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Sirius XM Holdings Inc. (SIRI) Present at UBS Global Media and Communications Conference (Transcript)
SIRISirius XM(SIRI)2023-12-04 22:15

Company and Industry Overview * Company: Sirius XM Holdings Inc. (NASDAQ: SIRI) * Industry: Media and Communications, specifically satellite radio and streaming services Key Points 1. Next-Generation Platform Launch * Launch: SiriusXM is launching a new next-generation platform, initially on streaming, with plans to roll it out across other products in the future. * Features: The platform includes a new streaming-only lower price point of 9.99/month,enhancedsearchandrecommendationcapabilities,andanewin−carplatformcalled360L.∗∗∗Objective∗∗:Theplatformaimstogrowsubscribers,subscriptionrevenue,andadvertisingovertime.2.StrategicCostManagement∗∗∗Efforts∗∗:SiriusXMhasbeenfocusedonstrategiccostmanagement,identifying9.99/month, enhanced search and recommendation capabilities, and a new in-car platform called 360L. * **Objective**: The platform aims to grow subscribers, subscription revenue, and advertising over time. 2. Strategic Cost Management * **Efforts**: SiriusXM has been focused on strategic cost management, identifying 40 million in net savings in the last quarter. * Focus: The company will continue to focus on cost reductions while also investing in product and technology. 3. Balance Sheet and Free Cash Flow * Balance Sheet: SiriusXM has a strong balance sheet with 2billioninliquidityandnobondmaturitiesuntil2026.∗∗∗FreeCashFlow∗∗:Thecompanyexpectsfreecashflowtogrowoverthenextfiveyears,despitehighcapitalexpendituresforsatelliteandnon−satelliteCapEx.4.SubscriberGrowth∗∗∗Trends∗∗:SiriusXMexpectsmeaningfulimprovementinsubscribernetaddsnextyearcomparedtothisyear.∗∗∗Challenges∗∗:Vehicle−relatedchurn,particularlyintheusedcarmarket,remainsachallenge.∗∗∗Strategies∗∗:Thecompanyisfocusingonpartnershipsandprogramstodriveconversionratesandimprovesubscriberretention.5.Advertising∗∗∗Assets∗∗:SiriusXMhasauniquesetofassetsinaudio,includingSiriusXMbroadcast,Pandora,andotheroff−platformadvertising.∗∗∗Podcasting∗∗:Podcastinghasseenstronggrowth,withafocusonadrepresentationdealsandexclusivecontentpartnerships.∗∗∗Monetization∗∗:SiriusXMisexploringdifferentmonetizationopportunities,includingad−supportedandsubscriptionmodels.6.PricingStrategy∗∗∗Streaming∗∗:Thenewstreamingservicewillbepricedat2 billion in liquidity and no bond maturities until 2026. * **Free Cash Flow**: The company expects free cash flow to grow over the next five years, despite high capital expenditures for satellite and non-satellite CapEx. 4. Subscriber Growth * **Trends**: SiriusXM expects meaningful improvement in subscriber net adds next year compared to this year. * **Challenges**: Vehicle-related churn, particularly in the used car market, remains a challenge. * **Strategies**: The company is focusing on partnerships and programs to drive conversion rates and improve subscriber retention. 5. Advertising * **Assets**: SiriusXM has a unique set of assets in audio, including SiriusXM broadcast, Pandora, and other off-platform advertising. * **Podcasting**: Podcasting has seen strong growth, with a focus on ad representation deals and exclusive content partnerships. * **Monetization**: SiriusXM is exploring different monetization opportunities, including ad-supported and subscription models. 6. Pricing Strategy * **Streaming**: The new streaming service will be priced at 9.99/month, positioning it as a complementary product to other music streaming services. * ARPU: SiriusXM's ARPU is trending at $15.70, with a focus on balancing core subscriber base growth with new demand capture. 7. Liberty Proposal * Discussion: SiriusXM is actively discussing a proposal from Liberty regarding additional leverage. * Objective: The company aims to reach its long-term target leverage rate of the low to mid three times EBITDA range. * Timeline: The resolution of the proposal is expected to be positive and will position the company well for future growth.