Sirius XM Holdings Inc at JPMorgan Global Technology, Media and Communications Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Sebastiano Petti - JP Morgan - Analyst : <_ALACRA_META_ABSTRACT>So it's been a little over five months since you pivoted the business towards super serving your core in car audience. Talk about seeing some early benefits of the strategic shift on the 1Q call. What gives you confidence that this is the right long-term growth strategy for Siri?

Question: Sebastiano Petti - JP Morgan - Analyst : Great. And then on the tariff front, on the call, Tom noted that not only continues to sleep well at night, which is good, but he also does -- yes, yes. but does also expect subscriber results -- does not expect subscriber results or CapEx to be impacted by the recent tariff announcements. Obviously, things have changed a little bit here. But as we look out just last week, Manheim used car index rose to the highest level since October of '23. So while down a little bit month-over-month in April, still remains at elevated levels, any update in terms of the -- versus those expectations for the years on the tariff side?

Question: Sebastiano Petti - JP Morgan - Analyst : Great. Okay. Now thinking about churn and engagement, some of the stuff you kind of talked about was encouraging on the call. And you highlighted that Siri saw the highest quarterly customer satisfaction ever which was the driver of the strong churn performance that you just did touch on with churn down across all three categories, which I think is notable. So what are the contributors to that improved CSAT I mean, is it strictly a function of engagement? Is it just the enhanced listening experience? You talked about 360L, other maybe out of car trials and products initiatives. Well, content pricing and packaging, what's the silver bullet there?

Question: Sebastiano Petti - JP Morgan - Analyst : And so it seems as though you expect these churn tailwinds to continue as you -- particularly as you move away from the churn as -- from the rate event.

Question: Sebastiano Petti - JP Morgan - Analyst : Got it. And then the improved engagement, I would imagine that's coming from your established core base more so than the modular tiers as kind of rolled out, right? It's just a --

Question: Sebastiano Petti - JP Morgan - Analyst : Got it. And then so with the new modular tiers and Siri's efforts to broaden the TAM, so you're focused on this broadening the portfolio of offers to meet the more price-sensitive, younger demos in the market. I guess what gives you confidence that the $999 plan will, in fact, broaden your TAM? And I guess the main concern we hear from investors is perhaps the unintended consequences perhaps a down tiering within the base. So I guess, how do you manage that?

Question: Sebastiano Petti - JP Morgan - Analyst : Any learnings from the rollout of the modular tier? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 2:10PM, SIRI.OQ - Sirius XM Holdings Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Sebastiano Petti - JP Morgan - Analyst : Okay. And as -- and lastly, as we kind of wrap up on the broadening of the TAM, share some similar -- the strategy does share some similarities with the push into digital and streaming over the last couple of years. Does the in-car centric modular strategy, though, does that inevitably pit you against some of the same competitors that you kind of faced on the digital side? I mean is the modular tier intended to be -- I guess, complementary to DSP services. That was kind of the digital strategy. And so maybe what are the key areas of differentiation we should be thinking?

Question: Sebastiano Petti - JP Morgan - Analyst : Got it. And so for management expects core in-car net adds to improve in 2025, excluding the onetimers, you did talk about a couple of hundred thousand there. But based upon first quarter results and investor feedback, it seems that the guide for the year could be perhaps somewhat conservative. I guess what should we be thinking about there as you -- for the trajectory over the course of the year in terms of net adds. Is it just maybe the unknowns that may be coming with the click to cancel? Is that what. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 2:10PM, SIRI.OQ - Sirius XM Holdings Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Sebastiano Petti - JP Morgan - Analyst : Okay. And -- so -- but you are confident that this couple of hundred thousand losses is still perhaps right level?

Question: Sebastiano Petti - JP Morgan - Analyst : Got it. And then obviously, notwithstanding what might occur Well, at this point, I guess, the SAR and auto sales are kind of almost fully baked as we are sitting here in May, given your trial funnel.

