Sirius XM Holdings, Inc Goldman Sachs Communacopia + Technology Conference 2026

Thank you, Steven. Good to be here.

Sure. I guess it starts with the strategy reset we did in late 2024, where we outlined the three priorities you highlighted. Strengthening our subscription business by enhancing our in-car listening experience, growing our ads business, and really leveraging the scale of our portfolio to drive efficiencies and also unlock new monetization opportunities to enhance shareholder value. The good news is these priorities haven't changed. They've remained the same. I think what's changed meaningfully over the past year is just that we now have tangible evidence that the strategy's working, right? I think one of the best places to see that is in our Q2 results. On the subscription side, really solid subscriber performance, growth in ARPU, strong customer satisfaction, very low churn.

We've established a baseline, I think, where we will continue to improve the durability of that subscription business and the number of initiatives underway that will continue to play into that. On the ad side of the business, growth in ad revenue in the second quarter of 5%. As you know, we've launched additional partnerships. We're engaging with other platforms like Apple on the podcast side, Amazon for DSP, and of course, YouTube, which will be launching soon. So we continue to see a strong growth path on the advertising side of the business. We've unlocked efficiencies across the organization. We're on track this year to deliver another $100 million in gross savings, and that all plays into our strong cash flow generation. Last year, we delivered $1.25 billion in free cash flow.

This year, we expect to deliver $1.375 billion, and next year on target to deliver $1.5 billion. So it's all of the operating results that play into that, but also a decline in capital intensity as we lower our capital expenditures for our satellite fleet as we complete that next year. That opens up significant opportunities for capital returns for shareholders. So we'll talk more about that, I'm sure, but we would expect share repurchases to be a bigger portion of use of capital going forward. As you mentioned, on top of all of that, which is a pretty strong investment thesis, we have optionality in our spectrum assets. We'll talk more about that, I'm sure, as well. But that's something that we've always known was going to be an opportunity.

But I think over the last year or two, there's certainly been more attention on the space, and I think that's brought more attention to our assets as well.

We have a really unique business in-car that no one else has, and it's a massive competitive advantage for us. I think maybe the impression has been that this is going to decline really rapidly, maybe like pay TV. But the underlying metrics just don't show that. Our subscribers are incredibly loyal, that we've built in a number of new initiatives to expand access. That's the usual, so we're going to increase penetration rates at the right economics, of course. We have organic increases in our penetration rates on the used car side of the business, and that's a meaningful contribution for us today. We've launched things like our extended-duration plan, which brings new subscribers into the service who might not otherwise have experienced it through our normal conversion funnel. All of those bring more customers into the service.

Beyond that, we're improving the customer experience. Everything from SiriusXM with 360L, which provides a much more personalized experience in the car. For better content, comedy launches, artist channels, continue to increase the content in our unique bundle, and SiriusXM with 360L helps us serve that to customers in a more personalized way, of course. Then better pricing and packaging to open up demand at lower price points, and then also enhanced value to be able to position ourselves for taking price, probably annually, going forward. All of that, I think, improves our economics for the subscription business in a way that gives us confidence in the durability of that business going forward. So we feel really good about the progress we've made and how it's setting us up for the future.

It's really a game changer. We now have access to all of this data on customer engagement, and it's in 20% of self-pay subscribers, and it's in just probably by the end of the year, just over about 60% of our new car sales as well. It just continues to ramp, and the data we're getting back helps us make better decisions about the content portfolio. Who was listening to what? Should we take certain things down and put other things up? We made a decision recently to add local sports to the platform, for instance. It's all about what are we learning about what our subscribers want. Combining the data that we're getting back on listening with obviously the research that we might do as well to make better decisions about what goes into the content portfolio, how we can better personalize the product.

We saw a really strong increase in, or continue to, really, in our personalization features in car, like the personalized artist stations, where you plug in an artist name and it creates a channel for you, as well as our extra channels. It's just a much more advanced, personalized experience, and our subscribers are reacting really positively.