Sirius XM at JPMorgan Conference: Strategic Shift and Growth Plans

On Tuesday, 13 May 2025, Sirius XM (NASDAQ:SIRI) participated in the 53rd Annual JPMorgan Global Technology, Media and Communications Conference. CEO Jennifer Witz discussed the company’s strategic focus on its in-car audience, highlighting both the positive impacts of this shift and challenges related to advertising and subscriber growth. The company is optimistic about long-term growth despite a "choppy" advertising market.

Key Takeaways

• Sirius XM is focusing on its core in-car audience, with a strategic pivot showing early benefits.
• The company is introducing modular pricing tiers to expand its market reach.
• Advertising revenue faces challenges, but Sirius XM remains confident in its financial guidance.
• Subscriber growth is expected to rebound in 2026 following strategic changes.

Financial Results

• Churn Rate: Decreased by 18 basis points year-over-year, indicating improved customer retention.
• ARPU: Decreased by 3% in Q1 but is expected to improve in the second half of 2025.
• Cost Savings: Achieved $30 million in Q1, aiming for a $200 million run-rate savings by year-end 2025.
• Free Cash Flow: Targeting $1.5 billion in 2027.
• Net Leverage: Aiming for a low to mid 3x net debt to EBITDA ratio.

Operational Updates

• 360L Rollout: Continues across OEMs, enhancing personalization and engagement.
• Used Car Strategy: Focused on filling data gaps and targeting used car owners with trials.
• Modular Pricing: Launched a $9.99 music-only package and plans to test a low-cost ad-supported tier.
• Content Strategy: Emphasizes differentiated, human-curated content, including exclusive and live content.
• Platform Migration: Ongoing migration expected to yield cost savings by removing duplicative systems.

Future Outlook

• Net Adds: Core in-car net adds are expected to improve in 2025, excluding one-time impacts.
• Advertising: Q2 bookings are expected to follow a similar trend as Q1.
• Capital Allocation: Balancing deleveraging with potential share repurchases.
• Non-Satellite CapEx: Expected to reduce, targeting closer to $400 million in 2026.
• Revenue Maximization: Focus on rate increases, upselling, and effective modular pricing management.

Q&A Highlights

• Subscriber Growth: Addressed potential short-term impacts from new initiatives like "click to cancel."
• Cannibalization Concerns: Emphasized targeted marketing to mitigate risks from lower-priced tiers.
• Advertising Strategy: Highlighted strengths in programmatic advertising and creator-driven content.

In conclusion, Sirius XM’s conference call provided insights into its strategic focus and financial expectations. For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - 53rd Annual JPMorgan Global Technology, Media and Communications Conference:

Sebastiano Petty, Analyst, JPMorgan: Good morning, everyone. I am Sebastiano Petty. I cover the cable, telecom, and satellite space at JPMorgan. I wanna introduce Jennifer Witz, CEO of SiriusXM since January of twenty twenty one. Jennifer, thanks for joining us today.

Jennifer Witz, CEO, SiriusXM: Thank you for having me, Sebastiano. Nice to be here.

Sebastiano Petty, Analyst, JPMorgan: So 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 the strategic shift on the one q call. What gives you confidence that this is the right long term growth strategy for Siri?

Jennifer Witz, CEO, SiriusXM: It’s a good place to start. So 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, and I am confident we’re on the right path and, you know, the number of examples of this. So our first quarter churn was incredibly low, down 18 basis points year over year, and 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 three sixty l rollouts. The advanced personalization that we have in 360L is driving better engagement.

And we continue to roll out across OEMs with that new interface. And we’ve had a number of other programs focused on the car where we do best. So 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. So a number of areas where on the product and distribution side, we’ve made strides focused on our core automotive business. And then 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.

So 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.

Sebastiano Petty, Analyst, JPMorgan: Great. And then on the tariff front, on the call Tom noted that he not only continues to sleep well at night, is good, he also Good quote. Yes, yes. But 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.

But as we look out just last week Mannheim used car index rose to the highest level since October of ’twenty three. SAAR, while down a little bit month over month in April, still remains at elevated levels. Any update in terms of those versus expectations for the years on the tariff side?

Jennifer Witz, CEO, SiriusXM: 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, and no direct impacts. Structure, we don’t believe will 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, you know, mitigated in some way. And and then, you know, clearly on on the subscriber side, as Tom said, so no material impact on subscriber or financial metrics certainly this year.

