Greetings. Welcome to SiriusXM's Second Quarter 2024 Earnings Conference Call. Please note, this conference is being recorded. I’ll now turn the conference over to Hooper Stevens, Senior Vice President of Investor Relations and Finance. Mr. Stevens, you may now begin your presentation.

Thank you, and good morning, everyone. Welcome to SiriusXM's second quarter 2024 earnings conference call. Today, we will have prepared remarks from Jennifer Witz, our Chief Executive Officer, and Tom Barry, our Chief Financial Officer. Scott Greenstein, our President and Chief Content Officer, will join Jennifer and Tom to take questions during the Q&A portion of this call. 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 SiriusXM's SEC filings and today's earnings release. We advise listeners to not rely unduly on forward-looking statements and disclaim any intent or obligation to update them. As we begin, I'd like to remind our listeners that today's call 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 over to Jennifer.

Thank you, Hooper, and good morning, all. Thank you for joining us today. SiriusXM's financial position remains robust as we steadily enhance our business and establish a sustainable foundation for growth. We grew adjusted EBITDA 8% sequentially in the second quarter of 2024, and saw our margin improve by a point year-over-year. With these solid margins and declining capital expenditures, we anticipate converting more of this strong EBITDA into growing free cash flow in the coming years. In our subscription business, self-pay net additions saw sequential and year-over-year improvement, largely due to strong retention, and we still expect to see slightly better self-pay net adds this year compared to last. Our advertising business remains a key focus, and we see an opportunity for growth as the year progresses. Assuming all closing conditions are met, we expect to complete our transaction with Liberty Media after the market close on Monday, September 9, and we are reiterating all of our full-year 2024 financial guidance. Our leading content portfolio and differentiated position in the audio industry remain core to our business, and we are leveraging these strengths by focusing on three strategic priorities, enhancing our subscription business, driving advertising growth, and maintaining our financial success through continued optimization across every aspect of our business. We are confident these areas of focus will lead to improvements over the medium to long term. Let's delve into each of these key pillars, starting with our ongoing efforts to enhance our subscription business. To drive demand and retention, we are updating our subscription packages with options for every listener. Our new package structure will feature clear all-in pricing, tiered plans based on interest, a unified offer strategy, and simplified transaction experiences. While these adjustments may cause some short-term impact, we are confident they will be net positive to our customer and our business as we build greater trust, confidence, and interest in our brand and services. Additionally, we recently announced two new subscription bundles. Starting next week, a SiriusXM Podcasts Plus subscription will be available on Apple Podcasts, offering super fans access to benefits such as new episodes ad-free, early releases, and exclusive content from select podcasts and shows, including Smartless. Many of these features will also be available within our core SiriusXM subscription, as we look to further support podcast listening on platform, which has increased since the launch of our revamped app. We are also introducing a new way for automakers to present SiriusXM to their customers, which enables General Motors, Mercedes-Benz, Volkswagen, and more, to include a three-year SiriusXM subscription with the purchase of select new vehicles. These packages highlight SiriusXM's unique position from our expansive podcast network to our strong relationships with automakers and dealers, showcasing the value of SiriusXM to a wide range of listeners. We continue to enhance the overall customer experience in-car and in-app, making it easier to discover and engage with our extensive content offering. We are launching new features and updates to our streaming app each month, and