final at FBR.

Zack Silver

sub November stable you Based on other line, relatively guidance for this in and select the at revenue plans. ARPU odd and in for growth some the did January in assumes service of with you the bit a Great. assuming seems the of the taking back and self-pay back revenue guidance price just Thanks the trends XXXX Okay. access all the issued question. seems on and deceleration it guys a like radio for hikes the some satellite

the the lines? talk maybe is just go need there assumptions and you we rethink our Can to some disconnect or revenue other about for back what of driving

David Frear

But when late increase XXXX the ARPU the plans. was only fall the we rolls through in right that did Sure. of increases the the the the of hit - drove or all plans. at that price the in what beginning that the we of through some It's went did maybe increase of - end fee our 'XX, in our year royalty music

that's And as - it's less just so while plans, had bit it just little doesn't many we're 'XX. than hit a going ARPU because the to growth have tailwind that in we

see ARPU we've been that decade, I year. think if guiding couple people saying sort And in that think ARPU. of years to. to increases our expect X.X% inflation of should number over mean back of out of time, life for you And you we've been last We've a the over long-term averaged growth look I sort the years; to per been above the has last about

bit So this mean a you've just reversion little a seen of year.

Zack Silver

then Got it. could. I one more if And

as some offering? you testing either there's by about bundle those it think existing report been some sense learnings make users I one Pandora early other talk Sirius any you to and from and have the Can service. cross-selling guys for existing Pandora Sirius to and been testing or maybe when this

David Frear

market people streaming. saturated it I with the we'll is don't that mean I think States United think pillar time. That's point the look in is key being over audio pretty at well million strategy. should over something this at of of you a XXX sort of

certainly distributed. AM FM companies and and distributed, is fully radio the streaming fully distributed, And are fully we’re

it different sort test these things. So should of

You're really looking for niche interest.

Zack Silver

much, Got it. David. Thank you very

David Frear

a Thanks lot.

James Meyer

you for call. We'll thanks to everybody and participating today's soon. Zach, in Thanks, talk

Hooper Stevens	Senior Vice President, Investor Relations & Finance
James Meyer	Chief Executive Officer
David Frear	Senior Executive Vice President & Chief Financial Officer
Scott Greenstein	President & Chief Content Officer
Jennifer Witz	President, Sales, Marketing & Operations
Ben Swinburne	Morgan Stanley
Steven Cahall	Wells Fargo
Jim Goss	Barrington Research
Jessica Reif Ehrlich	Bank of America Securities
Zack Silver	B. Riley, FBR

Sirius XM (SIRI) 4 Feb 202019 Q4 Earnings call transcript