Good morning, everyone. I am Sebastiano Petti. I cover the cable, telecom, and satellite space at JPMorgan. I want to introduce Jennifer Witz, CEO of Sirius XM, since January of 2021. Jennifer, thanks for joining us today. Thank you for having me, Sebastiano. Nice to be here. It's been a little over five months since you pivoted the business towards super serving your core in-car audience. You talked about seeing some early benefits of this strategic shift on the Q1 call. What gives you confidence that this is the right long-term growth strategy for SiriusXM? It's a good place to start. We entered this year with a very clear focus on what we do best, which is super serving our core audience segments with our unmatched distribution in the car and our very unique content offering focused on live, exclusive, and human-curated content that we are seeing real proof points. I am confident we're on the right path. There's a number of examples of this. Our first quarter churn was incredibly low, down 18 basis points year over year. That is despite a rate increase that we rolled through on much of our full-price packages and just the general uncertainty in the macro environment. We're also continuing to see meaningful contribution to our metrics from our 360L rollouts. The advanced personalization that we have in 360L is driving better engagement. We continue to roll out across OEMs with that new interface. We have had a number of other programs focused on the car, where we do best. Filling in the data gaps for the used car distribution, making sure that we can target customers that are buying their new used car at the point of sale, our three-year OEM subscriptions, as well as our rollouts in Tesla and Rivian. A number of areas where on the product and distribution side, we have made strides focused on our core automotive business. Outside of that, we'll talk more, I think, about pricing and packaging and the flexible packaging structure we're putting into market and how I believe that's going to continue to support our ability to drive improvements in demand and retention across our customer base, opening us up for more opportunities within price-sensitive customer segments that are focused on an automotive experience. All of these are, I think, great examples of how leaning into our in-car business will drive future opportunities for us to stabilize and hopefully grow our revenue and deliver long-term value. Great. On the tariff front, on the call, Tom noted that he not only continues to sleep well at night, which is good, but he also does. Good quote, right? Yes, yes. 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. As we look out, just last week, Manheim used car index rose to the highest level since October of 2023. SAAR, while down a little bit month over month in April, still remains at elevated levels. Any update in terms of those versus those expectations for the years on the tariff side? I think we largely feel the same as we did when we talked about it on the call. We continue to monitor the auto landscape closely, as you might expect. No direct impacts that our cost structure, we don't believe, will be impacted generally at all. Any sort of increased costs through the supply chain seem to be, if they are happening, seem to be mitigated in some way. Clearly on the subscriber side, as Tom said, no material impact on subscriber or financial metrics certainly this year. I do feel good about March and April SAAR. A lot of that is probably pull forward of demand. We may see some reductions in the coming months as people are probably close to those purchase decisions. April sales, just if you look at USLV, were up 11%. Even though down a little bit from March, still very robust. I think one of the things that gives us a very solid feeling in sort of an insurance policy is just the used car penetration that has grown over time. Again, our ability to kind of fill in the data gaps for where we do not have dealer programs or there are private sales has really helped us find those new owners of those used cars and offer them trials. Again, I feel really good about our differentiated trial funnel, the progress we have made there. Then just overall, our strong customer metrics and subscriber metrics. Generally, in the face of macroeconomic pressures, we are really not seeing anything that would give me concern at this point. Great. OK. Now, thinking about churn and engagement, some of the stuff you kind of talked about was encouraging on the call. You highlighted that SiriusXM saw the highest quarterly customer satisfaction ever, which was a driver of the strong churn performance that you just did touch on with churn down across all three categories, which I think is notable. 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. Content, pricing, and packaging. What's the silver bullet? It's really all three of those. I think that's going to structurally support our business going forward as well. Improvements we've made in the product, both in-car through 360L and out of the car through the streaming app, just again, providing more discovery opportunities, more control features. We've seen a lot more engagement across a broader set of content as a result. Improvements in our content lineup. We're constantly adding more to our content portfolio. In the fall of last year, ahead of the rate increase, we actually made much of our sort of exclusive talk and sports content more widely available across some of those packages ahead of the rate increase, which I think was part of the reason that we were more successful in terms of rolling out that rate increase. It's a model for us going forward as well. Our broader pricing and packaging structure, I think, is going to give us a lot more flexibility and improve engagement over time as well. It really comes back to the content. I think the differentiated content that we have, if we look at the satisfaction results from the survey, it really