Greetings. Welcome to SiriusXM's First Quarter 2023 Operating and Financial Results Conference Call. At this time, all participants are in listen-only mode. A Q&A session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll turn the conference over to Hooper Stevens, Senior Vice President of Investor Relations and Finance. Mr. Stevens, you may now begin. Thank you and good morning, everyone. Welcome to SiriusXM's First Quarter 2023 Earnings Conference Call. Today we'll have prepared remarks from Jennifer Witz, our Chief Executive Officer, Sean Sullivan, our Chief Financial Officer, and Tom Barry, who will assume the position of CFO tomorrow. Scott Greenstein, our President and Chief Content Officer, will join Jennifer, Sean, and Tom to take your questions during the Q&A portion of the call. I would like to remind everyone that certain statements made during the call might be forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These and all forward-looking statements are based upon management's current beliefs and expectations and necessarily depend upon assumptions, data or methods that may be incorrect or imprecise. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For more information about those risks and uncertainties, please view SiriusXM's SEC filings in today's earnings release. We advise listeners to not rely unduly on forward-looking statements and disclaim any intent or obligation to update them. As we begin, I'd like to remind our listeners that today's call will include discussions about both actual results and adjusted results. All discussions of adjusted operating results exclude the effects of stock-based compensation. With that, I'll hand the call over to Jennifer. Thanks, Hooper. Good morning, everyone. Thank you for joining us. Before jumping into the quarter's results, I'd like to welcome Tom Barry as our incoming Chief Financial Officer. With more than a decade's experience working closely together, I know that Tom's deep institutional knowledge and broad finance experience will be invaluable as we drive growth across the business and continue our commitments to customers, employees, and shareholders. I also wanna thank Sean for his many contributions these last few years and ensuring a smooth transition. In the first quarter, we outperformed our initial financial expectations, putting us in a strong position to increase our full-year guidance for adjusted EBITDA and free cash flow. We also delivered better-than-expected ad revenue, partly due to our leading self-service and programmatic solutions that are allowing us to capture close-in bookings. I will address this more in a few minutes. As previously discussed, we reduced marketing spend, particularly around streaming, in anticipation of product improvements we are launching later this year. This contributed to the expected negative subscriber growth in the quarter. On the positive side, however, our test-and-learn strategy will enable us to improve streaming subscriber results sequentially throughout the remainder of the year, even with a lower baseline of spend. While we continue to see opportunities for a bigger streaming-only business, car sales will remain the dominant driver of our subscriber funnel. The fourth quarter's trial starts declined sequentially by 3% and 7% for new and used vehicles respectively, and this reduced conversion opportunities for us in the first quarter. Once again, we saw the seasonally higher churn we tend to see in Q1. We believe our overall subscriber performance should also trend better quarter-over-quarter as the year progresses. Supporting this, first quarter vehicle trial starts were up 7% overall compared to the fourth quarter, including a 3% rebound in new vehicle trials and an 11% rebound in used vehicle trials. SiriusXM has an incredibly solid, profitable business today that benefits from a loyal subscriber base and enviable margins. We have a service with very high satisfaction, low churn, and one of the leading ARPUs across direct-to-consumer media, not just audio. It continues to be supported by the millions of trial starts we generate each quarter through our robust and long-term OEM partnerships. Our strong distribution, investment in new product offerings, and our unmatched content offering have provided a foundation for future growth. To meet evolving consumer expectations, particularly with younger audience segments, we must address barriers such as pricing, control, and content discovery. We plan to tackle these issues with a new data-driven platform launching later this year that allows for more control of the listener experience and improved discovery, fully utilizing our unmatched content lineup. As we have always said, business models really do matter. We intend to make prudent decisions to remain a very profitable business that continues to serve as a primary audio subscription service for certain audience segments while being complementary to interactive services for others. Our new