SIRI - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, good morning and welcome to the SiriusXM's First Quarter 2020 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 conference over to Hooper Stevens, Senior Vice President, Investor Relations and Finance. Mr. ahead. go please Stevens,

Hooper Stevens

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

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

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

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

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

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

James Meyer

morning. Hooper good and Thanks,

our plenty world changed of quarter strong very since was would in the at of performance you Give your very dramatically Yet you a and questions. recent exactly from first onset The We look has are going brief. expect for it the health weeks crisis. reserve us. and time to economic kind trends and COVID-XX rapidly, of keep further

first record EBITDA grew had a XX% revenue by growth to quarter subscribers, solid level. and grew adjusted We

We time, not model. from powerful this years year positive a business are benefit expect in subscription while generate we this And substantial fortunate at and flows come. to we’re guidance to to providing cash

priorities continuity. to orders biggest materially we in stay-at-home of crisis swiftly always business alter and manage our well-being work. be to employees Global the Our and ensure the were way the

All with of This have our home migrated in to responded days. teams. from X,XXX and speed and HR teams required We from effort creativity. a work employees tremendous IT and mere our contractors

and our increasing our to center We and rates experienced reducing sales fell handle IT, a customer enhancing campaigns. center variety systems. online teams call needs of support IVR levels and enabling abandoned disruption tools of Staffing substantial more ability staffing. a hold lengthening center capability call response, of call and actions, self-care than agents operations took our to online times, X,XXX increasing chat XX% marketing to including XX%, our through and In our significantly work-at-home, our

well to an as easy well free Americans stream subscribers a With staying offerings unique made in are I to as here, July. levels it to vital But launched our get as defense period. playing are June have more. information. most Americans back access expect more existing get listening and we we of orders or to home, stream drive SiriusXM, and very to us We stay-at-home of our for until improvement normal news online don't lifted, make We see us to to significant as offense to awareness our opportunity streaming perhaps but occasion get

been has Our overdrive. programming group in

people people ever, share like service helps experience. these, changing more right our our has Our great, In company brings now gives together, national sounds us only and content but it's been remarkable. super response not relevant the than times and

special as ones, companies to media replace Garth Taylor and canceled one the Swift, Music have DJ more home home Taylor more first recently Paul Governor phenomenal Andrew Ultra were participated of for with performances many conducted and Springsteen, from Stagecouch. for sets Tom Brooks We Cuomo Howard Smith, with virtual to our and Brady, interviews and his Bruce in Stern McCartney. we listeners. the did has create Festival events And

And of I'm we a Andy Norman full healthy time report female She's for comics. shows and We comedy is So that created to all a works doing Funny, to Cohen based his new Greg talk Hart did back K special show. Coach could and laugh use happy and made exclusive return Kevin the -- a on channel us. shows. Greg

an satellite Health, launched NYU more from has and the active Radio King of she full coronavirus. Doctor Very enlisted Langone We a Gayle a our to which made gravity announced channel even powered radios. the early the before channel crisis decade for crisis. this where inactive by time than new understood, about to fully we channel March, free Americans week, both exclusive during weekly available on hears and we was show create Last talks and in this

of from listeners so are the astonishing podcast our questions the future. fact Doctor special from minds. in our of both vital medical This is available everyone's information and on to central demand medical country's to daily daily the are along providing answer Radio created and frontlines, widely, we fielding with has coronavirus and kind programming, become that on and stories personnel making a based reports source channel experts, calls from

could excellence that uninterrupted. customer to audio possible service short, We we come steps continue the provided our took would you’ve of to to best operate with entertainment business the And ensure we level be service. not difficult In quickly a from strong SiriusXM focused building this make But I is also still the for during foundations expect on period. teams and growth. our no be performance efforts of mistake, the long-term of more proud SiriusXM.

in I've to car way later that about Our first XX% the new XX% rate obtaining on this penetration to quarter the rose talked its year.

