Sirius XM Holdings Inc. Q1 FY2026 earnings call

Good morning, everyone. We are off to a strong start in 2026. Executing with focus and discipline against three strategic priorities. Subscription business performance was strong with meaningful year-over-year improvement in self-pay net additions. Advertising revenue grew 3% in the quarter, driven by 37% increase in podcasting ad revenue. We have a landmark partnership with YouTube to enhance advertising capacity. Content is a defining strength with new programming launches. Hardware and software evolution is enhancing the listener experience.

SiriusXM generated 1.6 billion in first quarter revenue. Subscriber revenue was up 1% to 1.5 billion, supported by ARPU increasing 1% to $14.99. SiriusXM advertising revenue declined 10% to $35 million, primarily due to softness in news. Equipment and other revenue at $41 million and $31 million respectively were relatively flat year over year. Gross profit increased 3% to $966 million, with margin expanding to 61%. Self-pay net additions were negative 111,000, a 192,000 increase versus the prior year period, driven in part by growing adoption of companion subscriptions.

Our disciplined approach gives us confidence in delivering on our 2026 full-year guidance, relatively flat revenue and stable adjusted EBITDA. Subscriber trends are expected to be modestly lower year over year. Focus remains on strong execution and driving continued free cash flow growth. Expect continued growth in free cash flow to approximately $1.35 billion, with a path to $1.5 billion in 2027.

Q: Steven Lasik with Goldman Sachs asked about monetizing spectrum.

A: Jennifer and Wayne discussed exploring spectrum monetization opportunities, partnership - focused, and ensuring core services are protected.

Q: Jessica Reif - Ehrlich with Bank of America asked about incremental audience reach and balance sheet.

A: Scott Walker talked about YouTube partnership bringing 255 million monthly listeners. Zach discussed capital allocation framework.

Q: Barton Crockett with Rosenblatt Securities asked about YouTube deal take rate and space ecosystem.

A: Jennifer and Wayne discussed YouTube deal scale and spectrum use evolution.

Q: Brian Kraft with Deutsche Bank asked about 360L capabilities and YouTube partnership.

A: Scott talked about 360L addressability and YouTube partnership reasons.

Q: Sebastiano Petty with JP Morgan asked about spectrum migration and timing.

A: Wayne and Jennifer discussed no plans to force migrate and timing considerations.

Q: David Joyce with Seaport Research Partners asked about companion strategy.

A: Jennifer and Zach discussed companion strategy contribution and subscriber trends.

Q: Kaqqan Meral with Evercore ISI asked about reshaping business for advertising.

A: Jennifer discussed existing segments and focus on existing business opportunities.

Q: Stephen Cahill with Wells Fargo asked about subscriber guidance and conversion.

A: Jennifer and Zach discussed subscriber guidance and conversion trends.

Q: Cameron Manson Perrone with Morgan Stanley asked about growth in balance of year.

A: Zach discussed first quarter results and focus on execution.

Q: Clay Griffin with Moffitt Nathanson asked about YouTube partnership inventory and accounting.

A: Scott discussed YouTube partnership inventory scope and accounting in Pandora and off - platform segment