Sirius XM Holdings Inc

NASDAQ:SIRI

Q1-2025 Earnings Call

[Operator]

Greetings. Welcome to the SiriusXM First Quarter 2025 Earnings Call. [Operator Instructions]. It is now my pleasure to introduce Hooper Stevens, Senior Vice President of Investor Relations and Finance. Thank you, Hooper. You may begin.

[Hooper Stevens, executive]

Thank you, and good morning, everyone. Welcome to SiriusXM's First Quarter 2021 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; and Wayne Thorson, our Executive Vice President and Chief Operating Officer, will join Jennifer and Tom to take your question during 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. Additionally, we have posted a supplementary presentation on our Investor Relations website for your convenience. With that, I'll hand the call over to Jennifer.

[Jennifer Witz, executive]

Thanks, Hooper, and good day, everyone. Thank you for joining us today. Q1 marked our first full quarter since unveiling our new strategic direction and sharpened focus on super serving our core in-car audience at SiriusXM. We are already seeing early benefits from these efforts. As reflected in our quarter results.

Given our momentum and despite broadening economic uncertainty, we're pleased to confidently reiterate our full year guidance today. Across the business, we were vacated to our 3 key pillars: enhancing our subscription business with a keen eye toward our in-car leadership, leveraging the strength of our advertising business of our portfolio and optimizing efficiencies to deliver both cost reductions and higher returns.

Diving into the first quarter, our subscription business delivered strong results with solid year-over-year improvement in self-pay net adds driven by positive trends within our in-car business, which offset an expected reduction in streaming net adds. We saw reduced in-car churn largely due to lower cancel demand and nonpay despite the full price rate increase we implemented in early March and signs of declining U.S. consumer confidence.

Even in the face of economic uncertainty, our business remains resilient, buoyed by our industry-leading customer satisfaction and the essential nature of service to our core subscriber base. Underpinning everything we do is the unique live and human-curated content we offer our subscribers, which fuels fandom and the must-hear moments that happen on our air every day. Our coverage of and print at every major sporting event from the Super Bowl to March Madness and our exclusive music channels, including top curated by the biggest artists such as Lady Gaga, bring fans closer to what they love.

Additionally, our wide variety of news and pole programming, where we are seeing double-digit listenership growth and our new talk programming, including the launch of shows featuring Alex Cooper's Unwell and Page 6 and deliver value to our subscribers that they simply cannot get on any other service. We will continue to leverage the power of our extensive live and on-demand catalog as we look to both showcase our value turn subscribers and introduce new listeners to our portfolio.

Our efforts to add more value across our packages are paying off. Many of our subscribers are now enjoying the additional channels and programming newly included in their plan. and time spent listening in our app, where we offer more content has increased year-over-year among in-car customers. We believe this led to the better than reaction to our rate increase, which impacted virtually all full price plans as we experienced minimal churn impact.

We have also made progress rolling out our new in-car pricing and patting structure. This strategy, along with additional actions in last year has reduced our reliance on discounted promotional pricing at acquisition, while improving price transparency, building brand trust and driving our highest quarterly customer section on record. New programs launched in the past several months, including Tesla, enhancements to our used car owner data and our multi OEM subscriptions, which continue to expand, launching in model year 2026 Ford and Lincoln vehicles later this year also led to improved in-car acquisition in the first quarter compared to last year.

These programs give us confidence our strategy is working as we continue to unlock opportunities to grow with our core audio segments. We are committed to ensuring we provide the right earnings for our customers and are focused on both enhancing the value of our higher tiers and introducing additional options for more price-conscious listeners. This includes the launch of an ad-supported section featuring a compelling subset of our music and talk programming, which will open a new persistently lower priced option in almost 100 million cars already on the road.