offer. of streaming contracts extend to our and OEM the rollouts continue increase We further XXXL quality

deepens in agreement. with builds ad February SoundCloud in our and sales our company investing the successful relationship Our upon

is largest discovered understand the being their to them combined plays and now with platforms opportunity world ecosystem. and Pandora, XXX North the tools of audio rising SoundCloud SiriusXM music we the the in the to critical reach gives is open of in and role a million artists can the It helps one America. content When reach listeners offer how advertisers consumed. in get

next innovative difficult be revenues This that It's digital advertising shareholders enormous our everyone just than XX:XX this employees, over can predict weather extremely mix, strategic reach X X benefit unique, like subscription and the a what technology position. capabilities to crisis else. to upside asset will our growing most better our we storm a But will a I will months bring, in this are long-term. ends. And take hit tremendous our ad powerful talented to to with advertising the with SiriusXM you will companies finally when model capture a and business positioned financial well-positioned also assure is strong

fresh we Of in opportunity. squeeze possible, have are spending nearly are taking the paused everything putting while we see and course, a look all many we tight other where a investing at companies, hiring, business. we Like on still where

and guided our stakeholders all smart to both empathy by be of response economics. will Our

to fantastic have service Pandora to primary a continue of value attractive easy use good present because Our and and to remain and very keep content we we we proposition. SiriusXM consumers brands the

recovery, the ever we I company's plan slope remain providing have as restart of and to the optimistic better guidance. before. view as of we Once about a future our resume

Now off the details David quarter. let to for me hand it more on

David Frear

XX% grew ads solid Thanks, added and new was million. SiriusXM's to across you XX,XXX Jim. as billion. quarter net record climbed We ARPU was from us. X.X% come quarter the self-pay X% first up board, $X revenue of $XX.XX have pro from first the to to quarter, EBITDA first expect Adjusted year-on-year. $XXX forma

flat per similarly rates at improved to car rates month, and X.X% good point a solid. Used rate year-over-year a last conversion new year's very conversion XX%. were first churn Our was versus quarter car

XX% installed XXX million, of to Our the of the enabled in grew XX% U.S. the or approximately cars vehicles on road base year-over-year

The from the the at X.X of the year-on-year to stood At basis end end million funnels at XX%. trial about the X.X XXX about points rate used car down million, of penetration quarter, total XXXX. climbed

as of that funnel the contraction of the came sales. in orders auto back March stay-at-home half All trial in reduced

of $XX.X of the new million seen March, all after healthy $XX.X Saar a Saar X. with in declines February. a in in came March million at car From

So XX% to used roughly are April, car are Not and XX%. now new dealer closed. for proxy far trial as as down in sales starts. we auto reevaluating bad showrooms A many quite close states should remain whether and thought,

X flows to through sales conversion opportunities from sales fewer However, now. -- months today lower auto

churn. partially of expected We a of quarter. benefit effect does related will churn, rise this will the auto of which vehicle reduced funnel in the see an lower involuntary provide sales third non-paid biggest in offset the Lower top activity

late a XX Conversion impact churn, canceled March. a increase starting was other but advertising which related in reduction saw We churn. partially get in see a vehicle we offset completely March, In a much point already fall small this March bigger of and have late March, non-pay buys by number in and in did voluntary basis recovered. rates

again, slowdown We or related But to payments have a consumers this we impact much yet associated sales. much debts so Bad recession seen in once not of far. or not with a in environment. increase of should ad have seen this

the these We put changed million high confirmation can't $XXX has recent of currently expect no than much together, of how I business see this model. Jim and to the as all when economy, we Given of in the in quality help XXXX. trends CapEx more

and year, SiriusXM We The cash no small is in early there push. in SiriusXM to XXXX occur expect $XX. good late very X the expected launch pushed pay satellite health is this a to this X the but fleet to be federal of currently later to amount into of expect customer XXXX. impact no The launch taxes of we still and is

in of to we in quarter stock first in that, we shareholders and with to we SoundCloud. the late put in the temporarily mentioned release $XXX capital buybacks. through returns suspended the As investment press Even March, our work

our Following completely the undrawn and is available we balance to pay quickly $X.XX which building And cash. are buyback small suspension, the in revolver, we cash flow down billion. at now used

leverage strategy Our have allocation not and changed. capital targets

we been assets March. beginning at the out February repriced the of of in end become time repurchase said global grid. date have the hit had of the stock However, clearly by We simply

