Sirius XM (SIRI) 1 Aug 242024 Q2 Earnings call transcript

Greetings. Welcome to SiriusXM's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] 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.

morning, good and you, everyone. Thank Second Welcome Earnings Call. XXXX to SiriusXM's Conference Quarter in President join Jennifer remarks will Witz, Barry, Chief Greenstein, questions we have from and take our Content our will Scott of Litigation Officer; Today, as would made Q&A like and Tom Act call the prepared your Financial Tom during the during everyone is be remind Securities portion Officer; might the Jennifer and Officer, statements the to Chief of Executive our XXXX. the call. I forward-looking Reform term defined statements to Private that Chief certain These are and methods forward-looking are to that uncertainties subject or or actual that necessarily and current based upon incorrect all risks and to and expectations beliefs data cause differ statements materially. upon could may statements assumptions, results forward-looking depend be management's imprecise. Such

and disclaim those listeners We view For and statements rely risks SEC information not to obligation release. to uncertainties, more earnings and advise them. update filings any or please intent forward-looking today's on about SiriusXM's unduly

of hand I'd As to adjusted include and compensation. With remind will that call actual today's both the about I'll over discussions results. to we exclude effects results All that, discussions adjusted like operating the our of call listeners begin, stock-based Jennifer. results

Hooper, our X% adjusted SiriusXM's XXXX year-over-year. margin of and you, establish grew sustainable the for financial good a saw we We you and enhance in X today. Thank EBITDA business our improve morning for second point position us and as joining Thank all. steadily remains robust sequentially foundation by quarter growth.

we free our saw improvement expect net business, sequential to year the slightly more self-pay adds expenditures, capital the self-pay net and this to coming With see year-over-year to still strong years. In and we Subscription these declining compared in margins EBITDA and due retention, growing last. into flow converting strong better of cash largely a additions anticipate solid

year the an we remains as for key opportunity focus, growth progresses. business a and Advertising see Our

Assuming transaction Monday, we after expect to financial full reiterating met, our close all on X, XXXX closing September we our complete Media are Liberty year market of guidance. with and conditions are the all

portfolio focusing these differentiated strategic remained business. And of X growth industry audio our priorities: our by advertising across leveraging strengths financial we optimization business, enhancing Our position aspect maintaining in and business. on every are core and through driving success leading content the our our continued to subscription

confident term. these long are lead improvements of the We areas will medium focus to over to

are starting ongoing and delve to Let's demand into pillars, listener. of subscription To packages with for enhance options drive key retention, these updating we efforts with our Subscription our business. each our every

unified all-in transaction new based structure strategy Our experiences. on plans simplified clear interest, package will a offer tiered feature pricing, and

are interest While business and build and may we we these they our will cause brand impact, services. as adjustments confident to our positive our in customers some net confidence trust, greater and be short-term

Additionally, subscription a releases, also episodes we will be available will the within our fans from recently SiriusXM revamped of further subscription listening launch we access super benefits new bundles, starting next week, and on ad-free, Apple announced content X offering new subscription as exclusive early to podcast, such be to which and podcasts as available platform, look SmartLess. Many since features podcast app. increased core shows, these on including has our select of SiriusXM Podcast+ support

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and experience easier our discover content to and customer overall offering. in the enhance to engage extensive app, with it continue in We car making

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scale of podcasting. expected opportunity an a saw in in strong win in future headwinds for including the growth explore channel at potential back we broader in ad-supported the variety the trials, is of other years, ongoing Although SiriusXM. Continuing of remains free and the a growth advertising, and to of to topic political increase us XXXX grow on nearly tier us, access outset, up offsetting small and quarter providing industries. Programmatic a categories, in XX% up XX% from pharma, second overall listeners for

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offerings a the attracted new million depth with into expertise on space our content, paired Our year-to-date. over of and brands our podcast $X technology with spending slew of has spend

to Regarding long maintain are term, more help financial us Tom discuss strong business position focused in our driving we optimization, on efficiencies which will detail.