The new tier allows us to leverage the strength of our advertising business without putting our more premium tiers at risk. The opportunity here also grows as our fleet becomes increasingly IP-enabled. We remain on track to have more than have new SiriusXM-equipped cars featuring our 360L product this year, allowing us to further customize offerings for our subscription across content, marketing and advertising. We plan to begin testing iterations of this new subscription in the coming months, enabling us to hone the offering and bring to market the strongest package.

Another way we are working to showcase the value of our service to potential building upon the work we've done to date with both free access, which continues to expand and our free-to-air events, which in the Chis Stapleton radio broadcasting free to all SiriusXM's radios throughout February.

On the topic of advertising, ad revenue was mostly flat compared to the same quarter in 2024. While we are closely watching day-to-day changes in the marketplace, the flexibility and broad reach of our offering just to meet the evolving needs of today's advertisers. This is best represented by the launch of our Creator Connect solution, which allows marketers to tap into creators audiences across audio, video and social.

In the first quarter alone, we have already outpaced our full year 2024 bookings for social and video and see this as a continued growth driver. In Q1, our podcasting revenue was up 33% year-over-year. Our podcast network clocked close to 1 billion download across audio and video in the first quarter, and we now reach an audience of 70 million monthly podcast listeners.

Our expertise in monetizing digital ad-supported views within Pandora provides a strong basis for the opportunity ahead as we look to expand SiriusXM advertising. The ability to deliver audiences across broadcast, streaming and podcast inclusive of video and social makes us a unique one-stop shop for marketers, and we are continuing to invest in ad tech solutions to make it easier for advertisers to buy, plan and measure across all 3.

At a corporate level, we remain committed to optimizing the business and driving efficiencies. In addition to ongoing cost actions, we are testing a variety of new initiatives, things and growth. We continue to see strong potential in areas such as AI and where we are leveraging the latest technologies to improve the customer experience, our marketing and our admit. In closing, while we are watching the shifting economic forces closely, we are pleased with our first quarter results and continue to have confidence in our full year guidance today as well as our ability to deliver meaningful value to consumers across our business in the quarter come. With that, I'll pass it over to Tom.

[Thomas Barry, executive]

Thank you, Jennifer, and good morning, everyone. As Jen mentioned, we entered 2025 with clear parties. Our first quarter performance flex our disciplined execution and steady products across the business. Despite the headline driven market uncertainty, delivered strong margins, return capital to our shareholders and advanced our strategic initiatives that will pose us for a strong 2025.

Before I dive into the quarter, let me address some of the uncertainties surrounding new autos impact on our business. Big picture, we sleep well at. We have multiple scenarios, and we do not expect any material tariff-related impact to our subscriber results this year. Thanks to our robust recurring revenue model increase penetration in the used car market and enhance trial capture rates compared to past auto sales downturns, we believe we have built a resilient buffer against any potential reduction in newer sales.

Looking at OpEx on the equip side, we do not manufacture hardware for automakers. Any tariff exposure is largely indirect and only the components sourced by automakers or their suppliers. So far, the act on our OpEx has been negligible, though we continue to monitor the broader supply chain. And of course, we are watching overall consumer health and its impact on discretionary spending.

To date, our strong churn performance suggests no meaningful change in consumer behavior in vigilant and tracking trends closely. Looking at the first quarter, total revenue was $2.07 billion, down 4% from a year ago, reflecting modest subscriber declines as we lap our fifth ARPU comp of the year. along with softer advertising trends across both of our segments.

Net income was $204 million and adjusted EBITDA totaled $629 million, down 3% from prior year with margins consistent year-over-year at 30%. Free cash flow was $56 million come from $88 million in the prior year period, primarily driven by timing payments, lower cash receipts and higher capital expenditures, partially offset by the elimination of Liberty related deal costs.

On the cost side, we began the year focused on achieving a $200 million run rate savings target by the end of 2025. So far, we reduced costs by over $30 million, contributing to lower expenses across marketing, product and tech, transmission, customer service and a Sales and marketing expenses were down 19%, driven by more streamlined media mix and tighter campaign execution. Product and technology expenses declined 15% and G&A decreased 3%, all reflecting our continued emphasis on operational efficiency and disciplined cost management.