Accordingly, on the resume call. next to we buyback. in at expect light economy of returns U.S. will for you look and the our update capital on a the further We take outlook this

that, it up with open operator, for And let's Q&A.

Operator

gentlemen. from We Vijay Please Jayant Evercore. take question now and our will ladies from go ahead. you, first Instructions] Thank [Operator

Your is open. line

James Ratcliffe

It's Two, James if morning. could. Good Ratcliffe I for Vijay.

mentioned in of compete change satellite the on the translates impact car amount First impact. sustained Thanks. Pandora what down the do a terms advertising adapt to in-home as quantity the on from versus front of there to And home. into price that that side? bringing of How on to -- consent side, work the to in How going the down you and balancing all, you offset and radio equation? are ability of if your part that your expectations there is increasing with subscriber secondly, and

James Meyer

I'll the -- So your half question the and first I'll will take your half and take the David David, take second take first. will of question of

returning. let demand to not listening this the last again, in So X if product significantly all, there'll country time, chunk, I candidly me Once Obviously, X change forward. of open why at is quite be big the see the I is don't over in amount the going comment. for of see, car listening a our the weeks. any down that material

for time. had been also changed. no all streaming I the think virtually strengthened said, that extra don’t have car no long SiriusXM that for glad we what way we've why? really I’m That’s see for side we subscribers, glad now the see of cost. that I'm Americans streaming our over offering with story love three -- significantly the I years. With on a see a our -- had last And we’ve their long,

So I way. either well think we're positioned

listening please? the And so advertising, all I'm demand hours forward. take question worried David, a the you about not for going all for at on can the product

David Frear

to do to to the reasons. James, host heard it I mean, talking advertisers for what see I down bring were price of can going advertising about dollars for out in really of markets to, you stimulate you what a think And bring right know you're now And cutting drop the a you back your I demand can side? Yes. or generally right, prices, you lot that we whole but not if

going but to it view this, third point were One well, if encouraging we're have of think to of take some literally -- in the that the signs, to say be it normal that advertisers hasn't the sounds book what is the order we for back see or you'd that quarter. we what to

and ads pull that, people and any can that their Now, recognizing at time. at Jim I look

quickly probably look part, advertising and think up restore to fast. for pretty decisions the time because make can people hope that's most have it You turn we know, they how about to you

have So you’re can wait and for drop we'll -- in the going you've side this to fact as dropping problem by with But the situation, got part it of and really we early here into quarter, demand the stimulate is But to just you you're that your a see. a prices. not walk prices. second

James Ratcliffe

Great. you. Thank

Operator

Thank you.

ahead. Swinburne question next Ben from go Our comes Stanley. from Morgan Please

is line open. Your

Ben Swinburne

was programming sense are, programming curious I commuting, a ways you've know the to made one driving, your couple other. you share And just structure tricky if typically ask the you guys stay-at-home about were you I this situation. I in home. also, it's you programming resonating your a how And listeners business, who as of and about, talking the during programming had expect statistics. Thanks. for if but pandemic way to with wanted not but don't satellite just cost engagement was the In the with or not impact moves,

even to continuing release pay for are There no sports. mentioned you're that in sports. I think the

structure I been question be a that the or made So be doing also really is other. thoughts. anecdotally. resonating, it's incredible. one wanted And pretty least in really which the think has the content, I broadly. a bigger impacting to then kind may It's engagement it stuff moves how not of And around the way to platform much cost Howard's on at that question, of some but impacting or get the And your been that you’ve seemed how