platform will streamline purchasing and usage in and out of the car and enhance the value of SiriusXM, making our service worth the premium for a wider range of audience segments. We are ramping up our marketing technology capabilities to better leverage our rich content to deliver more personalized messaging in our marketing efforts. Transitioning from a one-size-fits-all approach to a dynamic, multi-channel, individualized approach will promote only heard here moments and exclusive talent to drive subscriber conversions among their fans, no matter how or where they want to listen. As we approach the launch of our next generation SiriusXM experience, we are confident that the upgrades will boost engagement and customer satisfaction for in-car and streaming-only customers alike. This will have positive implications to ARPU, conversion, retention, and subscriber growth in 2024 and beyond. The first months of 2023 have already brought several exciting product iterations and consumer offers, providing valuable insights for the full platform relaunch later this year. For example, we introduced a new in-app onboarding experience for users to select genres, allowing faster, more efficient access to the most relevant content. This feature drives listener engagement that leads to higher retention. We're increasingly flexible and even agnostic in how we add subscribers and accommodate listening preferences. This past quarter, we introduced a first of its kind six-month trial offer for Walmart+ members, giving them the choice of in-car or streaming-only packages. Additionally, we debuted our first-ever integrated billing with T-Mobile, expanding upon our existing six-month SiriusXM streaming offer and adding a Pandora Premium four-month trial offer, making it even easier for trialers to transition into paying subscribers. These collaborations demonstrate our strategy of inviting people to experience SiriusXM in the way that suits them best. We are making significant progress in rolling out our 360L platform and expect to exit 2023 with nearly 40% of new car trials, including 360L. Over the next few years, 360L will continue to expand across OEMs, including on select Mercedes-Benz models, as part of an agreement that will increase the installation of SiriusXM to make it a standard feature on all Mercedes-Benz models available in the United States. We will also begin to see 360L-capable vehicles in our used car trial starts as well. We are very encouraged by the conversion lift we see in vehicles with 360L today, and we are just getting started. We see significant in-car conversion improvements when trialers engage with features that enable more control and discovery, including our more targeted extra channels, Pandora artist stations, and enhanced recommendations. While this is a great indicator of what's to come, these features are currently only available in a limited number of 360L-enabled vehicles, and awareness of these features is still low. We expect to see more rapid feature adoption tied to automakers' incorporation of the Android Automotive OS with our 360L platform beginning later this year. AAOS will roll out in small volumes initially, but should grow materially to become the dominant OEM operating system, improving 360L adoption and feature parity along the way. Turning to our content, given the strong engagement we continue to see with our extra channels in and out of the car, in the first quarter, we expanded our focus here and launched several new hip-hop and R&B channels. We have seen the percentage of listeners consuming these genres more than double versus a year ago, driven by younger audiences who value the more controlled listening experience. Against the splintering of sports rights in the video space, we offer incredible value as the one-stop audio home for all major sports, and it's powering record engagement of this content. We extended agreements with the NHL and NASCAR, ensuring continued access for our subscribers for years to come. SiriusXM's Super Bowl broadcast this year was the most listened to in our history, and strong engagement continued during March Madness, particularly with NCAA Women's Basketball. We increased the number of women's games we deliver to our subscribers to almost 800 broadcasts, doubling from the previous season. As we develop our new SiriusXM platform, we are rethinking how we surface and deliver talk content and see opportunities to better combine live shows with on-demand podcasts to serve the diverse preferences of listeners. With strong similarities between talk radio and podcasts, we can do more to seamlessly integrate them across our service and provide more control and discoverability for our subscribers. This past quarter, we combined SiriusXM's podcast group and comedy and entertainment group into one unit. Our extensive portfolio includes chart-topping podcasts by Earwolf and Team Coco and exclusive channels featuring A-list talent like Andy Cohen, Tank, and Conan