As previously discussed, we reduced marketing spend, particularly around streaming in anticipation of product improvements we are launching later this year. For more information about those risks and uncertainties, please view Sirius XMs SEC filings and todays earnings release. AAOS will roll out in small volumes initially, but should grow materially to become the dominant OEM operating system improving 360L adoption and feature parody along the way. We're investing in our future. Maybe for Jennifer on distribution, you called out the partnership with Walmart+ announcing the quarter. After all, the newsletter theyhave run for over a decade, Motley Fool Stock Advisor, has tripled the market.*. Sure. A question-and-answer session will follow the formal presentation. For more information about those risks and uncertainties, please view Sirius XMs SEC filings and todays earnings release. Thank you, and good morning, everyone. But we are well positioned to make sure that our incorporation sustains through whatever model the OEMs choose to pursue. Welcome to SiriusXM's first quarter 2023 operating and financial results conference call. Oh, thank you. Anything different here going forward that we should be mindful of relative to that we thought about it in the past? At this time, I'll turn the conference over to Hooper Stevens, senior vice president of investor relations and finance. Theyre looking for more opportunities to more easily navigate the service. Our ad supported portfolio from Pandora to the Sirius XM podcast network, which also includes two of the largest Hispanic podcast networks with Pattaya and reVolver offers opportunities for advertisers to reach large and diverse audiences in audio. SiriusXM bought Conan OBriens Team Coco last year in a $150 million deal that also included a five-year talent agreement for Team Coco staff to collaborate on content, including the new satellite We're investing in the new platforms. In closing, I would also like to thank Sean for making this transition as seamless as possible. Youll be missed. Thank you. 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. And we will continue to be active in generating trials. This past quarter, we introduced a first-of-its-kind six-month trial offer for Walmart Plus members, giving them the choice of in-car or streaming-only packages. But positioning for the future, we have had a long history since we launched of annual average increases in ARPU of about 3%. Our Q1 results were better than we expected certainly based on where trends were heading in December or January. Yes, Newsmax TV is included in your DirecTV Stream subscription. SiriusXM also launched Team Coco Radio in November to leverage the podcasts that the Conan OBrien-led production studio creates. Thanks, operator, Rob. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. And Im excited to see how this year shapes up. And our ad technology business continues to be extremely profitable, growing about 20% year over year and partially offsetting broader headwinds during the first quarter. 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. DirecTV Stream plans start at $69.99. Here you've come in and you've updated financial guidance. And then over the last few years, especially during COVID, there was a massive acceleration in the percentage of millennials buying cars. We are confident that the upgrade will boost engagement and customer satisfaction for indoor and streaming only customers alike, she said. And our ad technology business continues to be extremely profitable, growing about 20% year-over-year and partially offsetting broader headwinds during the first quarter. I was just wondering if you could give us an update on that subscriber kind of loose commentary. 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 inflater on webcasting performance rights. For Sirius XM radio, Sirius XM packages can be bought. I think youll see continuity as I lead our talented finance team and continued our disciplined approach financial decision making. Thank you, and good morning, everyone. News fans often use antennas for streaming live TV like news shows for free, without cable. Thanks, Matt. 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. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Today, we'll have prepared Greg and guests discuss politics and news of the day. *Average returns of all recommendations since inception. Obviously, as we said to you at the year-end call that all of a lot of our free cash flow and a lot of our numbers will be coming in the second half of the year. And likewise, for XM radio, only XM packages can be activated. We extended agreements with the NHL and NASCAR ensuring continued access for our subscribers for years to come. Sirius XM (SIRI) Q1 2023 Earnings Call Transcript, 3 Nasdaq 100 Stocks That Are No-Brainer Buys in April, I Wouldn't Touch This Stock With a 10-Foot Pole 10 Years Ago -- Now I Can't Stop Buying Shares. 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. 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. Sirius is getting a cut of the $ from those ads on the radio. This will conclude todays conference. We expect to see more rapid feature adoption tied to automakers' incorporation of the Android Automotive Operating System with our 360L platform beginning later this year. Thank you. @SIRIUSXM is. The other two components of Sirius XM's full-year outlook -- adjusted Cost basis and return based on previous market day close. Good morning, everyone. Sirius xm Orbiter SB4000/SR4000/SM4000 Receiver * LIFETIME ACTIVE SUBSCRIPTION * Subscribe to Sling, Fubo TV, or DirecTV Stream to get Newsmax TV on your iOS device. Sure. Please proceed with your questions. And then secondly, it's a bit of a more depressed question than an analyst question. Thank you, Ben. Sirius XM ( SIRI 1.35%) Q1 2023 Earnings Call. 