James Meyer

to So, and words. I'll of say Jim. David Ben, on costs. couple wrap And ask I then a up or to quick it's start will Scott

have to like right and of air ad, content paid foremost, now. the and I a on first want this So I political but we couldn't proud sound more don't be the

from team that, outside has so quickly content or provide is content of of without worked a it's of all of that to from environment studios virtually transitioned country had SIRIUSXM. studios where big of Furthermore, being support the today talent I think to outside our an our us, the the reason X expect probably around produced X listeners part Our we the be. just -- national to tremendous able our be to from where we out our

queue ago. ever on small had I show on in channel. various we how I a can Examples compound give the that calls couple side, many from we you Fred I'll call The the just SiriusXM one. side. on on Channel have will own tell top to How you the Golf instance, we programming on being, is response do our being for received. subjects? what did any a listeners and barometers receive of for to weeks Couples our we've it's the then understand that was a think, longer, seen

And … a good so there's

David Frear

Jim, Greg Norman. It's

James Meyer

people Greg Norman, sorry, I’m listening.

and it's more we know that. resonating couldn't with be we pleased so, And

On Pandora we quite definitely come a have seen our we would to be. listening. expected still back has it the recently, It in side, not have but where downturn

begin to or which car. what get get outside will do so all in we're shows to I And back we're normal of and to the we obviously, work. day, virus between And impact stay-at-home once understanding time change going every also back the lot is community expect a to on return that. that now. of Americans of right that to going spending to working know back the flip were the Most related

want to you quickly add? anything Scott, So,

Scott Greenstein

Yes, just quick.

I take those of that continues downplay off the least the of the out people and and note of far with could any we couple anybody we everything Howard generated else things day. and led to media there. think, yes, community live, compared of a want audience One, could and calls, even it community to than I we in to could That just people way which go shows normal at both just normal kicked there. So that social realizing the don't more amount

day that with shows stuff, digging a to to sessions day Cool engaged us unique that and [indiscernible] Beastie and DJ wants the using there'll Hits and talent led in Jimmy that is it from do will then a really live way led fact have J. time. others clock. Taylor each Swift of lot [indiscernible], unique stars obviously just that Bruce to channels just host functioning get people more And really continues the Fallon their Hits we around to to because work in And then shortly coming hosts to the like saying [indiscernible] be radio the Just every I Boys to and guest LL during [indiscernible] that service and and of

couldn't Jim I and be just back will some more getting said, them. as and a we're started as proud, come lot So like it continue learned we've to we of this from

Scott Greenstein

Do Go to Jim. -- sorry, ahead, on want comment you

David Frear

you Jim mentioned you the One orders, we of stay-at-home markets that commute looked Yes, listening track And on changes thing times. Ben. change we've them. of and -- don't data a trend at at commute. directly we stronger the to look Pandora have track There's Pandora listening, and to can more And directly lot markets can if the and the and listening with the

We have speakers. picked the smart quite whole growth in CE a with bit on up devices

But So of for people in up to of doesn't actually loss the we pickup sort make see the transitioning effectively different location. did a CE commute.

On there contracts we some a the what's happened. cost where have are given expenses lower few have we -- side,

side, of remain advertising costs most the them of for -- for part to the demand the same. some are programming but related on the And reduced the

Scott Greenstein

Got it. you all. Thank

Operator

you. Thank

go ahead. our Cahall take Please from now Wells from next question will Fargo. Steven We

Your open. line is

Steven Cahall

Thanks.

sort were it in down and about churn way bit can terms those churn cycle? And churn. bit you the you of starts of churn versus little XX% vehicle be about how trial little 'XX? said think dynamics acting then that thought. And lower trended Could the talk neutral net a out that this talked a little to have XXXX a better you do you two maybe than in the forces in are to involuntary about XX%, was You the

there's to soon that's we the the of it funnel about decline You or to SAC I can you that Maybe sort is us expect? too assume expense. And make help when think just as to start think big starts shrinks, pretty tell? peak Thanks. offset the down SAC how the should to comes a the shift? funnel of much