we are seeing positive momentum, with overall user satisfaction on the rise, and strong results from the initial rollout of our improved customer journeys. In-car, where we will have even more opportunity following the start of our broader migration to the new backend tech platform beginning in 2025, we are leveraging the flexibility of 360L, which shows improved conversion and retention rates in vehicles, to launch new features in cars already on the road. This quarter, we introduced SiriusXM free access, our first-ever free ad-supported version of SiriusXM, now available in select vehicles. Free access allows us to engage potential customers who do not immediately convert post-trial with an offering of a limited number of music and talk channels with ads. Although small in scale at the outset, free access is expected to grow in future years, providing us an opportunity to increase trials, win back listeners, and explore the potential for a broader ad-supported tier of SiriusXM. Continuing on the topic of advertising, we saw growth in a variety of categories, including political and pharma, offsetting ongoing headwinds in other industries. Programmatic remains a strong growth channel for us, up 10% overall from the second quarter of 2023, and up nearly 60% in podcasting. With the adoption of the industry identity solution, Unified ID 2.0 with the Trade Desk this quarter, we are unlocking even more programmatic capabilities. This reflects the broader trend towards greater automation and data-driven advertising where we have established a leading position. In podcasting, we continue to sign exclusive monetization agreements with major players, expanding our offering. Recent deals with Dale Earnhardt Jr.'s Dirty Mo, announced this quarter, and Smartless, launching this month, are garnering a great deal of excitement from the ad-buying community. Our depth of content, paired with our technology and expertise, has attracted new spend into the space, with a slew of brands spending over $1 million on our podcast offerings year-to-date. Regarding business optimization, we are focused on driving efficiencies to help us maintain our strong financial position long term, which Tom will discuss in more detail. Moving forward, we see additional opportunities, especially in the strategic use of AI, which continues to deliver strong results in our early rollouts in customer support and self-serve audio advertising creative development. Across each of these initiatives, we are bolstering our business and doubling down on our strengths, which are rooted in our exclusive content offering. In May, we opened a state-of-the-art broadcast studio in Las Vegas, providing a premier venue for live broadcasts and exclusive shows. This quarter, we also launched a full-time Chris Stapleton channel, delivering more to our dedicated country fans, and capitalizing on the massive growth within this genre. Additionally, we announced new channels, podcasts, and shows, from Ted Danson with Woody Harrelson, Andy Richter, actress and activist Yara Shahidi, EDM artist Avicii, comedian Yamaneika Saunders, Mediaite, the National Baseball Hall of Fame and Museum, and more. This wide range of content and perspectives aims to both super-serve our core audience and provide engaging programming for our target growth segment. Additionally, 24/7 live programming offers a platform for subscribers to get up-to-the-minute news and analysis on a variety of topics in ways podcasts cannot match. Our political channels are seeing increased engagement following key moments, such as the presidential debate, from listeners who trust and lean into our coverage from both sides of the aisle, and there's much more to come, as later this month we'll officially welcome Smartless into SiriusXM with an exclusive subscriber event featuring special guest Howard Stern. To conclude, I want to reiterate my confidence in our business, both today and long term, from our industry-leading profitability, strong retention and customer satisfaction rates, to the vast potential ahead. Our business remains uniquely positioned to capture demand and is on a path to future growth. We look forward to sharing more updates with you in the coming months. With that, I will pass it over to Tom to walk you through the financials.

