And while that growth will continue, it's actually come down to more normalized level at this point. 360L mix is also sounds like tracking up nicely. I was hoping you could maybe talk a little bit more about the third-party distribution strategy. Not every app is available on Apple's App Store, but depending on the streaming service you. Could you give us a little bit of color on sort of the puts and takes there? Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. 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 2023s free cash flow later in the year. ET. The upside to the boring turn is that the media stock is consistently profitable. https://buff.ly/41pw0RC . Pandora revenue was down a modest one percent to $462 million during the quarter while its ad-based revenue remained relatively flat at $334 million. Our extensive portfolio includes chart-topping podcast by EarWolf and Team Cocoa and exclusive channels featuring A-list talents like Andy Cohen, [Inaudible], and Conan O'Brien. I just don't want to focus on ARPU solely because I do think there's demand at lower price points, and we are looking at more flexible pricing structures that we will likely implement when we launch the new platform. SiriusXM also launched Team Coco Radio in November to leverage the podcasts that the Conan OBrien-led production studio creates. Making the world smarter, happier, and richer. The company says it ended the first quarter with 46.7 million monthly active users, an eight percent decline from a year earlier. 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? Just subscribe to Sling, Fubo TV, or DirecTV Stream to get Newsmax TV on Android phones. So that sets us up well for the in-car funnel. The beat remains the same, even if this isn't likely to be a beat on Thursday. At this time, I'll turn the conference over to Hooper Stevens, senior vice president of investor relations and finance. And on that note, Tom, if you could just give us an idea, 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? There has been media speculation that Tucker Carlson and Don Lemon, two cable talk hosts that lost their jobs this week, could turn to podcasting or satellite radio as their next moves. 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? The Rob Carson Show gives you a humorous yet concerned analysis of Subscribe to Sling, Fubo TV, or DirecTV Stream to get Newsmax TV on Roku. This will have positive implications to ARPU, conversion, retention and subscriber growth in 2024 and beyond. [Operator Instructions] Thank you. At its cheapest plan, fuboTV offers 140+ channels to choose from, so youll have access to more than just sports as well. And how does that affect the placement and role of the SiriusXM product? And it's driven a lot by the programming additions that we've made and the streaming access. I think you'll see continuity as I lead our talented finance team and continued our disciplined approach to financial decision-making. You have permission to edit this article. Im truly excited about this opportunity and to join the conversation with investors and analysts and meet many of you in the coming weeks. And James, to your second question, so well see how this, how the OEMs navigate kind of the integration of CarPlay and Android Auto. On conversion rate, so 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 for new car in the low 20s for used. Thank you. Read on to learn which streamers support both your device and Newsmax TV live streams. Were investing in the new platforms. These are some of the easiest to use to get Newsmax TV access without cable. News fans often use antennas for streaming live TV like news shows for free, without cable. On conversion rates, so 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 the for new car in the low-20s for used. Gross profit in the Pandora and Off-Platform segment totaled $111 million. The difference is whether or not you listen to satellite radio in your car. New Home For Tucker Carlson Or Don Lemon? 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. 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. Published: April 25, 2023. Seasonality in advertising revenue and the strategic cost-saving measures should deliver ramping EBITDA in the second, third, and fourth quarter. Pleasure working with you and good luck on the next gig, keep them in the fairway. WebListen to music, live sports play-by-play, talk & entertainment radio and & favorite podcasts. And as Tom referenced earlier, we also expect each quarter going forward to be better to the prior quarter. Flixed.io's contributors and editorial team will often recommend products we believe to be useful for our readers. Tags: Financials Pandora Radio SiriusXM. 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. Cost basis and return based on previous market day close. Thank you, Jennifer. SIRI earnings call for the period ending March 31, 2023. For more information about those risks and uncertainties, please view Sirius XMs SEC filings and todays earnings release. 