James Meyer

So to those some of respond David will individually.

make was Just before. to powerful have we in near penetrated that we XXXX, used anywhere and just as we today in one weren't XXXX and car today. I want do did funnel Remember, not near the point we a are where fleet as

take lot frame. other. from is said, where can to time anything So lessons help the David, us I’m With of over the from it really that non-pay to a period But going I predict I that involuntary going you. that's we believe behave one offset that don't during to there's turn how believe to going

David Frear

now about -- were average said the customer Yes, we and 'XX, the growth the out recession general the Jim income. of driving recession kind because and of above sort with early the is of into the business. XXXX, We're second their representative the owner base what population Sure. more of in late demographic of

don't -- to to expect be And going know, so find we're we out. we would

that have say what So as better But we in have late where as would right average expect customer still is, average out don't income. but will I on quite last I'm early base than be a as the know that demographics answer now, you going tell I quite we to time. we the

should to should we been kind more the related we spike, level X.X churn, customer do less a recession than being a expect don't hard of How pressed churn time they a be base from So have -- of spike much of that last a quite be we spike. much believe we've had resistant. at component less I because around. same a little guess. for rise in to expect the that vehicle But sort of % of churn are that the wouldn't the But while. anybody's a this bigger

trial it SAC, in starts of combination the On one-for-one. between is sort the a those, SAC,

new to all you on from go up down end million expect come that back you take that that. you're sales those XX make to if the would just SAC a the later. XX going you to the you and In spike car bit other As other ultimately on think little less end your car down unless sales end you're going recover words, with up production to

so for absolutely So have now. not you shut a we a the what they're lot And other factors, of in in the your that is. making the In automakers volume recovery that's meantime, result to forecast plants what expectations going to reduction, know the have cars down fact.

Steven Cahall

you. Thank Great.

Operator

take We'll Reif from next Jessica you. question our Please America. Thank Ehrlich of ahead. go Bank from

Your line is open.

Jessica Reif Ehrlich

you. or question is My for first Thank Scott David. Jim then Hi. and for

then the be David, release a So company. Maybe possibly announcement. confidence Do side, maybe for seems you. something there's contract. back could it color could the I'm paying content, and to It just -- flexibility like towards on first us but morning what as you then send leaning on efficient, color that business can talk contracts? give longer have ideas feel -- Thank you with when there to his sound buyback? said, it are the Stern go or And sounds finally, wondering amazingly contracts? does from resuming on show still about the you if these you confidence from going confident any open you're the And there operations or that us guess on, term give sports said was you're this on in I in something that. the vote on happens good what like just leagues now? an of the like Can long-term Howard more he's impact return like what's And what an you get you there? and to just you seems says, it the what's must the then opportunity going any you to change to

James Meyer

Okay.

So yes, X was X or it think a Jessica, I X part -- question.

ring can if an take to Scott on want. try sports then anything savings. be I'll … the question add I'll So leader. you I'll quickly effective Howard. And comment David the on

David Frear

Yes.

James Meyer

… take rest. will the

But, the end I the to of in the Buchwald, who's actually the those the be Don have discussions couldn't I quarter show discussions. at I actually agent. place do for to set number of couple enough -- to So begin this -- begin chat more begin but have quite want begin listeners more a not held be to day, put able clear. to with quality find that of as third rather, for say try formalization long And to Obviously, that. better bringing better Howard to a have concerned Don relationship hope as we one, days And I SiriusXM year person. those think call. have with I've don't our I'll and as our spoke cadence Howard I most really I'm more expire know again, we I've haven't through importantly, and does that I better. together to Howard's tremendous a path I contract importantly, Stern discussions wants work. been won't be place think the working way takes -- been when -- proud And coronavirus on in there. to been I Howard I discussions Howard's Howard with I aside forward. as to I of taking think he's said on often, I’ve even never of I had. couldn't it's time we to a every Howard and are we've put maybe ago. some and or find

side, can road. argument tell programming that you a no the I argument, sports there's down or gigantic been the On