O'Brien. Our varied distribution models, subscription and ad-supported, reach audiences wherever and however they want to listen and bring value to the SiriusXM subscription, as exemplified by recent deals with Kevin Hart, Kelly Ripa, and Tom Brady. Listeners can hear Kevin's show, Gold Mines, on all major podcast platforms, with extended episodes available early to subscribers on his Laugh Out Loud Radio channel only on SiriusXM. Kelly's new hit, Let's Talk Off Camera, is first released widely as a podcast, but also airs on Radio Andy. Returning this fall, Let's Go!, hosted by Tom Brady, Larry Fitzgerald, and Jim Gray, will be available first to our subscribers, then on demand exclusively in our app. All of this is a testament to our leading position in talk audio, and we will continue to leverage our world-class content to draw in new SiriusXM subscribers while also giving ad-supported listeners access to our high-quality programming. Our advertising business, operated under the unified SXM Media banner, delivered solid first quarter results, bolstered by growth in podcasts and programmatic sales. At the intersection of the two, our programmatic podcast sales doubled year-over-year, albeit off a small base, and contributed to overall podcast ad revenue growth of 34%. Our ad technology business continues to be extremely profitable, growing about 20% year-over-year and partially offsetting broader headwinds during the first quarter. We help resolve pain points facing marketers by using greater automation and making buying more efficient. Alongside our ad tech success, this quarter, we renewed U.S. and international sales agreements with SoundCloud and our advertising relationship with the OWN Podcast Network. We also launched Fluency, a cultural practice helping brands connect with young, diverse audiences in audio by providing insights to support campaigns and creative strategies. Our ad-supported portfolio from Pandora to the SiriusXM Podcast Network, which also includes two of the largest Hispanic podcast networks with Pitaya and reVolver, offers opportunities for advertisers to reach large and diverse audiences in audio. In short, I am pleased with our financial performance this quarter. I'm confident in our opportunity to expand our subscriber base as auto sales recover and we launch the next generation SiriusXM experience later this year. This new experience will emphasize simplicity and elegance, provide more control and discoverability, and drive greater consistency between in-car and streaming experiences, better catering to our subscribers as they increasingly listen across devices. I will now turn the call over to Sean for some brief remarks. Then Tom will go through the financials in more detail. Thank you, Jennifer, and please let me add my welcome to Tom Barry, who may be new to this call but is a veteran of SiriusXM and its finance organization since 2009. It has been a real pleasure to serve this company, its talented employees, and our shareholders as CFO these past two and a half years. In this past month, we have all worked together to ensure a smooth transition. I am confident that Tom's perspective, diligence, financial expertise, and history with SiriusXM will serve him well as he steps into the CFO role. Tom, take it away. Thank you, Sean. Thank you, Jennifer. Good morning, everyone. I'm truly excited about this opportunity and to join the conversation with investors and analysts and meet many of you in the coming weeks. I look forward to leveraging my experience of leading the SiriusXM controllers team to more broadly work with operations and the leadership team who shape the company's long-term direction. I think you'll see continuity as I lead our talented finance team and continued our disciplined approach to financial decision-making. With that, let's jump right into it. As Jennifer noted, the first quarter played out as we expected, albeit with a bit stronger finish to our advertising revenue performance and gradually improving trial starts. With these trends and more targeted cost control initiatives, we're now able to increase our full-year guidance for adjusted EBITDA from $2.7 billion to approximately $2.75 billion, and our free cash flow expectations from $1.05 billion to approximately $1.1 billion. In this quarter, we recorded $2.14 billion of revenue, a modest 2% decline compared to the prior year period. The SiriusXM segment delivered $1.7 billion in revenue, which was down 2% principally due to lower OEM paid promotional trial revenue, reflected in our ARPU of $15.29, and declining subscriber revenue at connected vehicle, partially offset by a weighted average subscriber base that was up 1% year-over-year. Self-pay net adds declined by 347,000 a quarter, consistent with our expectations given lower fourth quarter vehicle and streaming trial starts, combined with seasonally higher churn in the first quarter. We do expect to see future quarter-over-quarter progress in self-pay net