Sirius XM Holdings Inc. (NASDAQ:SIRI) Q1 2019 Earnings Conference Call Transcript

Apr 24, 2019 • 08:00 am ET


Sirius XM Holdings Inc. (NASDAQ:SIRI) Q1 2019 Earnings Conference Call Transcript


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Good morning and welcome to SiriusXM's First Quarter 2019 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'd like to turn the call over to Hooper Stevens, Senior Vice President, Investor Relations. Mr. Stevens, please go ahead.

Hooper Stevens

Thank you, Matt, and good morning, everyone. Welcome to SiriusXM's first quarter 2019 earnings conference call. Today, Jim Meyer, our CEO will be joined by David Frear, our CFO. And 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.

First, I'd like to remind everyone that certain statements made during the call may be forward-looking statements as the terms defined in the Private Securities Litigation Reform Act of 1995. These and all forward-looking statements are based on management's current beliefs and expectations and necessarily depend upon assumptions, data or methods that may be incorrect or imprecise. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For more information about those risks and uncertainties, please view SiriusXM's SEC filings. We advise listeners to not rely unduly on forward-looking statements and disclaim any intent or obligation to update them.

As we begin today, I'd like to remind our listeners that today's results will include discussions about both actual results and pro forma adjusted results. All discussions of pro forma adjusted operating results assume the Pandora transaction closed January 1, 2018 and exclude the effects of stock-based compensation and certain purchase price accounting adjustments.

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

James E. Meyer

Thanks, Hooper. Good morning. I can't think of a more exciting time to be at SiriusXM newly joined with Pandora and forging our own unique path in audio entertainment. I'd like to thank the entire team at SiriusXM and Pandora for working so hard, and so effectively to make our combination a success. We are right where we want to be and moving very fast. We have a new organization and reporting structure to emphasize speed and to bring people together. It's still the first inning, but I'm pleased with the enormous progress we've made so far in streamlining our business, developing new strategies and working so well together.

We are pleased to initiate new pro forma revenue guidance for 2019 of approximately $7.7 billion. Reiterate adjusted EBITDA guidance now pro forma of approximately $2.3 billion and reiterate free cash flow guidance of approximately $1.6 billion, and we are reiterating our existing SiriusXM subscriber guidance. The hunt for Pandora cost synergies is going better than expected. Obviously, it's rolled into the guidance, but at this point, we expect to -- we expect to exit 2019 at an annual run rate of $75 million -- $75 million or more up 50% from our call in February.

I want to emphasize the enormity of our new platform. We