Turning to the segments. In the SiriusXM segment, we generated $1.6 billion in revenue, a 5% decline year-over-year primarily driven by lower subscriber equipment revenue. Subscriber revenue declined 5%, reflecting a smaller average self-pay base and lower ARPU and and equipment revenue fell 18%, driven by changes in chipset costs and OEM production schedules. In this segment, gross profit was $937 million, representing a strong 59%, down modestly from 60% last year.

Self-pay net subscriber losses totaled 303,000, reflecting a 16% year-over-year improvement. Churn improved 18 basis points rounding to 1.6% in the first quarter and was a key contributor to our improved subscriber results. We saw improvements in all 3 broad categories we track, vehicle-related nonpay and voluntary churn. We have successfully managed the recent price increases across virtually all of our low price plans with minimal churn impact thus far and are continuing to reshape our pricing structure to satisfy demand at various price points.

We continue to anticipate a slightly improving trend in our core in-car net additions for the full year. But as discussed on our last earnings call, our full year results will likely include a couple of hundred thousand of additional drag from reduced streaming-only marketing, churn pull forward the implementation of click to cancel and shorter introductory self-pay promotional plans.

ARPU in the quarter was $14.86 and while down 3% year-over-year, we expect year-over-year comparisons to become more favorable as the year progresses. Subscriber acquisition costs were $100 million, up 11% over previous year's quarter, driven by contractual change certain automakers focused on improving penetration rates and higher chipset costs.

SAC per installation was $18.86, further increased by the timing-related pullback in modern production. Turning to the Pandoran off-platform segment. Revenue declined $0.02 year-over-year to $487 million, reflecting macro pressure in the digital ad market. Advertising totaled $355 million, down 2% on that pressure, partly offset by continued growth in pod canalization and revenue.

To provide more color on the advertising business, we're seeing the most softness in the travel, auto and retail sectors. categories that tend to be early indicators of shifts in consumer sentiment. Broader economic uncertainty, including concerns about tariffs has been more spending towards short-term performance-driven marketing channels. At the same time, we're seeing pockets of strength in sectors like pharma and telco, which have helped offset some of the broader weakness.

Picture, we continue to see strong opportunities to invest in our ads business particularly across high-growth areas like podcasting, programmatic capabilities and emerging video plants. Subscription revenue in the Pandora and off platform segment remained relatively flat in the segment's gross profit totaled $139 million for the quarter, maintaining a 29% margin consistent with last year's first quarter.

Looking at CapEx spending for the quarter totaled $189 million. As previously communicated, we continue to expect non setbacks to remain in the $450 million to $500 million range for 2025. And by repeater and broadcast infrastructure replacements and partially offset by lower IT spending. Lastly, during the quarter, we returned $116 million to stockholders, including $91 million in dividends and $25 million through share repurchases.

We ended the first quarter with a trailing net debt to adjusted EBITDA ratio of approximately 0.8x and continue to prioritize a balanced approach to capital allocation. Our long-term leverage ratio target remains in the low to mid-3x range. We remain focused on maintaining financial flexibility and taking a smart consistent approach to capital deployment.

Finally, we are reaffirming our 2025 full year guidance, approximately $8.5 billion in revenue, $2.6 billion in adjusted in EBITDA and and $1.15 billion in free cash flow. This reflects the company's continued confidence in our strong operational execution and cost management, backed by robust free cash flow, continued operational efficiencies and is strategic investments we feel great about our ability to generate long-term sustainable revenue for shareholders across a variety of economic environments.

With that, I'll turn it over to the operator for Q&A.

[Operator]

[Operator Instructions]Our first question is from the line of Sebastiano Petti with JPMorgan.