adds, but we still anticipate being modestly negative for the full year in aggregate. Our total new and used car penetration rate was 80% and 55%, respectively, and our enabled fleet stands at about 154 million vehicles. In the Pandora and Off-platform segment, total revenue is $462 million, nearly flat with prior year. Advertising revenue of $334 million decreased slightly by 1% in the first quarter. We continue to be cautious about the overall ad sales market, we still see tailwinds in podcasting. Pandora's ad hours were 2.59 billion, declining just 4% year-over-year, as hours per active users climbed 4.5% to 21 hours per month. Gross profit in the SiriusXM segment declined 5% to $1.02 billion, representing a margin of 61%, down slightly from 2022 due to higher royalties. The change in royalties was driven by the expiration of the discounted rates on pre-1972 music as of the end of 2022 and a CRB-announced 9% CPI inflator on webcasting performance rights. Programming and content expenses climbed 6% due to increased licensing fee and production costs. Gross profit in the Pandora and Off-Platform segment was $111 million, down 19% and representing a margin of 24%. Here you're seeing the normal effects of seasonally light ad revenue in the first quarter, combined with recent ad headwinds, plus the CPI inflator to web streaming royalties. We expect this margin to trend favorably for the remainder of the year. At the corporate level, G&A was up 21%, with the majority of the increase driven by litigation expenses and investment asset adjustments on our employee deferred comp plan. Sales and marketing expenses are lower by 17%, as discussed, while engineering, design, and development expenses were up 15% on the back of new product investments. Putting all this together, adjusted EBITDA of $625 million was down 9% over the prior year. We are already beginning to see benefits from cost reductions implemented in Q1 across every element of our business. Seasonality in advertising revenue and these strategic cost-saving measures should deliver ramping EBITDA in the second, third, and fourth quarter. During the first quarter, we generated $144 million of free cash flow, down from $258 million the prior year. This decline of $114 million is principally the result of increased satellite CapEx of $103 million as we invest in the construction of SXM-11 and -12 and a one-time severance payment of approximately $15 million related to our cost optimization strategy. As we previously discussed, CapEx should increase by some $200 million for the full year 2023 as we ramp SXM-11 and -12 on top of ongoing preparation for SXM-9 and -10. This satellite CapEx spending will be in the $300 million range per year in 2023 and 2024, before declining to approximately $175 million in 2025, approximately $80 million in 2026, and approximately $20 million in 2027. While the exact timing of construction milestone payments can inevitably shift, this gives us a general idea of the trajectory and the scope of spending. The investments we are making now will support our remaining valuable low-band customers for several years to come, but we'll eventually provide new revenue opportunities. Following this build cycle, we do not anticipate any spending on satellites for many years. Because of this typical seasonality of our business in terms of receipts versus expenditures, combined with the timing of our capital expenditures, we expect to produce a meaningful portion of 2023's free cash flow later in the year. Looking at the capital allocation for first quarter of 2023, we returned $160 million to the shareholders, comprised of $94 million of dividends and $67 million of stock repurchase as we reentered the market following our fourth quarter results. We ended the quarter with a leverage at 3.4 times, which is within our targeted range of low to mid threes. Moving forward, we value a strong balance sheet that provides us with flexibility to navigate a variety of future environments. Our goal, of course, is to continue a disciplined and thoughtful approach to capital return. Despite market and business challenges, I'm proud of our good start to the year. Our team is working diligently to position us for success in the second half of 2023 and beyond, I'm excited to see how this year shapes up. In closing, I would also like to thank Sean for making this transition as seamless as possible. With that, I'll turn it over to the operator for Q&A. Thank you. At this time, we'll be conducting a Q&A session. If you'd like to ask a question today, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Thank you. Our first question is from the line of James Ratcliffe with Evercore ISI. Please proceed with your questions. Hi. Good morning. First of all, Sean, thanks very much. Pleasure working with you, and good luck on the next gig. Keep them in the fairway. And on that note, Tom, if you could just give us an idea, you know, your key priorities coming into the role, sort of what's