You know, I I do feel good about April March and April SAAR. You know, a lot of that is probably pull forward of demand, and we may see some reductions in the coming months as people are probably close to those purchase decisions. And, you know, April sales, just if you look at USLV, were up 11%. So even though down a little bit from March, it’s still very robust. And I think one of the things that gives us, you know, very solid feeling in sort of an insurance policy is just the used car penetration that has grown over time.

And, you know, again, our ability to kind of fill in the data gaps for where we don’t have dealer programs or there’s private sales has really helped us find those new owners of those used cars and offer them trials. So again, I feel really good about our differentiated trial funnel, the progress we’ve made there, and then just overall our strong customer metrics and subscriber metrics. Generally in the face of macroeconomic pressures, we’re really not seeing anything that would give me concern

Sebastiano Petty, Analyst, JPMorgan: at this point. Great,

okay. Thinking about churn and engagement, some of the stuff you kind of talked about was encouraging on the call and you highlighted that Siri saw the highest quarterly customer satisfaction ever which was the driver of the strong churn performance that you just did touch on with churn down across all three categories which I think is notable. So what are the contributors to that improved CSAT? 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. Well, pricing and packaging, What’s the silver bullet there?

Jennifer Witz, CEO, SiriusXM: It’s really all three of those, and I think that’s gonna structurally support our business going forward as well. But 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. And in the fall of last year, ahead of the rate increase, we actually made much of our 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.

And it’s a model for us going forward as well. And then again, our our broader pricing and packaging structure, I think, is gonna give us a lot more flexibility and improve engagement over time as well. But it really comes back to the content, and I think, you know, the differentiated content that we have. You know, if we look at the satisfaction results from the survey, it really is across the board. So customers continue to cite that we have music channels and and content that they can’t find anywhere else.

So it’s how we package and offer that content through human curation that’s really important to our subscribers, and we’ll continue to invest in that. And then the breadth of what we have outside of music is really core to retention as well. So customers take advantage of, say, the Catholic channel, right, when we’re selecting the new pope, or, you 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. So what’s really critical to the value proposition is the broad variety of content we have and that human curation across the board. And that’s what’s really driven overall satisfaction to highest levels that we’ve seen.

Sebastiano Petty, Analyst, JPMorgan: And so it seems as though you expect these churn tailwinds to continue, particularly as you move away from from the rate event.

Jennifer Witz, CEO, SiriusXM: 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 our general guidance for subscribers this year, where we do think there’ll be a couple hundred thousand of impact from some of these more onetime items. So click to cancel, I think we’ll talk more about that.

There are reduction in streaming acquisition marketing and the pull forward that we’re seeing by using shorter post trial promotions. I all you know, a couple of those could have an impact on our churn rates later this year, but 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.

Sebastiano Petty, Analyst, JPMorgan: Got it. And then 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?

Jennifer Witz, CEO, SiriusXM: It’s just super Yeah, we just started rolling those modular packages out. So 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. And so we’re just seeing some of those customers roll on to, you know, post trial, post promotion onto those full price packages. So engagement was really across the broader base of subscribers and particularly with those air the full price subscribers where we did make more content accessible across those packages and we saw customers take advantage of that quickly.

Sebastiano Petty, Analyst, JPMorgan: Got it. And then so with the new modular tiers and series efforts to broaden the TAM, so you’re focused on 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? And I guess the main concern we hear from investors is perhaps the unintended consequences perhaps of down tiering within the base. So I guess how do you manage that?

Jennifer Witz, CEO, SiriusXM: Yeah. I can come back to sort of the down tiering or cannibalization that I know investors and analysts seem to be concerned about. But 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. So as you know, we have a lot of premium packages at the $25 and up range, and we have a lot of very loyal customers paying those rates. And we just really don’t see customers downgrading from those tiers as they wanna take advantage of the full set of content.

You know, there’s that idea that I might wanna listen to the NFL game or I might wanna tune in to the Catholic channel or whatever it is. So they want the full set of content. We’ll then have a series of packages between sort of 10 and 20 dollars that have reduced content, you know, music only at $9.99, and then you can stack on top of that news, talk, sports for $5 each. That’s the modular packaging you’re talking about. And then 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.

And again, has some reduced content, but also more ads, especially across the music channels. And and we’ll have more opportunity to to increase ad load over time. But this is key to really opening up demand at for more price sensitive customers. So if you look at listening in the car for audio, 80% of consumption for 35 year olds and up is to f AMFM or SiriusXM. So it’s a radio based experience, and this is 35 and up.

