Sirius XM Holdings Inc. (NASDAQ:SIRI) Q3 2018 Earnings Conference Call Transcript

Oct 24, 2018 • 08:00 am ET

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Sirius XM Holdings Inc. (NASDAQ:SIRI) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning and welcome to SiriusXM's Third Quarter 2018 Results Conference Call. Today's conference is being recorded. A question-and-answer session will be conducted following the presentation. (Operator Instructions)

At this time, I would like to turn the call over to Hooper Stevens, SVP, IR and Finance. Mr. Stevens, please go ahead.

Executive
Hooper Stevens

Thank you and good morning everyone. Welcome to SiriusXM's Third quarter earnings conference call. Today, Jim Meyer, our CEO will be joined by David Frear, our Senior EVP and CFO. At the conclusion of our prepared remarks, management will be glad to take your questions. Scott Greenstein, our President and Chief Content Officer will also be available for the Q&A portion of the call.

(Forward-Looking Cautionary Statements)

As part of this call, the participants may comment on the proposed merger involving SiriusXM Holdings and Pandora Media. SiriusXM intends to file a registration statement on Form S-4 with the SEC, which will include a proxy statement of Pandora and a prospectus of SiriusXM and each party will file other documents regarding the proposed transaction with the SEC. As we begin, I'd like to advise our listeners that today's results will include discussions about both actual results and adjusted results. All discussions of adjusted operating results exclude the effects of stock-based compensation.

With that, I'll hand the call to Jim Meyer.

Executive
Jim Meyer

Thanks Hooper. Thank you and good morning for participating in today's call. I can't think of a more exciting time for all of us at SiriusXM and I'm thrilled with the results we were able to deliver in the third quarter. With this momentum, I'm once again pleased to increase our guidance for 2018 subscribers, revenue and EBITDA growth, we are driving more subscribers through a bigger and able fleet and maintaining our strong content line-up as you would expect us, both of which position the company for tremendous future success. But, we're going even further with our proposed acquisition of Pandora Media. Our investments in 360L, our next generation in vehicle platform and our vastly expanded push to drive engagement outside of the car with better streaming apps, including our new marketing agreement with Amazon.

SiriusXM added about 300,000 net new self-pay subs in the third quarter, similar to the level we obtained in last year's third quarter. We overcame the headwind inherent to a bigger base by achieving one of our lowest ever churn rates for any third quarter and our self-pay base now stands at 28.5 million subscribers with total paid subscribers, reaching 33.7 million.

David will speak more about the financials, but I'm thrilled, we attained our highest ever quarter of revenue at $1.47 billion, our highest ever adjusted EBITDA at $589 million. And our highest ever EBITDA margin reaching 40% for the first time. We attained this margin by coupling strong revenue growth was equally impressive expense management. Auto sales continued at a high level in the third quarter with a SAAR of about 16.9 million and I am hearing in my conversations with the OEMs