Sirius XM Holdings Inc at UBS Global Media & Communications Conference Transcript

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

Question: Batya Levi - UBS Securities LLC - Analyst : Right? Okay. I do want to dig in on all those parts, but maybe if we can just start with the product itself, I remember talking about the platform last year. What were some of the learnings that made you make switch and what features did not really hold and how can you change those from here?

Question: Batya Levi - UBS Securities LLC - Analyst : In terms of the 360L adoption, I think last year was 35%, now 40%. Is that within your expectation? Or is it growing slower?

Question: Batya Levi - UBS Securities LLC - Analyst : I think we'll go through all the guidance that you provided, but you also had a data point where you expect this year's self-pay subscribers to be more versus a year ago. Does that hold for 4Q as well? So would it be more than 131 million?

Question: Batya Levi - UBS Securities LLC - Analyst : Okay. Can we talk a little bit about what you're seeing with the new price point that you launched, the $9.95 and maybe how and when the free trial ends, how much of the customers you can capture with the new price points?

Question: Batya Levi - UBS Securities LLC - Analyst : Let's talk a little bit about your revenue guidance for next year. So it steps down from this year. Is it mostly subscription-driven because of maybe lower ARPU flowing through the system? Or maybe we'll talk about advertising as well, but maybe you can give us pieces of that step down?

Question: Batya Levi - UBS Securities LLC - Analyst : I think third quarter ARPU was declining about 3%, low single digits. So would you expect that to accelerate? Or maybe stay at that level? And then with the price increase, maybe?

Question: Batya Levi - UBS Securities LLC - Analyst : How about the platinum mix? Is that segment growing?

Question: Batya Levi - UBS Securities LLC - Analyst : Maybe let's shift a little bit to Pandora. How does Pandora fit in the new strategy and the sort of the opportunity to bundle it, we're curious and if that would be accretive from your perspective, from a monetization perspective?

Question: Batya Levi - UBS Securities LLC - Analyst : Right. But do you also see some cannibalization like ads?

Question: Batya Levi - UBS Securities LLC - Analyst : Okay. And then on advertising, I guess what we saw since the beginning of the year, maybe a lot of inventory flooding the market pressure on CPMs. And you talked about that also fit in the third quarter. Is that continuing? Or what are you seeing from an advertising perspective?

Question: Batya Levi - UBS Securities LLC - Analyst : Was political much of a help?

Question: Batya Levi - UBS Securities LLC - Analyst : Okay. And I think you had last quarter, lowered the advertising revenue guidance by $75 million. Some of it was already reflected in the third quarter numbers. How was the weight between the two quarters?

Question: Batya Levi - UBS Securities LLC - Analyst : Fair enough. Yesterday, we had an advertising panel, and they were thinking of audio advertising staying still growing, but very low single digits and not really improving that much. what are you sort of including in your guidance for '25?

Question: Batya Levi - UBS Securities LLC - Analyst : In terms -- I think we talked a little bit about it last year also structurally advertising on a video platform versus an audio platform. Is that improving on the audio side as you add more podcast inventory? Or is the inventory not growing fast enough? To capture that engagement? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 7:15PM, SIRI.OQ - Sirius XM Holdings Inc at UBS Global Media & Communications Conference

Question: Batya Levi - UBS Securities LLC - Analyst : And how do you think about the expansion of that supported here on the SiriusXM side?

Question: Batya Levi - UBS Securities LLC - Analyst : Do you think '25 will be the year to ramp these products?

Question: Batya Levi - UBS Securities LLC - Analyst : One question that I in treated about in terms of Alex Cooper exclusivity. But in terms of -- I think you have exclusive rights on the advertising side, but the podcast would still be available on other platforms. So how do you think that inclusion will drive more engagement or more younger demographics to come to your platform?

Question: Batya Levi - UBS Securities LLC - Analyst : Right. And specifically for Alex Cooper, those two channels will be exclusive to serious? Do you have the ability to sublicense some of her content to other DSPs?

Question: Batya Levi - UBS Securities LLC - Analyst : Right. Can you help us think about the profitability of an exclusive deal like that? Initially, hire costs and as monetization picks up, making money on this investment, but how long would that take? Or what's included in your? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 7:15PM, SIRI.OQ - Sirius XM Holdings Inc at UBS Global Media & Communications Conference

Question: Batya Levi - UBS Securities LLC - Analyst : Okay. So let's talk a little bit about your overall cost structure and the margin trajectory going forward. You announced another $200 million cost-cutting opportunity. Can you talk to us a little bit about where that will come from? And maybe kind of how does that differ from the original $200 million that we saw?

Question: Batya Levi - UBS Securities LLC - Analyst : Right. Maybe on the OpEx and implementation of AI. Where are we in terms of that phase? And interestingly, some of the subscription based companies talk about using AI as a driver for lower cost, but also eliminating that opportunity to Upsell when the customer calls in. So how do you deal with that dynamic?

Question: Batya Levi - UBS Securities LLC - Analyst : And you would expect that to ramp up in '25 all those capabilities?

Question: Batya Levi - UBS Securities LLC - Analyst : Put in. Okay. And maybe a couple of other partnerships that you've announced with Walmart and ESPN+, how do we think about those impacts on the cost side? And maybe monetization?

Question: Batya Levi - UBS Securities LLC - Analyst : That's a bit of a share of cost, I guess?

Question: Batya Levi - UBS Securities LLC - Analyst : And you mentioned that the recent or maybe '24 cost savings were mostly invested back in the business in terms of add back and getting the new platform up and running. From here on, that will continue, but to a less extent, is that right? Is the $200 million run rate more of a net number exiting the year?

Question: Batya Levi - UBS Securities LLC - Analyst : Right. So I think originally, the guidance was one more year of elevated non-satellite CapEx. Are you giving them less of a budget to play with?

Question: Batya Levi - UBS Securities LLC - Analyst : Right. Okay. And maybe a couple of minutes left, let's end with that. A bit of change. I actually thought this year's free cash flow, you had a lot of deal-related expenses, and that lowered it otherwise, it was flat. And you maintain that. And I think next year, there's a bit of a step down, and that's more operational-driven?

Question: Batya Levi - UBS Securities LLC - Analyst : What happens in the middle? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 7:15PM, SIRI.OQ - Sirius XM Holdings Inc at UBS Global Media & Communications Conference

Question: Batya Levi - UBS Securities LLC - Analyst : '26. starts to ramp as well?

Question: Batya Levi - UBS Securities LLC - Analyst : And maybe finally, on the dividend, the buyback and the leverage, leverage steps down to about 3.6 times?

Question: Batya Levi - UBS Securities LLC - Analyst : Right. That's a great place to end it. Thank you so much.