opportunities, are state-of-the-art broadcast early we Vegas, audio on strong we a opened Las May, business in for AI, live a our content venue exclusive shows. premier of support doubling studio in and our Across and see Moving rooted which offering. In bolstering our in providing development. continues each to are these we initiatives, of our which advertising forward, broadcast exclusive strengths, customer down in deliver in and use additional strategic results the rollouts especially self-serve creative

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of engaging shows the target for Museum our Danson, aims EDM podcasts announced Additionally, Harrelson; and comedian, with and channels, we to This Hall growth Yamaneika Shahidi; Baseball our from Andy and Avicii; both Woody wide and Yara i, super Artist, Ted new programming Fame core provide and perspectives Richter; of Saunders; actress Media activist, audience more. serve range content and National segment.

and subscribers topics of up-to-the-minute cannot offers a news a ways variety to get analysis for on Additionally, our XX/X programming live in podcast platform match.

into SmartLess trust business lean with ahead. an customer long Our month, engagement special today debate from retention term event reiterate from officially into our such seeing guest welcome coverage and satisfaction I potential strong moments SiriusXM increased later of confidence key profitability, come our conclude, we'll and featuring political in industry-leading exclusive the Howard sides our to both Stern. To as to channels both vast the the presidential to subscriber and my this want rates listeners and following who there's aisle, more from are much as

to I positioned growth. to the updates look path to in uniquely walk pass to demand sharing Tom you more to We financials. on forward will months. With capture future you it Our the business and over with through that, remains is a coming

open everyone. then and good and performance, Today, and Jennifer Thank of discuss our you, the the will year. for provide second Jennifer, key the our highlights I will I outlook quarter Q&A. overview for of morning, an operational financial share remainder line

financial year close Jennifer pleased our and the after As anticipate transaction to Monday, we mentioned, all full Liberty are on September guidance, X. of we market reaffirm to

reiterate into delve focus the we I our for want year. Before the strategic details, to

continue objectives experiences, enhanced margins opportunities cash through to are flow. to robust and consumer Subscription deliver in Our our and invest expand advertising healthy primary business

precision improvement in full guidance shifted financial that, X% promotional Paid subscribers reported XXXX. The same a remain during to revenue, a an by was we to reflecting progress and primarily compared the second quarter discipline. With churn. committed to are and the quarter billion. Self-pay that compared year quarter, compared due into and XXXX subscriber with financials. In totaled during declined to $X.XX improvement We $X.XX quarter of X% slight second year, see last of driven decreased voluntary delivering drop this to revenue strategic the promotional will subscriptions quarter, optimistic automakers year last in unpaid. XXX,XXX decrease primarily by billion, some to the subscribers the same a SiriusXM as plan by from reduction our a period jump paid SiriusXM XX,XXX which let's executing consolidated the our

at in Moving Total revenue quarter on Advertising million. the revenue. $XXX to remained flat year-over-year Ad

by to capitalize for channels. Despite quarter flat in our our performance $XXX strategic effective an of leverage and a Our through increase adjusted overall costs revenue advanced of in to we content XX%. services, technologies impact resilient. drive resulting general and and revenue, the solutions area marketing focus at was some savings lower the management, offset advertising as X% market-leading achieved EBITDA expenses. million, year-over-year Adjusted first remains remains distribution unique lower softness margin EBITDA total XXXX. This administrative financial remained personnel-related cost quarter and the business on costs, of an stability from cost and of including subscriber higher These sales

These full savings and second quarter of EBITDA initiatives. primarily resulted savings these margin year reinvested million in from initiatives. toward streamlining optimization company-wide the business maintain approximately transformation million. the strategic yielded be work to efforts and $XX Our cost will in ongoing of $XXX majority savings our The we support optimization into target our workforce approximately as

of the SiriusXM dropped revenue, deeper billion. to last same flat quarter revenue, which This segments. subscriber compared for revenue, our X% $X.XX performance which into dive declined total the advertising Starting the period the X%; stayed which was year. revenue Let's includes and the equipment with segment,

and last self-pay total Our on to subscribers to is dip by year. more it decreased bringing $XX.XX promotional rates This versus ARPU plans. streaming-only $XX.XX due $X.XX,