So we have a lot of opportunity with packages sub $10 to go after those listening to AMFM who might not have considered SiriusXM in the past. So it is about opening up demand within our trial funnels. And on the cannibalization front, I think we’re gonna 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. And 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. So I’m not concerned about cannibalization, but of course we have to continue to share metrics to prove it to all of you as we roll these packages out.

Sebastiano Petty, Analyst, JPMorgan: And any learnings from the rollout of the modular tier?

Jennifer Witz, CEO, SiriusXM: Yeah. So we did a lot of testing on it last year before we rolled it out. And our experience so far, again, it’s only with new customers coming through the trial funnel. So 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. And what we’re seeing is that they’re choosing the highest price packages in most most cases.

So there’s $10, 15, 20, and 25, and most customers are actually choosing $25 during that initial they take a promotion and then they roll to that full price package. And then once they roll to the packages, they tend to stay at a much higher rate. Retention is much better. And so 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 price 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, but ultimately this is a much better way to support future revenue growth.

Sebastiano Petty, Analyst, JPMorgan: Okay. Lastly, as we kind of wrap up on the broadening of the TAM, share some similarity, 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? Is the modular tier intended to be I guess complementary to DSP services? That was kind of the digital strategy.

So maybe what are the key areas of differentiation we should be thinking about?

Jennifer Witz, CEO, SiriusXM: Yeah. I mean we’ve always been complementary. And other than maybe our older customers who haven’t taken a music streaming services and are still listening to their music collections in other ways, the vast majority of our subscribers already listen to other DSPs, right, and probably more than one, and primarily outside of the car. Right? And, again, you see that in that 80% statistic.

Our core audience segments are 35 and up or 45 and up, and those customers are listening to AMFM and SiriusXM in the car. It’s just a fundamentally different experience when you come into the car. Most people want linear content, right, a lean back experience, and we make that very easy with the broad set of content we have available. And we’re clearly much more competitive against AMFM, and that’s what we’re going after. So we’re positioning ourselves as complementary to the DSPs.

We think there’s room for both among our customer sets, and it’s really again about opening up demand with these packages for more price sensitive customers to experience SiriusXM.

Sebastiano Petty, Analyst, JPMorgan: Got it. So management expects core in car net adds to improve in 2025 excluding the one timers you did talk about, a couple hundred thousand there. But 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 trying We

Jennifer Witz, CEO, SiriusXM: haven’t so we have started the rationalization of our streaming marketing spend. That’s one of the biggest changes year over year. And we’ll continue to see impacts of that throughout the year. We had a very strong second half in terms of streaming ads to the overall business last year. And so the comp 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, you know, now isn’t going into effect until July.

And, look, we have this in place in several states today, including New York and California. So we have some idea as to what the impact will be, but broader knowledge of the existence of it, you know, and and the way we’re rolling it out, it’s gonna take time to mitigate some of those impacts. But, again, that’ll go into place in in the second half. That’s when we’ll see the impact of that. And then we’re anticipating and and have started to see some pull forward in churn related to the fact that we’re using shorter term promotions post trial.

And again, that’s one time, and we wouldn’t see that, you know, in the year over year impacts as we go into ’26. But it does mean all these things are sort of stacking in the second half. And while I think the comparisons might be tougher in the quarters to the rest of this year, it’s really gonna set us up well for improvements in the comparisons on net adds as we go into 2026.

Sebastiano Petty, Analyst, JPMorgan: Okay. But you are confident that this couple hundred thousand losses is still perhaps the right level?

Jennifer Witz, CEO, SiriusXM: I am confident that’s the right level and 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.

Sebastiano Petty, Analyst, JPMorgan: Got it. And then 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.

Jennifer Witz, CEO, SiriusXM: 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. So it actually might be slightly positive this year. Hopefully we’ll see some impact on used car. Mean used car sales have been very strong. It’s just a matter of inventory levels I think at this point.

Sebastiano Petty, Analyst, JPMorgan: Great. And then with ARPU expectations, maybe help us think about how to 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. And then you have easier comps in the second half as well. And so maybe help us think about the trajectory there and do you still expect to return to ARPU growth in the second half?

Jennifer Witz, CEO, SiriusXM: Yeah, so the first quarter was down about 3%, which was generally in line with our expectations. The rate increase went into effect in early March, so we only saw a partial impact of that in the quarter. So that will roll out over the course of the year. Most of our subscribers are on monthly plans, but 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. So the comparable the comps versus last year will get better, particularly in the second half.