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. This decline of $114 million is principally the result of increased satellite capex of $103 million as we invested the construction of SXM-11 and 12 and a one-time severance payment of approximately $15 million related to our cost optimization strategy. And I guess what I wanted to ask about is just a follow-up on the subscriber progression here. February 16, 2022. Thank you, and good morning, everyone. Read on to learn which streamers support both your device and Newsmax TV live streams. And please let me add my welcome to Tom Berry, who may be new to this call, but is a veteran of Sirius XM and its finance organization since 2009. So whats key is the rollout, and this has been a long time coming, and the promise of 360L is now delivering. You may disconnect your lines at this time. The Rob Carson Show Podcast. Look forward to working with you. We expect to see more rapid feature adoption tied to automakers incorporation of the Android Automotive operating system with our 360L platform beginning later this year. Certainly, theres still uncertainty in the second half I think, but we are hopeful that the market will continue to recover. 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. It allows us, like many other services to update much more frequently our feature set, but we also have a unique setup because we will continue to maintain preferential treatment in terms of display. In short, I am pleased with our financial performance this quarter, and I'm confident in our opportunity to expand our subscriber base as auto sales recover and relaunch the next-generation SiriusXM experience later this year. So what's key is the rollout, and this has been a long time coming, and the promise of 360L is now delivering. US satellite radio firm SiriusXM has published its financial results for the first quarter of 2023. Download the SiriusXM Dealer App. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. With that, I'll turn it over to the operator for Q&A. Thanks, Matt. Tom Barry -- Incoming Chief Financial Officer. 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. SiriusXM also launched Team Coco Radio in November to leverage the podcasts that the Conan OBrien-led production studio creates. Generally, the expectation was modestly negative. 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. Listen online or download the iHeart App. So Q1 was impacted, as we said, by lower fourth quarter trials than third quarter. We are already beginning to see benefits from cost reductions implemented in Q1 across every element of our business. Pandora was supposed to be a catalyst for growth, a digital escape hatch the moment that satellite radio would prove transitory and eventually obsolete. Our next question comes from the line of Barton Crockett with Rosenblatt Securities. Obviously, as we said 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, but we're going to continue with our disciplined approach, as we've used over the last couple of years. Our total new and used car penetration rate was 80% and 55% respectively, and our enabled fleet stands at about 154 million vehicles. Paying a premium for satellite radio isn't very compelling in this climate, where inflation and interest rates are gnawing away at discretionary income. And we do expect auto sales to continue to grow. 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 had 34 million subscribers as of March 31. I'm truly excited about this opportunity and join the conversation with investors and analysts and meet many of you in the coming weeks. And 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. Stephen Laszczyk -- Goldman Sachs -- Analyst. Please proceed with your questions. With that, Ill hand the call over to Jennifer. So some OEMs will choose to pay for the trial and receive a higher subsidy and obviously, there's the impact of revenue share as well. 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 and programming and content expenses climbed 6% due to increased licensing fee and production costs. 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. But we also have a unique setup because we will continue to maintain preferential treatment in terms of display. It also features popular syndicated programs including Sean Hannity and Mark Levin. And then over time, in the years to come, it will get to 80% of our trial starts. The Rob Carson Show gives you a humorous yet concerned analysis of daily political events and how they affect struggling Americans, as well as exclusive interviews with influential hard-hitting guests. Apr 27, 2023, 8:00 a.m. The stock has fallen to the point where its once puny dividend now amounts to a respectable 2.6% yield. The dynamics are tough in the market because many buyers as new car prices start to come down may migrate from used cars to new cars and inventories are still pretty tight on the used car side. Certainly, there's still uncertainty in the second half, I think, but we are hopeful that the market will continue to recover and the great thing about our guidance is that even the cost reductions we put in place, we're really well-positioned even if the market trends a little softer going forward. In addition to satellite radio, customers who buy or lease an equipped vehicle are eligible to receive a 3-month trial subscription to one or more of the following services. Invest better with The Motley Fool. Here youre seeing the normal effects of seasonally light ad revenue in the first quarter, combined with recent ad headwinds plus the CPI inflater to web streaming royalties. Greetings. I know pen rates are higher now, competition is maybe a bit higher now, 360L mix also sounds like tracking up nicely. As previously discussed, we reduced marketing spend, particularly around streaming in anticipation of product improvements we are launching later this year. That's why we recommend trying Sling. I was wondering if you talk a little bit to conversion rates. They showed a slight decline in its revenues: down 1.9% year-on-year to $2.14bn. This feature drives listener engagement that leads to higher retention. Well continue our current process of being cautious and disciplined. You will need to use your smartphone to get the app and connect it to the internet. 