is across the board. Customers continue to cite that we have music channels and content that they can't find anywhere else. It is how we package and offer that content through human curation that's really important to our subscribers. We'll continue to invest in that. The breadth of what we have outside of music is really core to retention as well. Customers take advantage of, say, the Catholic channel when we're selecting the new pope. We've really seen an increase generally on news and political channels as customers are sort of experiencing the news cycle that we've all seen over the last several months. What's really critical to the value proposition is the broad variety of content we have and that human curation across the board. That's what's really driven overall satisfaction to highest levels that we've seen. It seems as though you expect these churn tailwinds to continue, particularly as you move away from the churn from the rate event. Yeah, I think the first quarter was a nice surprise, I think, in terms of what we saw. We do have some impacts coming throughout the year that could change that trajectory a little bit. That's incorporated in our general guidance for subscribers this year, where we do think there will be a couple hundred thousand of impact from some of these more one-time items. So click to cancel, I think we'll talk more about that, our reduction in streaming acquisition marketing, and the pull forward that we're seeing by using shorter post-trial promotions. A couple of those could have an impact on our churn rates later this year. Fundamentally, I feel really good about the changes we've made, again, product, pricing, and packaging, and content to support ongoing future low churn rates. Got it. The improved engagement, I would imagine that's coming from your established core base more so than the modular tiers, as that's just kind of rolled out, right? It's just. Yeah, we just started rolling those modular packages out. Starting with the $9.99 in-car music-only package and $5 add-ons on top of that, that started rolling out late last year. We're just seeing some of those customers roll on to post-trial, post-promotion onto those full-price packages. The engagement was really across the broader base of subscribers, and particularly with those full-price subscribers, where we did make more content accessible across those packages. We saw customers take advantage of that pretty quickly. Got it. With the new modular tiers and SiriusXM efforts to broaden the TAM, 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 $9.99 plan will, in fact, broaden your TAM? The main concern we hear from investors is perhaps the "unintended consequences," perhaps of down tiering within the base. How do you manage that? Yeah, I can come back to sort of the down tiering or cannibalization that I know investors and analysts seem to be concerned about. Overall, this is about fundamentally changing our pricing and packaging structure to create a much more logical sort of good, better, best structure to our pricing. As you know, we have a lot of premium packages at the $25 and up range. We have a lot of very loyal customers paying those rates. We just really do not see customers downgrading from those tiers as they want to take advantage of the full set of content. There is that idea that I might want to listen to the NFL game, or I might want to tune into the Catholic channel, or whatever it is. They want the full set of content. We'll then have a series of packages between $10 and $20 that have reduced content, music only at $9.99. You can stack on top of that news, talk, sports for $5 each. That's the modular packaging you're talking about. Below that, we expect to have this low-cost with ads subscription tier launching later this year at a price point that's somewhere between $5 and $10. Again, has some reduced content, but also more ads, especially across the music channels. We'll have more opportunity to increase ad load over time. This is key to really opening up demand for more price-sensitive customers. If you look at listening in the car for audio, 80% of consumption for 35-year-olds and up is to AM/FM or SiriusXM. It's a radio-based experience. This is 35 and up. We have a lot of opportunity with packages sub-$10 to go after those listening to AM/FM who might not have considered Sirius XM in the past. It is about opening up demand within our trial funnels. On the cannibalization front, I think we're going to be very prescriptive about and targeted about how we use these lower-priced packages. We have a lot more capabilities in marketing to be able to do that. We can better target through the funnel. We know in a much broader way what customers are listening to and what they're not listening to. We have conversational AI that has been really incredibly powerful in terms of the customer interaction points and being able to get customers into the right packages. I'm not concerned about cannibalization. Of course, we have to continue to share metrics to prove it to all of you as we roll these packages out. Any learnings from the rollout of the modular tier? Yeah, so we did a lot of testing on it last year before we rolled it out. Our experience so far, again, it's only with new customers coming through the trial funnel. Existing customers is another area where we won't expect to see cannibalization because we're targeting these new customers who haven't chosen to take in SiriusXM in a trial before. What we're seeing is that they're choosing the highest priced packages in most cases. There's $10, $15, $20, and $25. Most customers are actually choosing $25 during that initial, they take a promotion, and then they roll to that full-priced package. Once they roll to the packages, they tend to stay at a much higher rate. Retention is much better. This is all about longer-term improving the overall health of the subscription business, trying to get ourselves off of some of these