And look, we do have an opportunity to open up demand at lower price points, and 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 price packages. So it’s a balance of those things, right, that there’s more opportunity at the top. Customers are increasingly choosing those $25 packages in our modular pricing and packaging rollout, and so we see real strength in the top end of that pricing and packaging strategy. But 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 gonna have to make that trade ultimately because we have room at the top, but I think the opportunity for us is to open up more demand with these lower priced packages including low cost with ads.

Sebastiano Petty, Analyst, JPMorgan: Okay, so it seems as though the selling of add ons is moving along nicely you’re Uneffective. Given you’re seeing higher demand at the top end of that. But 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 ’twenty five and in 2026? Is it getting the sell in, the add on tier right? Is that getting that right?

Is that the key benefit? Or is it more volume based or is it just maybe the key priorities that you’re

Jennifer Witz, CEO, SiriusXM: Yeah. I guess it’s probably three areas. It’s continuing to set ourselves up for increases in rates on full price packages in future years and making sure that we’re adding that value and upselling. Right? For customers, it it’s not been an active process for us.

But, again, with more marketing capabilities and we’ll be able to improve our ability to upsell customers who are on these lower price 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 in to those higher price packages. At the same time, you know, making sure that we’re maximizing demand for more price sensitive customers at that $9.99 price point. And then it’s rolling out low cost with ads, which of course will have ad ARPU on top of it, but at a sub $10 price point, you know, really having an attractive option in market for those price sensitive customers that are really looking for an in car solution. So it’s gonna be a balance, again, of rate and volume, and 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.

Sebastiano Petty, Analyst, JPMorgan: Any details perhaps about the ad supported subscription timing and rollout?

Jennifer Witz, CEO, SiriusXM: So we’re going to start testing early in the second half. And again it’s about making sure that we have the right go to market strategy, the right price point, and that we are you know, building out that 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. So everything we’re doing to support low cost the low cost with ad subscription will also benefit the broader advertising business on the SiriusXM side. So 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.

So there’s more to come that’ll start slowly towards the end of the year and ramp as we go into next year.

Sebastiano Petty, Analyst, JPMorgan: Great, and great segue because as we kind of think about advertising in the first quarter, maybe a better than feared following Tom’s update in mid March. You cited some pockets of weakness perhaps in travel autos and retails offset by strength in pharma and telco. Any update on ad trends since the call in terms of what you’re seeing out there?

Jennifer Witz, CEO, SiriusXM: Not really much that’s new. I think we’re still seeing some mixed results in retail and I think CPG. And 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. And then real strength in telco and pharmaceuticals and even some in financial services as well. But I think, you know, the trend line is probably gonna be more similar in terms of bookings in this q two as it was for the first quarter where there were a lot of late bookings.

And I’m really pleased with our programmatic offering because it does allow advertisers to come into market late in the quarter and take advantage of our offerings, especially across streaming and podcasting. So we continue to monitor it, but right now still very consistent with what we said on the call.

Sebastiano Petty, Analyst, JPMorgan: Awesome. Okay. And 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 Siri. I guess, tell us more about why is Siri well positioned to benefit from this shift towards short term performance marketing.

Jennifer Witz, CEO, SiriusXM: Yeah, I think we have great solutions across the board for marketers as they look at their full funnel of marketing opportunities. And this 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, and we have incredible strength in our content offering. So we have a number of solutions for advertisers both on the performance side and in brand building. Audio has really been about brand building, and, you know, part of that is because there’s not an opportunity to sort of click to take an action. But also advertisers can reach customers in a much a much broader set of locations and and situations with audio that can add value to their overall reach if they’re buying in video and other platforms.

So it’s where you don’t have a screen in front of you where we can really add reach to their overall media buy. So I feel really good about the opportunity to continue to serve advertisers on the brand side. And then from a performance standpoint, it’s about building better capabilities and targeting and measurement. So that’s identity solutions, clean room activations, you know, model integrations, and we’re 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. So ultimately, it’s really about the content we have as well.

And maybe we’ll talk a little bit about Creator Connect and the growth we’ve seen there, has been really strong.

Sebastiano Petty, Analyst, JPMorgan: Yeah. Tell us a little bit more about the Creator Connect solution you guys are

Jennifer Witz, CEO, SiriusXM: looking Yeah. So we I mean, if you look at our podcast portfolio, we’re really well positioned. So whether it’s Ashley Flowers or Alex Cooper on CallerDaddy, Mel Robbins or the Smartlist team, Conan O’Brien, and many of these creators are increasingly leveraging video. You see the explosive growth really in YouTube and video podcasting, and I think you’ll see that across other platforms as well. And this is about us working closely with these creators to make sure that they’re able to monetize wherever they are.