[Sebastiano Petti, analyst]

Just thinking about the full year guide, Tom, sounded pretty confident in the levers in the business, cost-cutting opportunity, but -- just help us think about -- there's no tariff impact, as you guys mentioned on the call. The price increase is now fully baked, ARPU comps are getting easier for the year and cost efforts are beginning to scale. -- margins in the first quarter were flat year-over-year, the guide implies 140 basis contraction. Why isn't there upside to the 2025 EBITDA guide? What are we missing here? .

And then as we're thinking about the impact of digital, you reiterated a couple of hundred million impact from click to cancel as well as the turn off of the digital dialing back marketing efforts there. Can you perhaps maybe size the quantum of the digital loss in the first quarter as we're kind of thinking about it? Because I think previous comments were first half is perhaps weaker year-over-year before improving in the back half of the year in terms of the self-pay net add cadence. I just wanted to make sure if that is still the right thing.

[Jennifer Witz, executive]

Tom, do you want to pick up the EBITDA?

[Thomas Barry, executive]

Yes. So Sebastiano, when you look at the overall EBITDA, we've had a lot of moving pieces in there. There's obviously -- when you look at the revenue since the cost savings initiatives, we're on course. And in Q1, I think we've done pretty well as far as where we positioned the business. And I think the cost savings will continue along the line, and we're obviously heavily focused maintaining the margin for the full year. So when you look at the numbers, I think we're comfortable with how the numbers roll up right now.

And I think there's not a lot of changes. We have some things moving back and forth. The cost savings are on target, like I said in the script, so I think we feel pretty good as far as where EBITDA is positioned right now.

[Jennifer Witz, executive]

Yes. I think the guidance was designed very solid, as you can imagine, to take into account trends on subs revenue and cost savings. And as Tom mentioned, there is going to be continued improvement on the cost side heading towards this $200 million run rate exiting 2025 savings number. We also had some impacts in the first quarter of lower marketing that we may choose to reinvest later in the year. We did discuss in earlier comments about the launch of low cost of ads.

And so there could be some reinvestment of some of those savings later in the year. But the biggest opportunity for upside relative to the guidance likely is in costs overall.

And then on your question about click to cancel. So that doesn't go into place across the U.S. until 2 weeks from now. We do have it implemented across a number of states, and so we have some expectation about the impact of that. That's been -- that's embedded in our current numbers. And obviously, we had very strong churn performance in the first quarter, and it's included in that. And we do think that rolling it across the U.S. will have incremental impact on churn. Here, it's one of the 3 things we highlighted is having an impact on net adds this year beyond what's going on in the core.

In the core, we would expect net adds to actually improve year-over-year, but for these 3 impacts of click to cancel, the streaming net add reduction and the pull forward from using shorter-term promotions post conversion in trial in car. So the first quarter, we did say, if your question is really about streaming net adds, the first quarter streaming net adds were negative and that was offset by better lower losses on the in-car side of the business. And again, we feel really good about the subscriber trend line that we've talked about an overall guidance for the year.

[Operator]

The next question is from the line of Kutgun Maral from Evercore ISI.

[Kutgun Maral, analyst]

SiriusXM subscriber results showed quite a healthy improvement compared to last year. I think churn specifically is very encouraging. And what's up to me was that non-evolutary were both lower year-over-year and that there's been minimal impact so far following the recess. Not sure what more to can say, but any additional color is much appreciated because of all the concerns around the macro and competitive backdrops and how we should be thinking about the trend going forward?

[Jennifer Witz, executive]

Sure. We are very encouraged by our first quarter results and just how the metrics have trended even more recently Obviously, we're watching things like cancel demand, cancel rate on the voluntary side, nonpay entry rates, cure rates and metrics. And we really haven't seen anything to give us any pause.

And I think a lot of it has to do with just our loyal core long-term subscriber base, where we have been seeing higher satisfaction and value even than ever before and consistently low churn. And I think that just decreases some of the potential impact from economic uncertainty on our subscription business.