the remained and monthly points services. X% X% margin year. XX%. user a profit XX.X while costs with the have higher first flat to quarter brought a in sustain million, Off-platform typically XXXX. price was segment an able Our Plus $XXX billion, totaled historical we hours the Jennifer of price increases decline year. million long-term and every but on tied stable $XX aspect of year-over-year and with offerings, change is to sought from revenue drop. segment year-over-year, $XXX the are X% of the a Pandora increase total Subscriber year-over-year subscriber previous down percentage drop revenue, X X% growth, we a million, driven expect goal We our million value our This to ad-supported We Pandora experience, also This the increase the $XXX growth to to year-over-year our SiriusXM packages of X% we by of of was listening this Pandora XX% the at subscription flat an reached don't total other a Premium segment. essentially Off-platform to in at volume. segment Pandora enhancing a a to differentiating to increases X% of balance saw decline last remained And the revenue profit cadence, remained and of ad modest was $XX margin packages every year-over-year. million, primary The cost as and per always continuously from by period hours in million in at in increase rate and point in increase rate year. Shifting variety $X.X average $XXX approximately our roughly that driven compared by revenue in by XX%, revenue have acquisition been subscriptions. Advertising currently discussed. Gross to reflecting consumer coupled an same gross increase hours. Gross

and the Looking in more cost efforts, listeners to streamline investments enhance across and our and already structure, our dedicated yielding automation our positive remain our product leveraging making to results. technology and are with content business, broadly business optimizing processes. These interaction strategic transformation we our initiatives

departments while simultaneously the have various experience. successfully expenses reduced customer across improving We

hub tech tax-efficient XXXX. The the higher in manner. the we'll $XXX of XXXX, by our in investments tax of to due quarter offset taxes cash cash European a during million opening partially addition, We resulting up and cash quarter, our half continue payments, from In us the flow investments be mainly from and technology to lower the receipts. expenditures allowing of generated and second of product lower free X% was paid of second benefits timing capital equity the other increase a

of During SiriusXM X.Xx. debt quarter stockholders the second EBITDA $XXX and to quarter, dividend through paid ended million with adjusted our to net the

our shareholders to it long-term to Liberty turn we for target the delever still leverage evaluating to Following opportunities in the EBITDA, return operator to over additional capital efficiently. With that, plan low to adjusted to transaction, mid-Xx I'll back the Q&A. while

comes [Operator question with Wells Instructions] line Our Cahall the first of Fargo. Steven from

first seems net like of of deeper the a into A you adds on now dig company what little as conversion the couple related questions. seeing Jennifer? Maybe back It you're Could in just that's get star conversion. north track. rates, to kind a really on just right

Do dig conversion. streaming to you're car conversion applications, And Have in over feel So are power this into ARPU? ARPU what to you remained as I trying well. the little couple SiriusXM, in where that car what piece side of different the of a deeper have also then can any conversion cohorts pricing the any we go way technologies, can to low, drive you new expect from but expect you point? the seeing subscription you cetera? et do Churn has know like at age things, seen new new really reacting years? And next you you're change on

So how we think I love term. ARPU on help for medium would the about can just to

Sure. Thanks, Steven.

first-time challenged, in earlier be some early the put among to we been able seen stabilization marketing younger. be And do through our year. tend continue XXXL as they influence to to have which but into have we behavior-based largely trialers, this rates conversion come Our we journeys in place engagement funnel, some

over journeys the up and our the our lot eager rest across trialers manual year. a are more of of So in-car personalized the to was course that customers we ramp of for

trialers data know, you on the for our starts at but next we're are we small XXXL and car year. the but truly listening As and journeys majority sets, our this of year that XX% new of month. And starting marketing the seeing of it of is and it's the to coming through volumes, about in-car course over we benefit starting trending these slow volumes, personalized roll one-to-one trial as expect trialers ramp just out into with real vast the exit in to personalized will these journeys -- in the we'd year, have go rich these

put growth. younger path trial opportunity trialers, really as on seeing, rates a I in results to unlock rates like said, improved first-time positive through So trial. translating with you And post conversion the listening and improve to early that's to us said, to

XX in-car do side we know, you As million, business. start the trial a something the year about on of XX million

so doesn't to And take is much. conversion it Point XXX,XXX of XXX,XXX subs.