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. So its rolling out. Theres so much here you can explore it forever, and while I was wondering if you talk a little bit to conversion rates. The silver lining here -- as Sirius XM plays old hits to a thinning room with no one calling for an encore -- is that the valuation is surprisingly cheap. Yes, Barton. Great. There are many ways to watch Newsmax TV without cable, including Sling, Fubo TV, or DirecTV Stream. And secondly, regarding the satellite radio side, GM has announced that theyre planning on dropping Apple CarPlay. 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. Generally, the expectation was modestly negative. 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. Welcome to Sirius XMs First Quarter 2023 Operating and Financial Results Conference Call. I also want to thank Sean for his many contributions these last few years and ensuring a smooth transition. 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. And, Sean, best of luck in your new opportunity. Thanks, Hooper, and good morning, everyone. 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. But are there any circumstances where if I was Tucker or Don Lemon, Id certainly want to be with you on the linear and podcasting side rather than Newsmax or OAN. If you're trying to watch Newsmax TV without cable and you also watch a lot of sports, Fubo TV is probably the best pick for you. Thank you. The channel features exclusive hosts such as Cam & Company from NRANews (until June 2018), David Webb, and Andrew Wilkow. Learn More, Sirius XM(SIRI 2.70%)Q12023 Earnings CallApr 27, 2023, 8:00 a.m. 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 radio channel. And then maybe just one for Tom, just since its your first call as CFO, follow-up to James question. Jennifer, could you talk a little bit about the subscriber outlook for the rest of the year in particular, what are the things that are going to allow for the streaming only subscriber losses to sort of moderate? Clearly, with negative 347 this quarter, we are expecting, as we said, improvements quarter-over-quarter. Access My Account. OK. And to the point on 360L, can you give us a sense of right now how material 360L is for your subscriber acquisitions? In short, I am pleased with our financial performance this quarter and Im confident in our opportunity to expand our subscriber base as auto sales recover, and we launched the next generation Sirius XM experience later this year. 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. And once again, we saw the seasonally higher churn we tend to see in Q1. Welcome Tom. We expect this margin to trend favorably for the remainder of the year. Transitioning from a one size fits all approach to a dynamic multi-channel individualized approach, well promote only heard hear moments and exclusive talent to drive subscriber conversions among their fans. David Joyce -- Seaport Research Partners -- Analyst. And podcasting continues to be a bright spot. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. We advise listeners to not rely unduly on forward-looking statements and disclaim any intent or obligation to update them. So one of the things were 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 want to listen to at any given moment. Published: April 25, 2023. We may receive an affiliate commission from product sales generated through these affiliate links. It probably definitely falls into the diverse preferences of listeners buckets, but you just have two rather polarizing TV news personalities becoming available, albeit some bad actor issues that Tucker Carlson, Don Lemon, you certainly have been very tolerant view on all sides of the spectrum. And the great thing about our guidance is that if in the cost reductions weve put in place, were really well positioned, even if the market trends a little softer going forward. We expected Q1 to be a low point in terms of net ads. Thank you, Jennifer. Sirius XM reports first-quarter results on Thursday morning. Thanks, Matt. Podcast ad revenue jumped 34% during the first quarter compared to a year ago. Tom Barry -- Incoming Chief Financial Officer. We are very encouraged by the conversion lift we see in vehicles with 360L today. And our first question is from the line of James Ratcliffe with Evercore ISI. https://buff.ly/41pw0RC . When it cuts to commercial break, notice how its NOT the same ads? Jennifer, maybe just a follow-up on that line of discussion. And I think, ultimately, ARPU as well because we can deliver even more content and features to our subscribers. Yes, Barton. After all, the newsletter theyhave run for over a decade, Motley Fool Stock Advisor, has tripled the market.*. And whereas other services you need to sign up for a data plan, we cover the data costs ourselves. In closing, I would also like to thank Sean for making this transition as seamless as possible. 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. We expected Q1 to be a low point in terms of net adds. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. In many ways, Sirius XM Holdings(SIRI 2.70%) is an edgy rock band that has gone mainstream. 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. So that pressure will abate to some extent. WebIndeed, there is no Newsmax on Sirius XM since the corporation strives to keep its networks fair and independent. Our total new and used car penetration rate was 80% and 55% respectively, and our enabled fleet stands at about 154 million vehicles. Here's where you can and can't watch Newsmax TV without cable. 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. 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. What do you see as the right leverage profile, the right mix of capital returns? You may disconnect your lines at this time. If you have an ad-blocker enabled you may be blocked from proceeding. Self-pay subscribers decreased by 347,000 during Q1 as a result of fourth quarter declines in trial starts for new and used vehicles, reduced marketing spend, and seasonally higher churn typically seen in the first quarter. 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. 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. Read our full review of Sling and visit our TV guide to Sling to find out what you can watch right now. Pandoras ad hours were 2.59 billion, declined just 4% year-over-year as hours per active users climbed 4.5% with 21 hours per month. And I guess what I wanted to ask about is just a follow-up on the subscriber progression here. At this time, Ill turn the conference over to Hooper Stevens, Senior Vice President of Investor Relations and Finance. 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. Thank you. We also delivered better-than-expected ad revenue, partly due to our leading self-service and programmatic solutions that are allowing us to capture closed-end bookings, and I will address this more in a few minutes. The reversal isn't necessarily permanent, but it will sting in the near term. These collaborations demonstrate our strategy of inviting people to experience Sirius XM in the way that suits them best. On the self-pay side, I would continue to expect improvement in year-over-year comps as we roll out the rate increase. No reason to subscribe to a different streaming service just to get access to Newsmax TV. Please proceed with your questions. Thanks, Hooper, and good morning, everyone. I'm glad you extended your tenure in the media industry here. Our new platform will streamline purchasing and usage in and out of the car and enhance the value of Sirius XM making our service worth the premium for a wider range of audience segments. @SIRIUSXM is. Plus, we've compiled a list of the best overall streaming services for sports fans. It has been a real pleasure to serve this company, its talented employees and our shareholders as CFO these past 2.5 years. Welcome to SiriusXM's first quarter 2023 operating and financial results conference call. Stephen Laszczyk -- Goldman Sachs -- Analyst. And likewise, for XM radio, only XM packages can be activated. So your commentary on the intent to buy and the improving funnel sounds constructive. Well, were still very strongly positioned with churn at just over 1.6%. People find our way to our door, and we consider a lot of factors before we make any decisions. And I kind of apologize for the question, but I can't resist. I will now turn the call over to Sean for some brief remarks, and then Tom will go through the financials in more detail. But we are well positioned to make sure that our incorporation sustains through whatever model the OEMs choose to pursue. I was hoping you can maybe talk a little bit more about the third-party distribution strategy. Its growth is as pedestrian as it is predictable. 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. Sirius XM has an incredibly solid, profitable business today that benefits from a loyal subscriber base and enviable margins. I will start on advertising and hand it over to Scott on your second question. But SiriusXM has their own ad-revenue on those news shows. But positioning for the future, we have had a long history since we launched annual average increases in ARPU of about 3%. Subscribe to Sling, Fubo TV, or DirecTV Stream to get Newsmax TV on your iOS device. I know pen rates are higher now. 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. Do not get confused with these three mediums. As we begin, Id like to remind our listeners that todays call will include. If you're looking for the best way to stream Newsmax TV, Sling is our team's top pick. Advertising revenue was $334 million, decreased slightly by 1% in the first quarter. And then we just have these solutions in market for advertisers to come in and either buy across our network on an audience basis or buy show level and even custom integrations. Were increasingly flexible and even agnostic in how we add subscribers and accommodate listening preferences. 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 improve discovery, fully utilizing our unmatched content lineup.
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