Thank you, Jennifer, and good morning, everyone. Today, I'll provide an overview of our second quarter financial performance, discuss key operational highlights, and share our outlook for the remainder of the year. Jennifer and I will then open the line for Q&A. As Jennifer mentioned, we are pleased to reaffirm all of our full-year financial guidance, and we anticipate the Liberty transaction to close after the market on Monday, September 9. Before we delve into the details, I want to reiterate our strategic focus for the year. Our primary objectives are to continue to invest in our subscription business through enhanced consumer experiences, expand advertising opportunities, and deliver healthy margins and robust cash flow. We are committed to delivering our financial guidance and executing our strategic plan with precision and discipline. With that, let's jump into the financials. In the second quarter, SiriusXM reported consolidated revenue of $2.18 billion, a decrease of 3% compared to the same period last year, primarily driven by a 5% drop in SiriusXM subscriber revenue, which totaled $1.52 billion. Self-pay subscribers declined by 100,000 this quarter, reflecting an improvement compared to the same quarter last year, and we remain optimistic that full-year 2024 will see a slight improvement compared to 2023. The progress during the second quarter was primarily due to a reduction in voluntary churn. Paid promotional subscribers during the quarter decreased by 73,000, as some automakers shifted from paid promotional subscriptions to unpaid. Moving on to advertising revenue, total ad revenue in the quarter remained flat year-over-year at $443 million. Our advertising business remains a strategic focus area as we leverage advanced technologies to drive market-leading solutions to capitalize on our unique content and distribution channels. Despite some softness in total revenue, our overall financial performance remains resilient. Adjusted EBITDA for the quarter remained flat year-over-year at $702 million, and increased by 8% from the first quarter of 2024. This stability was achieved through effective cost management, including lower cost of services, personnel-related costs, and general and administrative expenses. These savings offset the impact of lower subscriber revenue and higher sales and marketing costs, resulting in an adjusted EBITDA margin of 32%. Our strategic optimization efforts yielded approximately $50 million in savings in the second quarter, as we work toward our full-year target of approximately $200 million. These savings resulted primarily from workforce streamlining and company-wide cost optimization initiatives. The majority of these savings will be reinvested into the business to maintain our EBITDA margin and support ongoing transformation initiatives. Let's dive deeper into the performance of our segments. Starting with the SiriusXM segment, total revenue for the quarter was $1.64 billion. This includes subscriber revenue, which declined 5%, advertising revenue, which dropped 4%, and the equipment revenue, which stayed flat compared to the same period last year. Our total ARPU decreased by $0.42, bringing it to $15.24 versus $15.66 last year. This dip is due to more subscribers on promotional rates and streaming-only self-pay plans. Our primary goal is long-term revenue growth, and we have always sought to balance rate and volume. And by continuously enhancing the value of our subscription packages in every aspect of the consumer experience, we have typically been able to sustain modest price increases every other year. We currently don't expect a change to that historical cadence, but we are also differentiating our packages with a variety of price points and offerings, as Jennifer discussed. Gross profit in the SiriusXM segment reached $986 million, a 6% decline from the previous year. This brought our margin down to 60%, a one percentage point drop. Subscriber acquisition costs remained essentially flat at $92 million, compared to $93 million in the same period last year. Shifting to the Pandora and off-platform segment, we saw total revenue increase by 2% to $538 million, an increase of approximately 9% from the first quarter of 2024. This growth was driven by an 8% year-over-year increase in subscriber revenue tied to rate increases on our Pandora premium and plus subscriptions. Advertising revenue in this segment remained flat at $400 million year-over-year. Pandora ad hours totaled 2.6 billion, a 5% decline year-over-year, while the average monthly listening hours per ad-supported user remained stable year-over-year at 21.7 hours. Gross profit in the Pandora and off-platform segment was $180 million, an increase of 18% year-over-year, reflecting a gross margin of 33%. The increase was driven by the higher revenue, coupled with a roughly 5% drop in total cost of services. Looking more broadly across the business, we remain dedicated to our transformation efforts, optimizing our cost structure, making strategic investments in our product and content, and leveraging technology and automation to enhance our interaction with listeners and streamline our business processes. These initiatives are already yielding positive results. We have successfully reduced expenses across various departments, while simultaneously improving the customer experience. In addition, in the second half of 2024, we'll be opening a European tech hub, allowing us to continue our technology and product investments in a tax-efficient manner. We generated $343 million of free cash flow during the quarter, up 6% from the second quarter of 2023. The increase was mainly due to lower cash taxes paid, resulting from the benefits of our tax equity investments and the timing of other payments, partially offset by higher capital expenditures and lower cash receipts. During the second quarter, SiriusXM paid $103 million to stockholders through our dividend, and ended the quarter with net debt to adjusted EBITDA of 3.2x. Following the Liberty transaction, we plan to delever back to our long-term leverage target in the low to mid 3x adjusted EBITDA, while still evaluating additional opportunities to return capital to shareholders efficiently. With that, I'll turn it over to the operator for Q&A.