at the top of the bullet point list on the whiteboard in your office. Secondly, regarding the satellite radio side, you know, GM has announced that they're planning on dropping Apple CarPlay. What are you guys seeing among OEMs in terms of their positioning around third-party interfaces on the dash versus their own, and how does that affect the placement and role of the SiriusXM product? Thanks. Okay, James, I'll go first. Good morning. Just to talk about my whiteboard, what I'm focused on in the early days is, you know, a lot of what you'll see in raising our guidance in some of the other areas is we're investing a lot of time in our cost structure and ensuring that our spending and our cost optimization is headed the right direction in an effective manner. We're investing in our future. We're investing in the new platforms. We're investing in satellites. Obviously, we'll continue to carry forward with our capital return plan to shareholders. My overall view is to work on obviously optimizing the business, support the growth of business and position us for the year ahead. Great. James, to your second question, so we'll see how this, how, you know, the OEMs navigate kind of the integration of CarPlay and Android Auto. You know, I think, you know, GM seems to be somewhat unique in that in that path. You know, we are well-positioned to make sure that our incorporation sustains through whatever model the OEMs choose to pursue. Right now, we're certainly seeing significant take-up in Android Automotive OS, the integrated software from Google, and we're working closely with the OEMs and with Google as that rolls out. The majority of OEMs have either announced or are in process of moving toward that operating system, and I think we're very well-positioned to deliver our service through AAOS. It allows us, like many other services, to update much more frequently our feature set. We also have a unique setup because we will continue to maintain preferential treatment in terms of display. Whereas other services, you need to sign up for a data plan, you know, we cover the data costs ourselves. We believe no matter what path the OEM chooses, we'll be really well-positioned there. Thank you. Our next question's coming from the line of Ben Swinburne with Morgan Stanley. Please proceed with your questions. Hey. Good morning. Welcome, Tom. Jennifer, could you talk a little bit about the subscriber outlook for the rest of the year? In particular, you know, what are the things that are gonna allow for the streaming-only subscriber losses to sort of moderate? Could you give us a little bit of color on sort of the puts and takes there and how the new next generation SiriusXM experience will help improve that over the course of 2023? Then maybe the same question sort of on the in-car business. I think trial starts are starting to improve. You know, usually, you guys have pretty good line of sight on that. Help us think about bridging the Q1 losses towards, you know, better numbers in the back half between those two subscriber bases, if you would. Sure. Thank you, Ben. The number in Q1 was anticipated, right? We expected Q1 to be a low point in terms of net adds. You know, as Tom referenced earlier, we also expect each quarter going forward to be better than the prior quarter. You know, the trends that we saw in Q1, in large part are reversing as we go through the year. Q1 was impacted, as we said, by lower fourth quarter trials and then third quarter. Q1 trials have been stronger. We're stronger than Q4, so that sets us up well for the in-car funnel. We do expect auto sales to continue to grow. I just saw a stat the other day that, you know, we watch quite frequently about intent to buy, and it's at one of the highest levels we've seen over the last couple of years. I think there is a case to be made for, you know, demand to start coming back, maybe some of the pent-up demand to be released and auto sales to slowly but incrementally improve over the course of the year. Of course, that helps with the funnel there. On the churn side, in-car Q1 is always seasonally soft for us. You know, we anticipate that to be true for this year as well. While we're still very strongly positioned, with churn at just over 1.6%. You know, CSAT is at an all-time, our customer satisfaction is an all-time high since 2009. You know, it's driven a lot by the programming additions that we've made and the streaming access. Then on to your question on streaming net adds, you know, so to some extent, we've gotten through the turtle of the reduced marketing spend we had in the fourth quarter, and now we're operating at a much more efficient level. The cost to acquire trials has gone down. Some of that's market conditions and some of that is more efficiently buying in specific channels. We will continue to be active in generating trials. We are actually holding back largely until the launch of the new platform, which is in the fourth quarter. I wouldn't expect to see