persistent customers that sort of persistently call to get a lower-priced discounted package for the full set of content, getting them into the package that's right for them very early on in the trial. It's going to take time. Ultimately, this is a much better way to support future revenue growth. OK. Lastly, as we kind of wrap up on the broadening of the TAM, 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. Maybe what are the key areas of differentiation we should be thinking about? Yeah, I mean, we've always been complementary. Other than maybe our older customers who haven't taken a music streaming service and are still listening to their music collections in other ways, the vast majority of our subscribers already listen to other DSPs, and probably more than one, and primarily outside of the car. You see that in that 80% statistic. Our core audience segments are 35 and up or 45 and up. Those customers are listening to AM/FM and Sirius XM in the car. It's just a fundamentally different experience when you come into the car. Most people want linear content, a lean-back experience. We make that very easy with the broad set of content we have available. We're clearly much more competitive against AM/FM. That's what we're going after. We're positioning ourselves as complementary to the DSPs. We think there's room for both among our customer sets. It's really, again, about opening up demand with these packages for more price-sensitive customers to experience SiriusXM. Got it. Management expects core in-car net adds to improve in 2025, excluding the one-timers you did talk about, a couple hundred thousand there. 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 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 you're talking about? Yeah, we haven't. We have started the rationalization of our streaming marketing spend. That's one of the biggest changes year over year. We'll continue to see impacts of that throughout the year. We had a very strong second half in terms of streaming adds to the overall business last year. The comparables year over year will get tougher as we go throughout this year, in part because of that, the streaming reduction, but also because click to cancel, which now isn't going into effect until July. We have this in place in several states today, including New York and California. We have some idea as to what the impact will be. Broader knowledge of the existence of it and the way we're rolling it out, it's going to take time to mitigate some of those impacts. Again, that'll go into place in the second half. That's when we'll see the impact of that. We're anticipating and have started to see some pull forward in churn related to the fact that we're using shorter-term promotions post-trial. Again, that's one time. We wouldn't see that in the year-over-year impacts as we go into 2026. It does mean all these things are sort of stacking in the second half. While I think the comparisons might be tougher in the quarters to the rest of this year, it's really going to set us up well for improvements in the comparisons on net adds as we go into 2026. OK. And you are confident that this couple hundred thousand losses is still perhaps right level? I am confident that's the right level. I still very much believe that absent those impacts, that we would be better year over year, particularly on the in-car side of our business. Got it. Obviously, notwithstanding what might occur in terms of, well, at this point, I guess the SAAR and auto sales are kind of almost fully baked, as we are sitting here in May, given your trial funnel. Yeah, I think we feel pretty good about if new car sales start to decline, typically what we see earlier on is fewer customers trading in those cars and so less vehicle-related churn. It actually might be slightly positive this year. Hopefully, we'll see some impact on used car. I mean, used car sales have been very strong. It's just a matter of inventory levels, I think, at this point. Great. With ARPU expectations, maybe help us think about how 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, though, efforts towards the rollout of the modular tier and improving the sell-in there of the add-on packages. You have easier comps in the second half as well. Maybe help us think about the trajectory there. Do you still expect to return to ARPU growth in the second half? Yeah, the first quarter was down about 3%, which was generally in line with our expectations. The rate increase went into effect in early March. We only saw a partial impact of that in the quarter. That will roll out over the course of the year. Most of our subscribers are on monthly plans. We still have subscribers that will experience that rate increase that are on longer-term plans over the course of the rest of the year. The comps versus last year will get better, particularly in the second half. Look, we do have an opportunity to open up demand at lower price points. We also have an opportunity for continual rate increases. Again, we've proven, I think, if we can add value appropriately for our customers, that we do have opportunities to increase prices on our full-priced packages. It's a balance of those things, that there's more opportunity at the top. Customers are increasingly choosing those $25 packages in our modular pricing and packaging rollout. We see real strength in the top end of that pricing and packaging strategy. Ultimately, I think we all agree that we'd probably even take a bit of a reduction in ARPU if we could really drive volume. It's about revenue maximization. I don't know that we're going to have to make that trade ultimately because we have room at the top. I think the opportunity for us is to open up more demand with these lower-priced packages, including low cost with ads. OK. So it seems as though the sell-in of add-ons is moving along nicely if you're. And effective. Given you're seeing higher demand at the top end of that. As you