content, And so we can exclusive subscription find bringing it. in consumers the our them better in-car So all ARPU. place, place, through packages, features in have bringing control this to we improving just that are getting learnings about and across creating right? very shifting we're so streaming focused the Really, to value better side we on improving features the business then over the it leverage of more enhanced well. And can is from consumers as the navigate and discovery value have

a to that So to will enhanced we rate increases. provide support subscription future our in packages continue believe value way continuing we to are

we mentioned, we're demand are year on the every broader across set audiences. going also Tom cadence increases forward. other stay for of steps As capture to to rate But taking planning a

long term. So in overall us confident us this combination of drive focus revenue up. we of to these the are set set two up that will growth areas The will

America line Securities. question next Our Reif Bank Ehrlich is Jessica with of from the of

Two topics.

you've that's advertising, opportunity growth. on of you First, both mentioned that, big for a times, several

of about half What you the you in confidence will then on they some programmatic, Just of advertising, the all market? talk you a are pick advertisers? And And question, bit like then does into a subscribers, depend the of tools growth, gives really drivers. to about if tap talk new pillars little financial, What up? wondering second could second seem X new pool that the content. seeing

could a to So really most about different have opportunity where it's maybe the podcasting make talk -- levers, whether you do see multiple live, you genres, difference? you

one. Okay. the I'll first take

spending. So the brands really even in bit and see did little second tone recent see talk about can Tom the We uncertainty think is audio has available despite consumer among in I obviously, And the that audio in to obviously, clearly to the the strong we of is download earnings sell-through higher revenue and in general trends to SVODs, categories. we know, cancellations. half. a we're continue believe are we watching some of to not. There consumers ad podcasting, -- the calls concern to about personal some expecting given appeals is there's tied see improvements there in carefully. But demand XX into the translated brands video places, out changes a is complementary to with that as but as lot you iOS buy many and supply But

with a we're of and industry self-serve market these tools better just broader to very in budgets in their and And more as are plans to so capitalizing into to programmatic up. late eager in programmatic general as come and measurement provides advertisers I'm much use our where opportunities pleased advertisers trends on especially scaled position podcasting and and action especially for the free the quarter uncertainty, time targeting

Trade continue we we have, the X.X. leverage voices tools, AI-driven, just measurement tools So relationship synthetic on and to targeting Desk UID the with that

on to the you there'll we think be opportunities categories? want space, and are invested very more come. comment So I in Do just to

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

Scott?

the and on One, the podcasting. is Jessica, growth, in areas. -- see obviously, two I it's in most where

Podcast+ keep And lead and that with pay reignite see road behind decision Apple paywall. And really model and we're those of the to somewhere podcasting, And and and business, relationships out know, mention paywall different the always a, the original us it's where on ultimately, now As will that there you a is one Howard behind in and -- that the free works to X model, that audience we're people going in of principles of morphed looking can belief others. go side, Dateline at come content is passionate original the go ultimately to heard where well accelerate I'm before, have talk exclusive to getting model of that constantly that, as XX will grow down the are we you the paywall ultimately Junkie, something that will testing me into out testing we confident as enough like will that then. that SmartLess podcasts Crime behind for the our fine-tuning and free have large the new data and, b, with what happen. and area, with a now version. With as top of our and

at component. things pop culture virtually podcasting live any in look there's The our how is of move no When culture live. and whether other it's politics, competitors, place or you

attempt, any becomes anything movie or to do. And to able do So we're debate anything we manner that on when a a it assassination can virtually to date, tied and or lastly, timely roof. NBA promote recently a others, seen over from the And of place a sports rights with all the on are live live dispersion you've the one sports in all grip under we and have video. as and firm audio there's

of There growth subscriber areas, tied feel will content be So growth the to X optimistic. combination I in pretty future. the those

of line Crockett from next Our Barton question Rosenblat the with is Securities.