Our first question comes from Steven Cahall with Wells Fargo. Please go ahead with your question.

Thank you. A couple of related questions, maybe just first on conversion. Could you just dig a little deeper into what you're seeing in the conversion rates, Jennifer? It seems like that's really kind of the north star of the company right now to get net adds back on track. So, can you dig a little deeper into what you're seeing in new car conversion? Have you seen any change in the way different age cohorts are reacting to the new technologies, streaming applications, etcetera, and where do you expect new car conversion to go over the next couple of years? And then also on the ARPU side of things, what can we expect from SiriusXM really subscription ARPU? Do you feel like you have any pricing power at this point? Churn has remained low, but I know you're trying to drive that conversion piece as well, so would love to just help on how we can think about ARPU for the medium term. Thank you.

Sure. Thanks, Steven. Our conversion rates continue to be challenged, but we have seen some stabilization among our first-time trialers, which do tend to be younger. And as they come into the funnel, we have been able to influence early engagement through some behavior-based marketing journeys we put in place, largely in 360L earlier this year. So, a lot of that was manual, and we are eager to ramp up more personalized journeys for our customers across our in-car trialers over the course of the rest of the year. As you know, 360L is trending at about 40% of our new car trial starts, and we're seeing the real benefit of that coming through in these rich listening data sets. But we are just starting to roll out these truly personalized one-to-one journeys for the in-car trialers this month. And it's starting with slow volumes, small volumes, but it'll ramp over the course of the year, and we'd expect to have the vast majority of our trialers on these personalized marketing journeys as we exit the year and go into next year. So, like I said, positive results with younger first-time trialers, seeing listening rates improve early in trial and translating through to improved conversion rates post-trial. And as you said, that's really the opportunity to unlock, to put us on a path to growth. As you know, we do something about 20 to 25 million trial starts a year on the in-car side of the business. And so, it doesn't take much. Point of conversion is 200,000 to 250,000 subs. So, we are very focused on leveraging the learnings that we're getting from streaming and bringing them over to the in-car side of the business as well. And then just shifting to ARPU, really, this is all about creating value across our subscription packages, and bringing enhanced value through more exclusive content, improving the discovery features we have in place so consumers can better find it, and improving the control features we have in place so consumers can better navigate it. So, we are continuing to provide enhanced value to our subscription packages in a way that we believe will continue to support future rate increases. As Tom mentioned, we are planning to stay on the every other year cadence for rate increases going forward, but we're also taking steps to capture demand across a broader set of audiences. So, we are confident that this will set us up— the combination of these two areas of focus will set us up to drive overall revenue growth in the long term.

Thank you.

The next question is from the line of Jessica Reif Ehrlich with Bank of America Securities. Please proceed with your questions.

Thanks. Two topics. First, on advertising, you mentioned several times, both of you, that that's a big opportunity for growth. Just wondering if you could talk a little bit about the drivers. What gives you confidence second half will pick up? What are you seeing in the market? And then talk about some of the new tools like programmatic. Does that really tap into a new pool of advertisers? And then the second question, all three pillars of growth, subscribers, advertising, financial, they seem to depend on content. So, maybe you could talk about, you have multiple levers, whether it's podcasting live, different genres. Where do you see the most opportunity to really make a difference?

Okay, I'll take the first one. So, we are expecting to see improvements in ad revenue in the second half. There is some uncertainty clearly tied to the general concern among brands about consumer personal spending. We did even see some recent cancellations, and obviously we're watching the tone of the earnings calls really carefully, but I think—and Tom can talk a little bit about categories—but in podcasting, we continue to see strong demand that has translated into higher sell-through despite the iOS 17 changes to downloads. And as you know, there's a lot of supply out there given the trends with the Supply-side platforms, but we believe an audio buy is complimentary and appeals to many brands as audio is available to consumers in places, obviously that video is not. And so, I'm very pleased with our position in podcasting and programmatic, as we're capitalizing on these broader industry trends where advertisers are eager to self-serve and use better targeting and measurement tools to action their plans. And especially in a time of general uncertainty, programmatic just provides much more scaled opportunities to come into the market for advertisers, especially late in the quarter as budgets free up. So, we continue to leverage the tools that we have, AI-driven synthetic voices and measurement targeting tools. Just did the relationship with Trade Desk on UID 2.0. So, we are very invested in the space, and I think there'll be more opportunities to come. Do you want to comment just on categories?

Yes, I mean, I would say, looking across the podcasting side, we're seeing a higher network demand, which has benefited us to date, and we see that continuing. Higher tech fees continue to grow as we look out in the remainder of the year. And programmatic, as Jennifer said in her script, is growing 10% in the second quarter. I would also say, as we look into the back half of the year, we will see political ads that will start playing in as we get in the next few months. And we also look to see the benefit of a reorganization of our sales organization that we did in Q1, starting to settle down, and we see the back half of the year that will get benefited from the realignment.

Great. Jessica, on the—where I see the most growth is in two areas. One, obviously, is in podcasting. As you have heard me mention before, our belief in that original principles of the Howard model of where is there a large free audience that ultimately is passionate enough to go behind the paywall and be something that can grow and really accelerate our talk business. That model works then, and now it's morphed into a different version with podcasting. As you know, we have three of the top 10 podcasts in Crime Junkie, Dateline, and now Smartless, and always looking at others. And with that, we're constantly testing on one side, where will people pay for that and come out of the free area like we are with the new podcast plus with Apple, as well as getting exclusive content out of those relationships behind the paywall. Ultimately, we're going to keep testing and fine-tuning, and that data will ultimately lead us somewhere down the road to a decision to see what will go behind the paywall and reignite that model, and I'm confident that will happen. The other place is live. When you look at how things move in culture and pop culture, politics, whether it's podcasting or virtually any of our competitors, there's no live component. So, when there's anything from a debate, an assassination attempt, a movie to promote, or anything that becomes timely or tied to a date, we're able to do it in virtually any manner we can do. And lastly, as you've seen recently with the NBA and others, dispersion of live sports rights are all over the place in video, and we have a firm grip on all live sports and audio under one roof. So, the combination of those two areas, I feel pretty optimistic there'll be content growth tied to subscriber growth in the future.