major changes in our streaming net adds until after that. They will improve over the course of the year, as will overall total net adds, but we're still waiting to launch a lot of these underlying capabilities and functionality to be able to support the streaming business, not only for streaming-only subscribers, but also as it continues to support our in-car business through, you know, customers listening outside of the car and 360L in the car. That's very helpful. Thank you. Sean, best of luck in your new opportunity. Thanks, Ben. Our next question is coming to the line of Barton Crockett with Rosenblatt Securities. Please proceed with your questions. Thank you for taking the question. I guess what I wanted to ask you about is just to follow -up on the subscriber progression here. I think you were saying on the last quarter call that while you weren't formally guiding for a number for subs for this year, generally the expectation was modestly negative. You know, here you've come in and you've updated financial guidance. I was just wondering if you could give us an update on that subscriber kind of loose commentary. Is that still what you see or is there anything different that you can talk to at this point? Yes, Barton, we haven't changed the guidance on subscribers, so still expecting modestly negative for the year. Clearly with negative 347 this quarter, we are expecting, as you said, improvements quarter-over-quarter. I would expect the second half to be positive and that sort of nets us out to the modestly negative. We're really focused, again, heads down on investing in this new platform and making sure that that positions us for growth going forward. But we are continuing to see progress in advance of that on 360L. I highlighted some of these metrics earlier, but we are seeing definitive increases in conversion rates for trialers, particularly younger trialers who are, you know, using the features, but also just have 360L capable vehicles. That is because we're addressing these pain points. I believe that is a very strong proof point for what we can continue to drive and see when we launch this new platform that is going to support 360L, but also drive cross listening in and out of the car and provide much more personalized listening experiences. Okay. You know, and to the point on 360L, you know, can you give us a sense of right now how material 360L is for your subscriber acquisitions? I mean, what portion are coming in on that platform and, you know, and how is that progressing over the course of this year in your view? Yeah. The what's key is the rollout. You know, this has been a long time coming, and the promise of 360L is now delivering. We're in about, I think it's about a third of our new car trial starts have 360L currently. That'll increase to about 40% by the end of the year. We'll start seeing it actually come through used car trial starts as well as some of those early cars turn over. Then over time, in the years to come, it'll get to, you know, 80% of our trial starts. It's rolling out. We announced this morning that, you know, Mercedes has a plan to roll out. And we are very eager to see it continue to move through our OEM partners. You know, it's key to not only lift in conversion, but also improved retention, and I think ultimately ARPU as well, because we can deliver even more, you know, content and features to our subscribers. Okay, that's great. Thank you. Thank you. Our next question is from the line of Steven Cahall with Wells Fargo. Please proceed with your question. Thank you. Jennifer, maybe just to follow up on that line of discussion. I was wondering if you talk a little bit to conversion rates. Your commentary on the intent to buy and the improving funnel sounds constructive. I know pen rates are higher now. Competition's maybe a bit higher now. 360L mix is also sounds like tracking up nicely. How do you think about conversion rates on new car trials today versus where you were historically, I think in that sort of mid-30s range. And then relatedly, I was just wondering if you could speak to what's going on in the used car market. Any commentary on how those are contributing to either the modest decline or the growing funnel and what we should expect for used car activity this year? Thank you. Sure. Thanks, Stephen. On the used car market, just to start with that, the used car sales were actually pretty strong in the first couple of months of the year. In March, we started to see that tail off a little bit. As you know, it is a big part of our funnel. We have seen, you know, used car trial starts did increase in Q1 versus Q4, which sets us up well. You know, the dynamics are tough in the market because, you know, many buyers, as new car prices start to come down, may migrate from used cars to new cars. Inventories are still pretty tight on the used car side. We're not seeing any major changes in the market that I would highlight. On conversion rates, I talked a bit about this on the