Sirius XM Holdings Inc. (NASDAQ:SIRI) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 08:00 am ET

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Sirius XM Holdings Inc. (NASDAQ:SIRI) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Sirius XM's Second Quarter 2020 Results Conference Call. [Operator Instructions] 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, Senior Vice President, Investor Relations and Finance. Mr. Stevens, please go ahead.

Executive
Hooper Stevens

Thank you, and good morning, everyone. Welcome to Sirius XM's second quarter 2020 earnings conference call. Today, Jim Meyer, our Chief Executive Officer, will be joined by David Frear, our Senior Executive Vice President and Chief Financial Officer. At the conclusion of our prepared remarks, management will be glad to take your questions. Scott Greenstein, our President and Chief Content Officer, will be available as well Jennifer Witz, our President of Sales, Marketing and Operations. Jennifer and Scott will be available for the Q&A portion of the call.

First, I would like to remind everyone that certain statements made during the call might be forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These and all forward-looking statements are based upon 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 Sirius XM'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, I would like to advise our listeners that today's results will include discussions about both actual results and pro forma adjusted results. All discussion of pro forma adjusted operating results assume that the Pandora transaction closed on January 1, 2018 and exclude the effects of stock-based compensation and certain purchase price accounting adjustments.

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

Executive
James E. Meyer

Thanks, Hooper. Good morning, everyone. Sirius XM's second quarter represented extremely resilient performance in one of the most challenging times in our company's history. Our business performed significantly ahead of our expectations during the second quarter with a quick and improving pace month by month, and we are moving aggressively to boost our streaming engagement, execute on long-term goals such as 360L deployments and invest in a growing podcast market.

During the second quarter, despite the effects of stay-at-home orders on the economy, we added about 200,000 more net new subscribers than we did in the first quarter. And while our revenue was down 5% versus last year on lower advertising revenue, our adjusted EBITDA was flat. On our first quarter call, I told you we would continue to generate substantial positive free cash flows, and we did just that in the quarter, generating approximately $0.5 billion in free cash flow, a bit than last year's second quarter.

We are poised for a strong finish to the year, despite the uncertain economic outlook and rising COVID-19 cases in parts of the country. We are resuming our