David to all for get get back and discussions concern kinds air number don't to content pretty foremost, it David, First ago, you our I started will league There from is the well think we expect certainly it But the in minutes take subscribers any of the and cost know of one XXXX, that our contents. be our here. we on in here? couple pretty, summed love. up want is which sports the change

David Frear

I Jim, can things. two add just

James Meyer

ahead. Go

Scott Greenstein

on now Howard. the Howard Obviously, thing about has company, one the how of met, even who was proud the how for this he it had really of how morning and situation unexpected former know level his And fans, is. the even through in evolved appreciation whole didn't another given more show talking enthusiasm he of free fact importantly, just that period. many have this found show So the I listening

a I record or -- whatever. additional gives doesn’t And promote movie LA then expect addition, their tool or a studio, tool In besides Zoom an Howard That its get continue. home is guests and they an this the or this New York him major thing, new he when from talent have can to awesome. in entire to be

nothing said of you also feel going at very classic and have well, the we remember but then, So And being broadcast. over league, I many on, library Jessica, sports mean games time. there's largest time the to on many, this else Jim about there it good sports that. was we’ve

partner, best value we a David, filling better are further. we we us get that them. we deal as financials as with do leads So will the can and the and gap But, as

David Frear

We’ve good a talking business this operations, Jessica, the your a about course term this how change lot longer the one. over really on it's might last been of question six weeks.

high-touch service So customer we've been -- organization. you when know, you a as

inbound think, center outbound between I have, here. We and call staff

it, weeks And there well with opportunity and agents how the five out, coming mean to does one of that to optimize long-term do what about, it that ourselves -- configuration, drove And the things. as in world. of we into what five, really questions work well, to change, asking six us around we're We an it we're not we here. as is XXXXX performance six have this is as XX,XXX into figuring of half weeks, now or do them new in

air efficiency us as moving that lot improved we our and to of that. customers finding, actually chat way need digital you highly put know of business finding an world agents wonder we the So effective than Do experience as out Do people do? across And turn I how what you to all effective. often office and about through need more be see for can that of and much to we're make up figuring space? to are don’t this opposed but we into in awful Zoom we're the work live as working agents. we the

hard for the mentioned. start of had a is You that though gets way between G&A have hiring part used and know, clearly attention we've have and kind guys have streaming efforts But of car we to same we're at That the that a all let people's since free when pause incredibly you real can steam of to for never same this a this we do the of -- initiatives as asked that just of we a go as really And going finding really there get -- forced driving up organic say, where is past flow, alternatives were in so out that to car -- Sirius they the of a interesting turning us. to commencement lot the even to hard we cash streaming with going recession when infrastructure know is waste. look have? well we're by hard thing Jim strong more get looking people to consideration liquidity initiatives we And busy be and they we're need pursue And picked the calendar at them. good of the to to prioritizing be crisis. our in they in what’s out our afford to that what new engagement on the their

it's But the the for dislocation So, asset, other well, we're a price with. play deal we or are we It's stock. tuned these market. for is what how people the buyback, -- Clearly, have don't And at a for out. looking dislocation that to in stay just we a problem not With leverage changes confident. dislocation. liquidity our a on a are Sirius

position awful itself, with respect shape look won't there's an financial a on stock. in And acquisition. the like, for look gas. have our when step the just failed, it's what we of think good on what we a like means the with we'll recovery resources in could company that it the relates we're the hard think the take to to past, external we So of for we a hesitate at buyback we of for as value And lot believe opportunities to that

Jessica Reif Ehrlich

Right.

James Meyer

had to just One like what we've with our And I think and where where conversations just -- I'd as -- Board Jessica, up direction subject and given well as the including obviously -- with was. David Board point with like David I, expect, the we've a winds been days I'd been ago. multiple few to to add and has Board you both this would obviously recommendation exactly is, David we've on summed which up and it is the our

please. question, Next

Operator

Thank you.