think about that and revenue maximization, is the biggest swing factor, is it more rate? How do we think about that on a rate versus volume perspective in terms of the trend at the top line in the subscription side, maybe in 2025 and in 2026? Is it getting the sell-in, the add-on tier? Is getting that right? Is that the key benefit? Or is it more volume-based? Or is just maybe the key priorities that you're talking about? Yeah, I guess it's probably three areas. It's continuing to set ourselves up for increases in rates on full-priced packages in future years and making sure that we're adding that value and upselling for customers. It's not been an active process for us. Again, with more marketing capabilities, I think we'll be able to improve our ability to upsell customers who are on these lower-priced packages into the full content tiers. It's managing that modular pricing, $9.99 music, and then the add-ons and continuing to get people into those higher-priced packages at the same time, making sure that we're maximizing demand for more price-sensitive customers at that $9.99 price point. It's rolling out low cost with ads, which of course will add ARPU on top of it, but at a sub-$10 price point, really having an attractive option in market for those price-sensitive customers that are really looking for an in-car solution. It's going to be a balance, again, of rate and volume. I think we'll have a lot more as we roll out low cost with ads later this year to say on how we're doing on targeting and bringing new subscribers into the base. Any details perhaps about the ad-supported subscription timing and rollout? We're going to start testing early in the second half. Again, it's about making sure that we have the right go-to-market strategy, the right price point, and that we are building out those capabilities in, I'd say, the third quarter, and then hopefully launching more broadly in the fourth quarter and starting to see sort of real traction in terms of how we gain momentum on subscribers, but also building more capabilities on the ad side alongside that. Everything we're doing to support the low cost with ad subscription will also benefit the broader advertising business on the Sirius XM side. There is opportunity to unlock that as we introduce more IP-targeted ads and better monetize our inventory in the car. We're really the only provider that can actually do that in the embedded in-car experience. There's more to come that'll start slowly towards the end of the year and ramp as we go into next year. Great. 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, offset by strength in pharma and telco. Any update on ad trends since the call in terms of what you're seeing out there? Not really much that's new. I think we're still seeing some mixed results in retail and I think CPG. On the auto side, there's been some areas of opportunity in the short term, I think, as automakers are taking advantage of the demand. There is real strength in telco and pharmaceuticals and even some in financial services as well. I think the trend line is probably going to be more similar in terms of bookings in this Q2 as it was for the first quarter, where there were a lot of late bookings. I'm really pleased with our programmatic offering because it does allow advertisers to kind of come into market late in the quarter and take advantage of our offerings, especially across streaming and podcasting. We continue to monitor it. Right now, still very consistent with what we said on the call. Awesome. OK. 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 podcasts, as well as your reach, this is an area of differentiation in the market for SiriusXM. I guess tell us more about why is SiriusXM well positioned to get benefit from this shift towards short-term performance marketing. Yeah, I think we have great solutions across the board for marketers as they look at their full funnel of marketing opportunities. It has a lot to do with the fact that we have a really broad offering across audio, that we have expansive reach across our platforms and on third-party platforms. We have incredible strength in our content offering. We have a number of solutions for advertisers, both on the performance side and in brand building. Audio has really been about brand building. Part of that is because there's not an opportunity to sort of click to take an action. Also, advertisers can reach customers in a much broader set of locations and situations with audio that can add value to their overall reach if they're buying in video and other platforms. It's where you do not have a screen in front of you where we can really add reach to their overall media buy. I feel really good about the opportunity to continue to serve advertisers on the brand side. From a performance standpoint, it's about building better capabilities and targeting and measurement. That's identity solutions, clean room activations, model integrations. We are doing all that to take advantage of those opportunities to serve marketers so that they can better prove ROI on their investments in audio when they expand reach. Ultimately, it's really about the content we have as well. Maybe we will talk a little bit about Creator Connect and the growth we have seen there, which has been really strong. Yeah, tell us a little bit more about the Creator Connect solution you guys are rolling. Yeah, so if you look at our podcast portfolio, we're really well positioned. Whether it's Ashley Flowers or Alex Cooper on Call Her Daddy, Mel Robbins, or the Smart List team, Conan O'Brien. Many of these creators are increasingly leveraging video. You see the explosive growth really in YouTube and video podcasting. I think you'll see that across other platforms as well. This is about us working closely with these creators to make sure that they're able to monetize wherever they are. It starts with audio. We're increasingly monetizing across video podcasts and then extending into their social channels as well. It's about advertisers being able to align with these creators and the talent and broaden their campaigns across all these channels. We think it's a great way also to capture video budgets and social budgets and extend beyond the audio market. Great. I think as we wrap up here, thinking about just the 2025 target program of $200 million of run rate savings by year-end, big focus for the team. You achieved $30 million of those savings in the first quarter. 