last call, but just to add some more color. Conversion rates are continuing to trend in the low 30s and for new car, in the low 20s for used. The downward pressure we've seen over the last few years had a lot to do with the dramatic increase we saw in pen rates over that time period. We're up about 9 points from 2019 - 2022. We've settled in at this sort of range in the low 80s that I think is the optimal place for us going forward. That pressure will abate to some extent. Over the last few years, especially during COVID, there was a massive acceleration in the percentage of millennials buying cars. While that growth will continue, it's actually come down to more normalized level at this point. The competitive challenges we have are easily solved with 360L and the new platform that we're launching, and we are starting to see that already in some of our numbers. Younger generations in particular are looking for more opportunities to control the listening experience. They're looking for more opportunities to more easily navigate the service. 360L brings a lot of those features to life. We are seeing even better conversion rates among younger trialers who have 360L relative to older generations, and particularly our core audiences who know our service and are used to navigating it. Great. Thank you. Our next question is from the line of David Joyce with Seaport. Please proceed with your questions. Thank you. First, Sean, good luck. You'll be missed. I'm glad you extended your tenure in the media industry here. To Tom, congratulations. Look forward to working with you. Question on, you know, the new trends. Given the new Mercedes-Benz deal and some recent price increases, what are the impacts on ARPU in the near term? Like, how should we think about the cadence of ARPU from here this year? What would the longer term impacts be from any of the newer auto deals, you know, since we saw some of the promo numbers increase here? Thanks. Sure. Thanks, David. The OEM paid promotional revenue has been trending down over the last few years, it's really just one piece of the puzzle as we look at our economics with our OEM partners. Some OEMs will choose, you know, to pay for the trial and receive a higher subsidy. Obviously there's the impact of revenue share as well. We're constantly navigating the interaction of those three economic levers with, you know, increasing penetration rates where it makes sense. I think the impact of OEM prepaid revenue should slow down in terms of how it's flowing through ARPU over time. On the self-pay side, you know, I would continue to expect improvements in year-over-year comps as we roll out the rate increase. It'll be less impactful than the last time we did the rate increase because we've focused primarily on full price plans. That has a lot to do with, you know, maintaining our promotional plans and market our discounted plans to be able to better onboard and retain our subscriber base where it makes sense. Positioning for the future, we have had a long history since we launched of, you know, annual average increases in ARPU of about 3%. That may be at the top end of the range. I still think there's opportunity. I just don't wanna focus on ARPU solely because I do think there's demand at lower price points. We are looking at more flexible pricing structures that we will likely implement when we launch the new platform. Okay, great. Thank you. Our next question is coming from the line of Stephen Laszczyk with Goldman Sachs. Please proceed with your questions. Hey, great. Good morning. Maybe for Jennifer on distribution. You called out the partnership with Walmart+, announced in the quarter. I was hoping you could maybe talk a little bit more about the third-party distribution strategy, how sizable of a trial acquisition funnel you think that could become over the next few years, and maybe how you see that fitting into the broader digital strategy later this year. Sure. Stephen Laszczyk, the Walmart and T-Mobile have been great partners and I'm very pleased that we've been able to launch with them and test out different trial offers. In particular with Walmart, we're testing an offer that allows consumers to choose do they want a satellite trial or an in-car trial or a streaming trial. We're just in the phase of really testing and learning on these roll-outs, and we'll be much better positioned when we build out some of the capabilities in the new platform in terms of easier sales flows, better onboarding, more personalized recommendations to take advantage of these partnerships going forward. The majority of our trial funnel, as you would expect, is represented by the millions of trial starts that we do every year through our automotive partners. The streaming trial funnel, our challenge has not been trial generation, and we've put very distinct guardrails in place in how we're active in performance media in bringing trials into the funnel. Partnerships is sort of an untapped opportunity, and I