Thank you. Our next question is from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your questions.

Okay. Thank you for taking the question. I was curious about the discussion about new packages coming and if there's a way to give us a little bit better sense of how we're going to feel that hit the P&L and when we'll kind of feel that hit the P&L. I understand that there's some details to come, but is this going to drive and maybe a decrease in ARPU or an increase, and does it kind of slowly filter in as you roll these out, or is it kind of a big bang? So, a little bit more color would be helpful.

Sure. So, with the pricing and packaging efforts we're undertaking, we're really trying to solve for three things simultaneously, which is why we've been so deliberate about the testing we're doing here. We want to drive more demand because we know that our premium prices have been a barrier to bringing in some new audiences into our products. We want to make sure that we're preserving our full-price base and opportunities to drive rate increases there in the future. And we want to create opportunities to reduce our reliance on promotional plans used in acquisition and retention. So, we've been— as you know, we launched with streaming at $9.99 late last year, and we think that we're confident we'll attract a different audience and incremental to what we're doing in the car. And on the in-car side of the business, the early results in our testing have been encouraging. It shows that we're getting consumers into the right packages for them. We've built a $9.99 music-only package with add-ons for talk, news, and sports. In our testing, we're seeing better longer-term retention on full-price plans after the post-trial offer period expires. So, we believe that alongside the recent move to all-in pricing, these actions are ultimately providing more value and more transparency for consumers across our packages. So, there will be impacts on our metrics as we start to roll this out later in the year. We have everything captured in guidance and just the general trajectory we've talked about on self-pay net adds, and as we start to roll this out, we'll have more to share in terms of the impacts going forward.

Okay. And then if I could just ask one other quick follow-up. You guys are reiterating guidance for an improvement in paid net add trend this year versus last year. I just want to understand, is improvement less negative or positive or TBD?

Yes, I mean, improvement is less negative, and we expect that to be true for the full year. We had a very strong quarter in the second quarter, and I think we are being a little cautious, given the outlook on new and used car sales. In the second quarter, there was some disruption because of the CDK issues, but there's certainly some concern among third-party analysts and commentary generally about consumer softness and demand for new and used cars. So, our trial funnel, obviously, is a big portion of our subscriber net adds. So, that uncertainty plays into our commentary. And then I'd say on the other side, we've had really strong performance in churn. In the second quarter we were at 1.5%, rounding, but it was slightly better than last year. And that's a function of fewer customers calling to cancel. So, we feel really good about our retention and the loyalty among our subscribers and interest in our content offering. We see definitely improvements in overall retention associated with in-car customers streaming more and exploring more of our content, and very high satisfaction there.

Okay, thank you.

Our next question is from the line of Stephen Laszczyk with Goldman Sachs. Please proceed with your questions.

Great. Good morning. Two, if I could. First, Jennifer, you called out some of the positive momentum you're seeing on the new streaming experience. Could you maybe talk a little bit more about some of the positive proof points you saw in the second quarter, and then maybe your goals around scaling that strategy into the back half of the year and into 2025? And then for Tom, on profitability, could you unpack some of the drivers of the nice cost performance in the quarter? G&A looked like it was down a good deal year-over-year. Is there anything aside from the cost efficiency plan that we should keep in mind as we model the cost structure going forward? Thank you.

Yes, thanks, Stephen. So, on streaming, I want to take a step back and just talk about the overall objective. We're building a next-generation streaming platform, which is incredibly important to the future of our business, and that is because it supports 360L, supports our streaming-only implementations in-car, and our millions of in-car subscribers who stream. And of course, there is a cohort of listeners that want to experience our service through the mobile app or in-home connected devices, and we're building better capabilities for them too. Ultimately, we want customers to be able to listen on the device of their choice. So, we are repositioning our business for the future. And yes, we're not ramping as quickly as we thought in streaming only, but we are implementing a lot of changes, and what we're seeing does give us confidence in the future of our offering. We're seeing our streaming and 360L customers exploring a broader set of our content, in part because of the personalized product features, which helps with content discovery. So, our streaming metrics are getting better quarter-over-quarter. We're iterating with personalized marketing journeys there now, and we're going to leverage these journeys and these learnings as we're just starting to ramp up, as I mentioned earlier, the multi-channel marketing for in-car trialers, and expect to have much more of that in place by the end of the year. So, this is the key, right? If we can scale the learnings we have on the streaming side to the in-car side of the business, then we get a significant impact on future growth. And just as it relates to metrics specifically, what we're watching are the early in-trial engagement metrics, whether it's days listening or percentage of people listening or the breadth of the content and the hours they're listening, as these are the predictors of improving post-trial conversion for both streaming and the in-car side of the business.