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

Sure.

to rate to into base and make bringing demand We we're in and for the is pricing barrier in full why about to plans the a that in X our reduce things our we've opportunities been reliance want more products. We audiences on we're want doing acquisition packaging opportunities we're our preserving prices retention. with have there testing we to we used we're really undertaking, efforts want so and know drive some our solve price simultaneously, deliberate increases drive trying create to sure here. which So And new to the to been that future. premium because promotional

And shows we're we're have doing last different So early testing we've in-car with our after them. sports. the know, that as right for streaming And price to trial period getting are been incremental the music-only at longer-term top $X.XX side attract late of been testing, add-ons built and in We've in consumers And packages we seeing on news a for and offer results into what full better we're audience the our year. first a will in encouraging. It confident retention $X.XX with car. expires. business, you we the that the package launched -- plans

alongside these are believe ultimately pricing, for more and value the to providing our packages. recent transparency move actions we across more all-in that So consumers

start our impacts be the this year. So there later roll out in metrics on to we as will

more we'll on roll self-pay captured talked in everything terms share to the net of have We start we forward. out, we've adds. have as and just about impacts this guidance in going to trajectory the And general

Okay. then just other could follow-up. I ask quick if one And

improvement year improvement year. to or guidance want reiterating for paid add positive last net are or just guys trends You an negative versus I less in this TBD? understand, is

Yes. the And cautious very little for had second And We a I I a we less to that quarter. are full be being given outlook is quarter the the strong mean improvement expect we negative. true year. in think on new sales. In car and there's and used softness the used disruption quarter, analysts was among and for consumer generally second demand the some But some commentary certainly new issues. CDK there about and third-party concern of because cars.

So of obviously, big is our net adds. funnel trial a portion our subscriber

So rounding, that customers then than side, our it plays function -- slightly strong commentary. to cancel. And And a calling had but we that's into better the performance I'd second it fewer say really churn. In year. of last was the had we've X.X%, other uncertainty on in quarter,

So of satisfaction our right, exploring we among streaming retention in in-car see overall our about feel content subscribers and definitely loyalty more, and good customers high really content and with the interest very though. more our retention our associated in improvements we and offering. And

Our next line Sachs. the from question is Goldman Laszczyk with of Stephen

if could. Two, I

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

Thanks, Stephen. Yes.

we're So important I the want a and is streaming-only And back listeners their on be streaming, capabilities cohort customers of course, it because platform, our want supports of want implementations, talk which device our listen of a devices, overall step supports future the able of who them, choice. business. to objective. to or the just We're take experience too. Ultimately, is that stream. And that next-generation for subscribers a to millions is XXXL, through to better and our in-home of incredibly in-car to we our streaming and mobile in-car connected about service app on there building building the

So our we we features, We're streaming-only. the implementing we're our as a quickly the content future are personalized we're of because XXXL of changes. And in helps discovery. we offering. what yes, lot in us are product streaming confidence our part seeing repositioning future. of content seeing in the for does And a not our broader business with and thought give ramping as customers which exploring set of but

as So to our much We're year. and the of are learnings more trialers in marketing just of and with streaming in-car starting that metrics have the by getting and personalized ramp we're the leverage expect place now, multichannel as there journeys iterating marketing journeys earlier, these to these better quarter-over-quarter. to going for end we're up, I mentioned

this are as streaming the the listening it early of business, on the you growth. percentage side? predictors metrics, what side whether the or breadth mean as engagement just to specifically, both So these people we it's impact want or and listening conversion the do metrics, take for post content, cost hours streaming And side they're the of business. Tom, a in-car days improving in-car relates the are on the right? scale of to trial the we the we're listening the watching get I is of significant to If the future learnings can the we key, of have side in-trial then

Stephen. Thanks, Yes.

the in you and cost So customer I service it's look there. G&A as working R&D favorable of capital $XX lines favorable cost, is talked you of savings is the done the we're if is lot some -- sales favorability force saw, a think, human initiatives is you the And is some there far million worth of think of that across noted. look the optimization, along the some our the that of at of and in as a ad is and A our sales that on team, we them, we've as realignment just structure it which touch portion of lot one because the optimization did it, areas, of program I as on the lot When it favorable. across of initiatives all you side. approached about QX. billings we've

bunch different we have that a we're of initiatives on. working So

and you earlier Some them of are it, delayed. in as are at of a our some -- phases some little initiatives bit are look