Zack B. FBR. comes ahead. go Riley, Silver Our from Please next question from

is line open. Your

Zack Silver

of of back pause ex on great. Thanks contemplating can for Okay, voluntary the been taking win levers do of using talk or so first to just -- and impact material just of you far But tier downturn? you may decide any second have that some -- trajectory not. there's one sort their of to churn, sense are you the subscribers And that subscription Do takes question. then the cancel any experience what whether there's the non-pay. whether you economic of customers just year, about on should how cancelling you’re more or time kind if the puts those the tightening or in right light from it's Maybe this up cancellations discretionary Thanks. ARPU the less expenses? service because and less the are value households spending their see now on road who any

James Meyer

David, one? why don’t that you take

David Frear

Yes.

ARPU? pitches coming in made. feel less have and interactive is have sensitive thought although in in can When tried chat increase recession right? way more So, do it be on it's some got We've to in whatever than cadence to like you can IVR, on the get respects. our now you recession in can you nothing's You're we've you a used the complicated Will to to then a offers you done those simplify with No, that agent, the changed through the you take can environment streamline, do might some more really strategy, online, channels you our they'd it a through the it business, effect a offer that do offer phone, an big ARPU you agent right? streamline it things be the in to environment. less,

on what the than side more in you comments. I prepared things, the that data have On non-pay don't gave I any of

basis voluntary per really can't it, give the So always pay you not -- in point non-pay XX more total about has tried churn. and to point our been that for you increase never felt we service under $XX other to choose subscriber March, okay we We've it's at average data that the saw a you XIN of afford on that it. of,

two we at And look so the do together.

sort talking about last of together and those the two couple XXX You've point us years. of heard the over range, basis

guess, we saw point keep How sort March, posted. but XX so vehicle of related be, that anybody's forward? increase in will offset going It's sustained you churn. we'll And basis in by the a that fully

Zack Silver

Got it. Thank you.

Operator

question go Please Thank Jason now Bazinet Citi. you. We'll next our take ahead. from from

Jason Bazinet

the not share or mind on do we part as of of the that I XX versus bad of on an you numbers, car churn so. simple that to as on just And don't gross online, was question. years full-year giving expect come side us you sort comment of very quarterly had plants financial a update I gross be on new back David, for additions the ago churn you wait then crisis we sort assume peak two of to On auto the trough as just saw 'XX. churn, adds to sort a mentioned used? Thanks.

David Frear

seen as the But think see think the kind now. X.X% I remember don't going peak see, we're big think I to to again, the I don't question, I know, see both, think trying second have I … I don't it's spike, on And we'll Jason, right? of spike, think might and quarter I'm -- we we'll I it's hope I'm full-year quite But right.

James Meyer

[Indiscernible].

David Frear

about have the second way ticks, off sales the it seeing, you've with third been … see you've we related the and new conversion that past. It little back, that's materially see So gross Sure., the going faster we're probably year consistent the dampening I'm original -- be going yes, end consistent there? I I'd that. seeing. car adds, opposed dropped they effect with maybe than it of trials it's to but through of who winning couple first that share first a at surprised, what that versus car quarter in again new two from right? to in a and the don't if gross have what a that churn, the right, were to we'll you've of down admit, largely really come heard probably as new in with anything sales forward so all it's XXXX, changing trends And could and but little -- but as -- bought car the fell because of drop Yes, the of from subsequent for through quarter, new in you of XXXX go a dropping, cars, right? owner, certainly been plus going back new Jason, vehicle owner and talking quarter, after the the I adds owners original the to with winning to years see. go car,

Jason Bazinet

you. Okay, thank

James Meyer

question, can Operator, our and last we take next please?

Operator

from next ahead. from take our Bank. and Please Deutsche will Bryan question Kraft We go final

Your line is open.