Yes, and so—thanks, Stephen. So, if you look at the cost, a lot of it's our cost optimization, as you noted. And I think our program approached $50 million worth of savings in Q2. A lot of the initiatives that we're working on touch across a lot of the areas. As you saw, I think customer service and billing is favorable because of some initiatives we did there. G&A is favorable, and R&D is favorable. When you look across all of them, there is one portion of it, which is the human capital favorability as far as some optimization that we've done in the structure and the team. Some of it is just along the lines of the sales force realignment that we've talked about on the ad sales side. So, we have a bunch of different initiatives that we're working on. Some are in earlier phases, and some of them are—as you look at it, some of our initiatives are a little bit delayed. And so, some of the savings will continue onward. We expect it for right now, but the reality is, I think all of the projects that we are embarking on have been successful to date. We're continuing to work against that.

Our next questions come from the line of Jim Goss with Barrington Research. Please proceed with your question.

Thanks. In terms of the free ad-supported plans you're trying to roll out, are these going to be totally separate channels, or are they going to be based on some of the existing streamed content or the content that involves hosts? And what sort of cannibalization risk do you perceive if you have such plans available and the existing subscribers look to tap into them?

Sure. I don't expect a lot of cannibalization because it's a reduced content set. So, we have, I believe, about 40 channels. They are existing channels that we have on the service with ads inserted. And right now, it's pretty low volumes, but it's a great way for us to better understand what kind of demand we might see for the free service. It's also really important for us to be able to maintain the activation of that radio so that customers post-trial, if they choose not to convert, are still able to experience SiriusXM content for some time, and we have an opportunity to continue to try to upsell them with ads in place. So, we couldn't have launched this without 360L. It is critical to be able to provide the capabilities on both the ad side and the flexibility in terms of providing a different channel set, and we have the opportunity to adjust. To the extent that we thought there was going to be cannibalization, then we could reduce the channel set or we could increase the ad load. Over time—we're launching with broadcast ads to start, but over time we'll be able to replace those ads with more targeted IP-delivered ads because of the 360L platform. So, a lot of the learnings we're going to get here, I think are going to help us better determine what does free look like in the car. And you should expect us to look at opportunities to extend some of this to our streaming products as well. And we're going to get started with some limited content sampling functionality on our site, and then eventually in the app as well to remove some of the friction. This is all about getting broader audiences exposure to SiriusXM content, with an opportunity ultimately to get them into our subscription packages.

Okay. And maybe a follow-up, do you think this will give you a lot greater benefit in terms of the ad sales and the core SiriusXM service that where your advertising has been a lot more on the Pandora side? Do you think that'll be a significantly greater revenue category for you?

I think over time, yes, it's going to be years as we build out the volume in 360L in-car with the free access package. But even broader than that, given IP-targeted ads, we're going to be able to leverage those in the core service, not just in free, but in paid subscriptions where we do have ads on the non-music side of the business. And so, we think over time, as we introduce that ad replacement technology, we'll be able to improve with better targeting, higher CPMs, and ultimately improved ad revenue.

So, maybe one last one, international sales opportunity with—since you can do programming without satellites, is that going to be a significant component of your business?

We have some international advertising sales today through third parties; the broader opportunity in terms of SiriusXM distribution outside of the US and Canada. We have a limited opportunity, I think with the Apple Podcast Plus subscription. That'll be global. I think if we were to explore something international, it likely would be with a partner, perhaps one of our OEMs. We have really strong relationships there, as you know, and there could be a way for us to launch a streaming service in another part of the world in conjunction with an OEM.

All right. Thanks very much. Thank you.

This will conclude today's conference. You may disconnect your lines at this time, and we thank you for your participation.