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. On the churn side, in car, Q1 is always seasonally soft for us, and we anticipate that to be true for this year as well. Hi. 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%. Please disable your ad-blocker and refresh. Turning to our content. Do not get confused with these three mediums. Copyright 2022 Flixed, Inc. All Rights Reserved. Just subscribe to Sling, Fubo TV, or DirecTV Stream to get Newsmax TV on Android phones. And I highlighted some of these metrics earlier, but we are seeing definitive increases in conversion rates for trialers, particularly younger trailers, who are using the features, but also just have 360L capable vehicles. To make the world smarter, happier, and richer. This past quarter, we combined Sirius XMs podcast group and comedy and entertainment group into one unit. And then to your question on streaming net ads, we did -- to some extent, we've gone through this hurdle of the reduced marketing spend we had in the fourth quarter, and now we're operating at a much more efficient level. Sling is available starting at $40 per month for 30 channels, including Bloomberg, BBC America, and Cheddar Business. Thank you. And I think we're very well-positioned to deliver our service through AAOS. And I kind of apologize for the question, but I can't resist. And we are just getting started. The Rob Carson Show gives you a humorous yet concerned analysis of Turn on the FoxNews simulcast on siriusxm, and turn your tv on as well. Please proceed with your question. 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. James Ratcliffe -- Evercore ISI -- Analyst. A longtime Newsmax contributor, #1 rated radio host and successful columnist, Gerry Callahan calls it like he sees it and offers sharp commentary on the news of the day. This contributed to the expected negative subscriber growth in the quarter. Seasonality in advertising revenue in these strategic cost saving measures should deliver ramping EBITDA in the second, third and fourth quarter. SIRI earnings call for the period ending March 31, 2023. In closing, I would also like to thank Sean for making this transition as seamless as possible. We'll start seeing it actually come through used car trial starts, as well as some of those early cars turnover. Our strong distribution, investment in new product offerings and our unmatched content offering that provided a foundation for future growth. Welcome to SiriusXM's First Quarter 2023 Earnings Conference Call. They will improve over the course of the year as will overall total net adds. And as we noted, our Q1 was at 3.4 times, and we returned $161 million to shareholders in the first quarter, and we'll continue to be opportunistic for the remainder of the year. At this time all participants are in a listen-only mode. It will be less impactful than the last time we did the rate increase because we focused primarily on full-price plans, and that has a lot to do with maintaining our promotional plans and market our discounted plans to be able to better onboard and retain our subscriber base where it makes sense. Our extensive portfolio includes chart-topping podcasts by Earwolf and Team Coco and exclusive channels featuring A-list talent like Andy Cohen Inks and Conan OBrien. 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. SiriusXMs satellite radio service has been built in part with the help of dozens of talk personalities, most notably Howard Stern. So Q1 was impacted, as we said, by lower fourth-quarter trials and then third quarter, but Q1 trials have been stronger -- were stronger than Q4. Our next question is from the line of Steven Cahall with Wells Fargo. By. Analysts see flat results, in line with Sirius XM's uninspiring full-year guidance. Our next question is coming from the line of Ben Swinburne with Morgan Stanley. And I think were very well positioned to deliver our service through AOS [ph]. Welcome Tom. Putting all this together, adjusted EBITDA of $625 million was down 9% over the prior year. We expected Q1 to be a low point in terms of net ads. 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. Thank you, Sean, and thank you, Jennifer. I mean, the economy, we just had a soft GDP number a couple minutes ago. Now I listen to So that pressure will abate to some extent. If it has a chance to turn things around, investors don't have to wait long for the next big test. This gives us a general idea of the trajectory and the scope of spending. 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. The difference is whether or not you listen to satellite radio in your car. It allows us like many other services to update much more frequently our feature set. 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. But Q1 trials have been stronger, were stronger than Q4. But are there any circumstances where if I was Tucker or Don Lemon, why would I certainly want to be with you on the linear and podcasting side rather than Newsmax or OEM, but is that just two friends for you. Earnings of $0.07 a share would be a small step down from the $0.08 a share it clocked in with a year earlier. Do not sell or share my personal information. Moving forward, we value a strong balance sheet that provides us with flexibility to navigate a variety of future environments. WebFind Rob Carsons radio show LIVE near you More Info. Fubo TV plans start at $69.99. And we're really focused, again, heads down on investing in this new platform and making sure that that positions us for growth going forward. Good morning, everyone. Our next question is from the line of David Joyce with Seaport. And I guess what I wanted to ask about is just a follow-up on the subscriber progression here. Image source: The Motley Fool. I also want to thank Sean for his many contributions these last few years and ensuring a smooth transition. We believe our overall subscriber performance should also trend better quarter-over-quarter as the year progresses. 