Bryan Kraft

you're Pandora revenue. any the help margins declines of the of that Pandora? also, ask And the seeing a sort scenario. piece actual the revenue Can little the advertising us wanted about morning. we us how to think Thanks. revenue Hi. you about Good ad quarter-to-date? for at should to I bit the sense worst-case Pandora Just give frame ad that more on is on declining

David Frear

me you Jim? to take Do want it,

James Meyer

David. Yes, ahead. please, Go

David Frear

happening XX% and revenue. is it book we're It's with hesitant side. the new to still on only what's any a So the of provide about information the us really business to advertising

the And so their fast in right? on orders, Jim can and velocity of feel of for the the advertising change yet change think the the is the that have people in a -- part hesitation I the minds I don't how it's side.

broadcast seems on Yes, in. search there reluctance doing It with better where and advertising statistics Digital smaller a things So happening audio lot from a are is much properties. that sales properties that's than sources the really reading various little published digital what's a I’m comes of from than market broadly. bit display. out

commodity a to And way. scarcer reach people want who so, it's for that

that’s as -- the that like. So advertising on side, about much

was the question? So margin other Oh, what it. the on

Bryan Kraft

Yes.

David Frear

right? side, greater you have time costs of, a variable listening monetization. of on The completely so licenses Yes, formulations Pandora the these are associated that, of of don't or with percent sort

because that certainly to fewer demand, the decline costs can were, we be a and instead drop do down of there'll fact of little demand I than bit generally, so is demand on crisis for And from flip side. expect on into revenue. one-to-one we're is going royalties excess be that listening with right to not share drop the be the the a to you're going listening there the going the royalties But proportionately the occurring, if in so, to you of advertisers listening in to -- be otherwise doesn't the there. think unit the drop get benefit fewer there's And that and

Bryan Kraft

less we expected. Maybe were think then. one too, just -- I the down, on listening bit little a usage hours than excuse follow-up advertising side, me, The

was stepping might crisis little if looked late big of I probably second So it the seemed there but the that a COVID-XX in better, there trend not the like fall also have was wondering how in for off in number pretty bit better March. half was a much the underlying if, quarter?

James Meyer

cliff. all Well, good March we pretty a hit we off satellite the it radio we're around activity listening strong. that the very feeling X the plan we were business had time, -- were March, additions, hard until know, to fell the world of aspects that business of was And all got right? when orders about like to XX on the ad then, But you

people a yesterday, about -- a with So, commute listening track was can reduction We in had at do in Scott they Jim call feel And the of and in the and on, trends they new did I that Jennifer confident talking a was we are lot listening change to on, other are normal. we Pandora. time.

James Meyer

I Yes, to [indiscernible]. from is, Bryan, XX want and on comments. We comment is your us, first were just in observation of reiterate David said were from Jim my all, We exactly is sitting -- one right. I March what

I And of let's subscriptions. And COVID-XX. never better both I just than There's to in strength no say the quarter. I That had and model the question the have would cry is we revenue evidenced in was come get and without when no That’s normal. of revenue to first is demand only hits our not it back will milk. reason those business metrics in -- us roaring not once outstanding about both sells, spilled even -- believe we It the back it. point. ad over that oh, point better over question. first say, There gee, quarter. The an think been spilled lost is over

Bryan Kraft

Okay. for color. the you Thank

James Meyer

participating we Bryan. Stay Bryan. everyone, for speak in Thanks Good today's healthy will and call. to you Thanks, soon. Thanks, luck.

David Frear

bye. Bye, you. Thank

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
James Ratcliffe	Evercore ISI
Ben Swinburne	Morgan Stanley
Steven Cahall	Wells Fargo
Jessica Reif Ehrlich	BofA Securities, Inc.
Zack Silver	B. Riley, FBR
Jason Bazinet	Citigroup
Bryan Kraft	Deutsche Bank

Sirius XM (SIRI) 28 Apr 202020 Q1 Earnings call transcript