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. Maybe help us think about the main factors driving that. What are the levers to return the business back to margin expansion? Yeah, I think we'll see a good trend line on EBITDA margin over the course of this year. I mean, remember, we have incredibly healthy variable margins on our subscription revenue. As we've seen some declines in the last couple of years on subscription revenue, that's fallen through and pressured EBITDA. We've had a very active program in managing costs, as you know. There are certainly more opportunities there. As we look at this year, those revolve around things like removing duplicative systems. We've been going through a platform migration at Sirius XM. Reducing software licenses, development resources, the support for those software licenses as well. Then better optimizing and being more efficient in targeting with our marketing. Conversational AI and generative AI that we're using and leveraging very significantly across customer interactions on the Sirius XM side and to build out better self-serve solution in the advertising side as well. A number of cost opportunities, both on the operating expense side and CapEx, that I think will continue to support the business in terms of reducing the cost structure going forward. Ultimately, it's really about getting subscription revenue back to stabilization and growth going forward because of the strong margins we have there. Got it. I think I asked this on the call as well. 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. Guidance, some would argue, appears somewhat conservative given your cost momentum and the better subs in the first quarter. Obviously, back half of the year, some impacts on the subscriber side. Help us think about why the conservatism from the team. Could we see upside to guidance if visibility were to improve on the advertising side? Yeah, I think, look, the advertising market is definitely a little choppy. We are just being cautious. I mean, we set our guidance late last year before some of this macro uncertainty sort of came to light. I think we just want to be really cautious about providing any updates. We feel very confident about our guidance on revenue, EBITDA, and free cash flow and the general parameters we have given around subs. It is just too early, I think, to change anything. We have, I think, a very robust cost reduction program in place. To the extent ads do not materialize in the way that we would expect, we need a little bit of cushion there on overall EBITDA. Again, feel really good about where we are today and confident in our overall guidance. OK. 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-three times range. We've forecast net leverage of 3.3 exiting 2026, which definitionally gets you to the low to midpoint of the range. Just help us think about how you're balancing the deleveraging opportunities versus opportunistic share repurchases given valuation. Yeah, we've had just a modest share repurchase program in place to take advantage of any real disruptions. With that in place, I still believe that we'll get to kind of just above the top end of that range by the end of this year, which, again, our target leverage ratio being low to mid-three times net debt to EBITDA. Look, going forward, as we get into 2026 and 2027 and we get into that target leverage ratio, and also we've provided our target free cash flow of $1.5 billion in 2027, that really opens up a lot more opportunities for us on the capital return side. We have a very healthy dividend. We'll continue to maintain that and look at that. Ultimately, it probably creates opportunities for us to be a bit more aggressive on the share repurchase side as we get into those higher free cash flow levels. We have a fair amount of certainty there, given the guidance we have provided around satellite CapEx and how that is going to decline in the next few years. Good segue. I think you did kind of touch upon maybe there's additional opportunities on the CapEx and OpEx side. 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. Just help us think about the near-term pressures in the non-satellite CapEx side. When will those ameliorate? What are some other potential non-satellite CapEx efficiencies you can squeeze out of the business? Any color there? Yeah, Wayne Thorsen, COO, has taken a very aggressive approach at looking at all our development costs across operating expense and capital. I absolutely see a path for reductions as we go into next year as he evaluates that. We really are much more disciplined about where we're spending and what we're spending that on. There is a much more detailed focus on ROI for those investments. We've talked about our focus around in-car subscription and building our ads business. He is also developing a lot of capabilities for us to continue to reduce costs as well. The thing we're experiencing this year is some investments in our ground repeaters and broadcast infrastructure, which should largely be done by the end of this year and put us on a path to get closer to that $400 million mark or maybe slightly below on non-satellite CapEx as we go into next year. Just so as of next year, as you kind of think about that level spend on non-satellite. Non-satellite. Awesome. All right. Jennifer, thank you so much for being here and joining us today. Thanks, everyone. Have an enjoy the rest of your day. Thank you, Sebastiano. Thank you.