believe as we launch this platform, we will have more and more opportunities to better execute on that. Great. Thanks for that color. Maybe just one for Tom, just since it's your first call as CFO. A follow-up to James' question. It'd be great to maybe hear how you're thinking more broadly about leverage and capital allocation. What do you see as the right leverage profile, the right mix of capital returns? Anything different here, going forward, that we should be mindful of, you know, relative to how we, you know, thought about it in the past? Great. Thanks, Stephen. You know, we look at this, probably more often than not, but we spend a lot of time looking at this. We'll continue our current process of being cautious and disciplined. Obviously, as we said to you at the year-end call, that a lot of our free cash flow and a lot of our numbers will be coming in the second half of the year. We're gonna continue with our disciplined approach as we've used over the last couple of years. We'll target leverage in the low to mid threes in light of the macroeconomic factors. You know, as we noted, our Q1 was at 3.4 times. We returned $161 million to shareholders in the first quarter. We'll continue to be opportunistic for the remainder of the year. Great. Thank you. Thank you. Thank you. Our final question is from the line of Matthew Harrigan with Benchmark Company. Please proceed with your question. Thank you. Firstly, could you talk a little bit more about what's maybe a little bit better than expected audio number? I mean, the economy, we just had a soft GDP number a couple minutes ago. Are you seeing any flux in terms of the categories that are participating or just kind of tailwinds for audio advertising even irrespective of the economy? Secondly, it's a bit of a more of a press question than an analyst question. It probably definitely falls into the diverse preferences of listeners buckets, but you just have two rather polarizing TV news personalities becoming available, albeit with some bad actor issues with Tucker Carlson and Don Lemon. You know, you've certainly been very tolerant of views on all sides of the spectrum. Are there any circumstances where, you know, if I was Tucker or Don Lemon, I'd certainly wanna be with you on the linear and podcasting side rather than Newsmax or OAN. Is that just two friends for you? I again, I kind of apologize for the question, but I'd love. I can't resist. Thanks. Thanks, Matt. I will start on advertising and hand it over to Scott on your second question. Our Q1 results were better than we expected, certainly based on where trends were heading in December or January. We had a really solid quarter with ad revenue down just 2%. I believe that's because we were really well positioned to capture late in quarter demand that came in as advertisers started to open up their budgets because we have these programmatic solutions across music streaming and podcasting. Podcasting continues to be a bright spot. Podcasting ad revenue was up 34% year-over-year in the quarter, and, you know, that's due to the great content relationships we have on the representation side, our ability to bring brands into podcasting. It's traditionally been much more D2C, and D2C has been soft in the first quarter. You know, we just have these solutions in market for advertisers to come in and either buy across our network on an audience basis or by show level, and even custom integrations. We're really well positioned on the podcasting side. Certainly there's still uncertainty in the second half, I think, but we are hopeful that the market will continue to recover. The great thing about our guidance is that given the cost reductions we've put in place, we're really well positioned, even if the market trends a little softer going forward. Just on the categories, it's been, you know, continued improvement in travel, restaurants, casino, even automotive is coming back more, which makes sense. Softness in telecom and some financial services. Scott. Great. Thanks, Matt. You know, one of the things we're most proud of is what you alluded to, the true diversity of voices we have on the platform, and basically letting our subscribers and listeners and trialers decide what they wanna listen to at any given moment. While we may, in fact, be a potential or logical home for anybody, you know, that fits into those voices, one, we don't comment on anything, you know, we're looking at directly. Secondly, we look at the totality of the package between the talent, you know, the issues that allow them to be free to negotiate and other things. It's like anything else. People find our way to our door, and we consider a lot of factors before we make any decisions. Thanks for your answers. Thanks, Matt. Thanks, everybody, for participating today. Thanks, Operator Rob. Talk to you later. Bye-bye. Thank you. This will conclude today's conference. You may disconnect your lines at this time. 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