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. 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-end bookings, and I will address this more in a few minutes. Sirius made the launch in July of 2000 which is 43 years later than the famous Sputnik. The satellite radio giant will carry every single pick live from Kansas City. Or search "Newsmax" on your favorite podcast platform. And again, I kind of apologize for the question, but Id love I cant resist. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Access My Account. And on that note, Tom if you could just give us an idea, your key priorities coming into the role, sort of whats at the top of the bullet point list on the whiteboard in your office? You can watch Newsmax TV on your Pixel or Samsung or Nokia or whatever type of Android you have! As you know, it is a big part of our funnel but we have seen used car trial starts did increase in Q1 versus Q4, which sets us up well. Matthew Harrigan -- The Benchmark Company -- Analyst. And returning this fall, Lets Go!, hosted by Tom Brady, Larry Fitzgerald and Jim Gray will be available first to our subscribers, then on demand exclusively in our app. Well, were still very strongly positioned with churn at just over 1.6%. $13.95 shipping. Following this build cycle, we do not anticipate any spending on satellites for many years. Please proceed with your questions. So Stephen, the Walmart and T-Mobile have been great partners and Im very pleased that weve been able to launch with them and test out different trial offers. And of course, that helps with the funnel there. 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. Were in about I think its about a third of our new car trial starts have 360L currently that will increase to about 40% by the end of the year. Our very distribution models, subscription and ad supported reach audiences wherever and however they want to listen and bring value to the Sirius XM subscription as exemplified by recent deals with Kevin Hart, Kelly Ripa and Tom Brady. Pause and rewind live radio. 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. And is it really the downward pressure weve seen over the last few years had a lot to do with the dramatic increase we saw in pen rates over that time 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. Sirius XM ( SIRI 1.35%) Q1 2023 Earnings Call. That may be at the top end of the range, but I still think theres opportunity. Like how should we think about the cadence of ARPU from here this year as well as what would the longer-term impacts be from any of the newer auto deals since we saw some of the promo numbers increase here? If your radio is Sirius, only Sirius packages can be used. Please proceed with your question. SiriusXM 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. 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. Sirius XM used to be a darling for speculators, screaming fans who would cheer its every uptick and downtick. I will start on advertising and hand it over to Scott on your second question. So that sets us up well for the in-car funnel. But my overall view is to work on obviously optimizing the business, support the growth of the business and position us for the year ahead. Good morning. SiriusXM has an incredibly solid, profitable business today that benefits from a loyal subscriber base and enviable margins. Read our full review of Sling and visit our TV guide to Sling to find out what you can watch right now. The beat remains the same, even if this isn't likely to be a beat on Thursday. And James, to your second question, so we'll see how this -- how the OEMs navigate kind of the integration of CarPlay and Android Auto, I think GM seems to be somewhat unique in that path. Or is there anything different that you can talk to at this point? First of all, Sean, thanks very much. Or is there anything different that you can talk to at this point? And how does that affect the placement and role of the SiriusXM product? Other channels on Sling include: Longhorn Network, Cable News Network, HLN, Hallmark Movies & Mysteries, Turner Classic Movies, TV Land, A&E, AMC, BET, Bravo, Comedy Central, E! SiriusXM cut its sales and marketing costs by 17% during the first three months of the year, as Witz said they have decided to delay advertising efforts in anticipation of product improvements they are launching later this year. In this quarter, we recorded $2.14 billion of revenue, a modest 2% decline compared to the prior year period. And 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. Hooper Stevens. Thank you. We believe our overall subscriber performance should also trend better quarter over quarter as the year progresses. 1. You have permission to edit this article. Sirius XM's guidance implies that its self-pay subscriber count will decline this year. So we look at this probably more often than not, but we spend a lot of time looking at this. Clearly, with negative 347,000 this quarter, we are expecting, as we said, improvements quarter over quarter. The majority of OEMs have either announced or in process of moving toward that operating system. Thank you. And to the point on 360L, can you give us a sense of right now how material 360L is for your subscriber acquisitions? Just help us think about bridging the Q1 losses towards better numbers in the back half between those two subscriber bases, if you would? Sirius XM's guidance calls for $9 billion in revenue this year, flat with where it landed in 2022. 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 Sirius XM to make it a standard feature on all Mercedes-Benz models available in the United States. The choices for watching Newsmax TV aren't limited to our top picks. On the self-pay side, I would continue to expect improvement in year-over-year comps as we roll out the rate increase. And we do expect auto sales to continue to grow. Listeners can hear Kevins show Gold Minds on all major podcast platforms with extended episodes available early to subscribers on his Laugh Out Loud Radio channel only on Sirius XM.