Question: Sebastiano Petti - JP Morgan - Analyst : Great. And then with ARPU expectations, maybe help us think about how to -- the cadence of ARPU in terms of 2025, particularly as we think about -- in the second quarter here, we'll have a full quarter of the recent rate event. You also have the efforts towards the rollout of the modular tier and improving the sell-in there of the add-on packages. And then you have easier comps in the second half as well. And so maybe help us think about the trajectory there and do you still expect to return to ARPU growth in the second half? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 2:10PM, SIRI.OQ - Sirius XM Holdings Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Sebastiano Petti - JP Morgan - Analyst : Okay. So it seems as though the sell-in of add-ons pretty -- is moving along nicely if you're effective -- given you're seeing higher demand at the top end of that. But as you think about that and revenue maximization is the biggest swing factor? Is it more -- how do we think about that on a reverse volume perspective in terms of the trend of the top line and the subscription side, maybe in '25 and in 2026. Is it getting the sell-in, the add-on tier, right? Is that getting that right? Is that the key benefit? Or is it more volume based or just maybe the key priorities that you?

Question: Sebastiano Petti - JP Morgan - Analyst : Any details perhaps about the ad support subscription timing role out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 2:10PM, SIRI.OQ - Sirius XM Holdings Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Sebastiano Petti - JP Morgan - Analyst : Great. And great segue because as we kind of think about advertising in the first quarter, maybe a bit better than feared following Tom's update in mid-March. You cited some pockets of weakness perhaps in travel autos and retail is offset by strength in pharma and telco. Any update on ad trends since the call in terms of what you're seeing out there?

Question: Sebastiano Petti - JP Morgan - Analyst : Awesome. Okay. And you did cite in terms of on the call, you touched on it a little bit there in terms of the late bookings, but your broad portfolio of ad solutions across broadcast, streaming and podcast as well as your reach, this is an area of differentiation in the market for Siri. I guess tell us more about why is Siri well positioned to get benefit from this shift towards short-term performance marketing?

Question: Sebastiano Petti - JP Morgan - Analyst : Yes, tell us a little bit more about the Creator Connect solution.

Question: Sebastiano Petti - JP Morgan - Analyst : Great. And I think as we wrap up here, thinking about just target program of $200 million of run rate savings by year-end. A big focus for the team. You achieved $30 million of those savings in the first quarter. But unlike cost programs in 2023 and 2024, most of these savings are expected to fall to the bottom line. However, guidance does imply margin contraction year-over-year. And so maybe help us think about the main factors driving that? What are the levers to return the business back to margin expansion?

Question: Sebastiano Petti - JP Morgan - Analyst : Got it. And then I think I asked this on the call as well, but strong EBITDA out the gate, guidance maintained no impact from the tariffs. There maybe was a little bit of a benefit perhaps as you think about the spend of some timing spend and some easier comps. But guidance somewhat argue peers somewhat conservative given your cost momentum and the better subs in the first quarter. Obviously, back half of the year, some impact on subscriber side, but help us think about why the conservatism from the team? And could we see upside to guidance if visibility were to improve on the advertising side?

Question: Sebastiano Petti - JP Morgan - Analyst : And in terms of leverage, help us think about the management team's views on, I guess, just the glide path to returning your target leverage back to the low to mid-3 times range. We forecast net leverage of 3.3 exiting 2026, which definitionally gets you to the low to midpoint of the range. But just help us think about how you're balancing the deleveraging opportunities versus opportunistic share repurchases given valuation.

Question: Sebastiano Petti - JP Morgan - Analyst : Well, a good segue. And I think you did kind of touch upon maybe there's additional opportunities on the CapEx and OpEx side. But as we think about longer-term reductions in perhaps non-satellite CapEx, Tom commented on the call that he and Wayne are scrutinizing non-satellite CapEx spend. But just help us think about the near-term pressures in the non-satellite CapEx side. When REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 2:10PM, SIRI.OQ - Sirius XM Holdings Inc at JPMorgan Global Technology, Media and Communications Conference will those ameliorate? And then what are some other potential non-satellite CapEx efficiencies you can squeeze out of the business? Any color there?

Question: Sebastiano Petti - JP Morgan - Analyst : Just so as of next year as you kind of think about that level of spend on the non-settled. Alright. Well, Jennifer, thank you so much for being here and joining us today, and thanks, everyone. Enjoy the rest of your day.