So it starts with audio, but we’re increasingly monetizing across video podcasts and then extending into their social channels as well. So it’s about advertisers being able to align with these creators and the talent and broaden their campaigns across all these channels. So we think it’s a great way also to capture video budgets and social budgets and extend beyond the audio market.

Sebastiano Petty, Analyst, JPMorgan: Great, and I think as we wrap up here, thinking about just the 2025 target program of $200,000,000 of run rate savings by year end, big focus for the team, you achieved $30,000,000 of those savings in the first quarter. But 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. And so maybe help us think about the main factors driving that. What are the levers to return the business back to margin expansion?

Jennifer Witz, CEO, SiriusXM: 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 subscription revenue. And as we’ve seen some declines in the last couple of years on subscription revenue, that’s fallen through and pressured EBITDA. And so we’ve had a very active program in managing costs, as you know, and 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 SiriusXM, and so reducing software licenses, development resources, the support for those software licenses as well. And then better optimizing and being more efficient in targeting with our marketing. And then conversational AI and generative AI that we’re using and leveraging very significantly across customer interactions on the SiriusXM side and to build out better self serve solution in the advertising side as well. So 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.

But ultimately, it’s really about getting subscription revenue back to stabilization and growth going forward because of the strong margins we have there.

Sebastiano Petty, Analyst, JPMorgan: Got it. And then I think I asked this on the call as well, but 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, but 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, but help us think about why the conservatism from the team and could we see upside to guidance if visibility were to improve on the advertising side?

Jennifer Witz, CEO, SiriusXM: Yeah, I think, look, the advertising market is definitely a little choppy, and we’re just being cautious. Right? I mean, we set our guidance late last year before some of this macro uncertainty sort of came to light. And so I think we just wanna be really cautious about providing any updates, and we feel very confident about our guidance on revenue, EBITDA, and free cash flow and sort of the the general parameters we’ve given around subs. But it’s just too early, I think, to to change anything.

We have, I think, a very robust cost reduction program in place, but to the extent ads don’t materialize in the way that we would expect, we need a little bit of cushion there on overall EBITDA. But again, feel really good about where we are today and confident in our overall guidance.

Sebastiano Petty, Analyst, JPMorgan: 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 forecast net leverage of 3.3 exiting 2026, which definitionally gets you to the low to mid point of the range. But just help us think about how you’re balancing the deleveraging opportunities versus opportunistic share repurchases given valuation.

Jennifer Witz, CEO, SiriusXM: Yeah, we’ve had just a modest share repurchase program in place to take advantage of any real disruptions. And 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, you know, again, our target leverage ratio being low to mid three times net debt to EBITDA. And, you know, look, going forward, as we get into 2026 and ’27 and we get into that target leverage ratio and also we’ve provided our target free cash flow of 1,500,000,000.0 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, you know, continue to maintain that and and look at that, but it 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.

And we have a fair amount of certainty there given the guidance we provided around satellite CapEx and how that’s going to decline in the next few years.

Sebastiano Petty, Analyst, JPMorgan: Well, good segue. And I think you did kind of touch upon maybe there’s additional opportunities on the CapEx and OpEx side. But 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. But just help us think about the near term pressures in the non satellite CapEx side. When will those ameliorate?

And then what are some other potential non satellite CapEx efficiencies you can squeeze out of the business? Any color there?

Jennifer Witz, CEO, SiriusXM: Wayne Thorson, our COO, has taken a very aggressive approach at looking at all our development costs across operating expense and and capital. And I I absolutely see a path for reductions as we go into next year as he evaluates that. And we really are much more disciplined about where we’re spending and what we’re spending that on. So there’s 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, and and he’s also developing a lot of capabilities for us to continue to reduce costs as well.

So the the thing we’re 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 $400,000,000 marker, maybe slightly below on nonsatellite CapEx as we go into next year.

Sebastiano Petty, Analyst, JPMorgan: Just so as of next year as you kind of think about that level spend on the on the nonsatellite?

Jennifer Witz, CEO, SiriusXM: Non satellite.

Sebastiano Petty, Analyst, JPMorgan: Awesome. Yeah. All right. Well, Jennifer, thank you so much for being here and joining us today. And thanks, everyone.

Have a enjoy the rest of your day.

Jennifer Witz, CEO, SiriusXM: Thank you, Sebastiano. Thank you.

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