so savings of And onward. the some continue will

think successful embarking now. have right been But for continue at it expect that. I on against the all we reality the work date are to that is We and of projects

question next Our Barrington Jim from line Goss the of with Research. comes

free In plans content kind if existing and be ad plans And the on or supporter subscribers existing of they to separate some the terms roll sort to channels? what them? these trying based are to to out, perceive have going going be cannibalization of are available you the totally Or that involved look you're risk do post? of stream you tap into of such

reduced set. cannibalization a I expect because a of Sure. content don't it's lot

also of some continue customers time, them great what content low important that we demand to to with about the see SiriusXM upsell XX existing to I are post it's to ads It's service to are in try the able with way convert, able channels. service. to inserted. And on the really for now, we an They trial, still opportunity that to to but choose channels better free it's understand not have, we that be activation and for if for volumes, kind have us they place. of a we us So might so for pretty maintain experience radio that believe, have right

to to ads platform. So targeted time, be the broadcast without capabilities side terms reduce the different those the start. delivered time. to more launching going or replace over then ads we We're over because set ad cannibalization, ads load was a to be the ad able could with of be we'll flexibility we critical IP we increase and XXXL. of set, we to could the providing that to XXXL the the have right? To with channel able It But provide in this on both we opportunity could there the have is thought launched extent and channel adjust,

sampling about get think, our to of we're going into we're free some limited content to in to So to SiriusXM going this products remove I at started should audiences app you expect learnings is does ultimately to with get all car. subscription to to content streaming them better well us extend some as packages. there in eventually some an exposure help and lot like getting us are friction. This going opportunities And what here, to determine well. And broader with site of the to are opportunity look look a our of the our functionality the as on get then the

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

service, build we to XXXL going package. it's side car be able volume the subscriptions do up the IP ads, those the business. core broader that, even of to the leverage access but ads in given in yes, just we time, to the as with over be in in free not have But right, than paid years targeted on think nonmusic free, I in going we're where

time, better able improved to be that so we ad higher we'll targeting, with as replacement And introduce we improve revenue. ad technology, ultimately and think CPMs over

going component International a do Maybe you sales that of opportunity with business? programming to one Is significant -- can last since satellites. one. be without your

in some that be of and the have sales Canada, with think, subscription, will outside the international through terms today the advertising SiriusXM Apple a Podcast+ I distribution we have opportunity U.S. limited of global. opportunity, broader parties, We third

be were we international, of one explore something OEMs. with likely to it a would if think I partner, perhaps our

We conjunction strong OEM. there, you be have of really a the in know, world an in us another for and launch service streaming relationships part could there to as way with

comes Our Mansson-Perrone with next of Morgan question from the Cameron line Stanley.

product kind today shift to that that back move I point color and do cetera. But trials. then self-pay underlying just OEM there, Is more guidance self-pay continuing to driven stabilize? of uncertainty a for that a expect shift make the lot primary the where packaging, to of the et On in estimate areas we challenge. And minds Or should terms trial a shifting anytime on your agreements? know agreements, soon? of are changing in outlook, any on expect is under in that by unpaid terms And mix new you agreements? when specificity of balance to existing

better typically. On OEM later or we Sure. adds again, net get be course, as to general the the communicate as that I we've to be we year-over-year. commentary year, sort subs, And expect, next year with stick next of has been of Thanks, longer-term early year would we our Cam, for this shift. provided question. the into agreements, and able same we'll a this on

there so arrangements, unpaid, individual of revenue are including different length the you are whether the of -- time. those share number negotiated, penetration as terms. have as subsidy we kind a we the where economic of course, with or and, trial, that most paid it factors of OEMs importantly, make We view extend over overall know, arrangements, improvements an agreements it's rates. to And is as to And the look

it's new increases think, with of in we necessarily OEMs. the some those of, agreements penetration new individual supportable just as economically favor over So adjust time, rates. I It's shift in agreements terms not

Thank you, today's participating everybody, for in call.

some offline We coming weeks. and of will to speak the you in

a Have you. summer. good Thank

Thank you.

today's This will conclude conference.

disconnect your for You may thank and your we lines this time, you at participation.