Just internal and external research, both confirm very high satisfaction and engagement with our service, among our subscribers -- we see strength also in our engagement data, which we have more and more of, obviously, with 360L and listening outside the car through the app. We saw a very healthy engagement in the first quarter.

And then again we just monitor the metrics, but we really haven't seen anything of concern. And this is, of course, even or despite the rate increase that we implemented across the price packages in the first quarter. So we really feel good about where we are on the subscription side of the business.

[Operator]

[Operator Instructions] our next questions are from the line of Steven Cahall with Wells Fargo.

[Steven Cahall, analyst]

Jennifer, I was wondering if you could give us some more color on your new ad supported here. So is the subscriber acquisition process there? Any different versus your current paid tier. And is there any price in how the COGS work for that in terms of like revenue share and royalties? I guess what I'm trying to get at is it sounds like this should be EBITDA accretive. Is it margin neutral? Is it margin accretive or something different? And how significant maybe could that be this year and next as you start to lean into it a little more.

And then maybe just another one on the self-pay net add outlook. Is there any way to just think about how we tie up all the things that are not related to in-car core trends? So between click to cancel the promo impact and the streaming-only impact? Are we talking kind of single-digit hundreds of thousands of subs? Is it bigger or smaller than that? We just kind of love to understand that. And is that pretty much done after this year? And then we don't have to worry about those things from '26 on or how do those linger?

[Jennifer Witz, executive]

I'll start with your second question, Steven on just the 3 things. So the way we've been talking about it is that just without them, it would be -- we would be better year-over-year in terms of self-pay net adds. But 3 things we've highlighted that you mentioned result in about a couple of hundred thousand incremental negative net ads this year.

Some of those we would expect to roll into next year, but clearly something like short-term promotions pull forward some churn. So that gets better when you look at year-over-year comps in '26. And then we believe we have a number of initiatives in place to help improve the trend line. That's certainly our goal for '26, including things like low cost of ads.

And I'll let Wayne comment more on it. He's been key to kind of getting this off the ground. But I'm really excited about how team has rallied around this initiative as we focus on opportunities to really super serve our core in-car audience. I mean as you know, the time set listening in car, 80% of that for 35 years old and is AMFM and SiriusXM.

So we have a real opportunity here take share from AMFM with the right price points and packages. So Wayne, do you want to talk more about.

[Wayne Thorsen, executive]

Yes. Thanks. And as you can tell, we are really excited about this addition to our business. Our plan is to roll this out in the coming months, but in a very targeted way, so while at the same time testing a few different prices and packages, we're expecting to land in the high single digits. In terms of price and Jennifer noted, this is going to be available from the beginning in almost 100 million vehicles and available to all new car trialers.

So the addressable opportunity is quite large, but we're going to be using our new capabilities to target in a very thoughtful way on how this is offered into whom. So the goal here is to offer this to cohorts that we've identified you do not convert as well or we're generally more price sensitive. And so the goal here overall is to increase yield in our overall funnel and looking forward to reporting back as we made a little bit more progress.

[Jennifer Witz, executive]

Yes. And then just to your margin question, yes, our margins are pretty high, as you know, our variable margins across all of our packages, and I don't see this as being any different. I would expect it to have more impact next year than this year because we're still in test phase and ramping up later this year. .

[Operator]

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

[Jessica Reif Cohen, analyst]

Sorry, yes. Sorry, can you hear me now? .

[Operator]

Jessica, we've got you.

[Jessica Reif Cohen, analyst]

Yes. Okay. So sorry about that. So 2 things. One, advertising is clearly going to become a more important component of revenue. What changes are you making, if any, to your sales approach, whether it's direct sales, programmatic, et cetera? And then the second thing is just in broadcasting, you've made an investment. Can you just talk about how you are monetizing across term platforms, your business talent that you have? And how much bigger do you hope to figure out?

[Jennifer Witz, executive]

Sure. I'll start, Jessica. First on podcasting, it's one of the larger investments we've made over the last few years, and I'm really pleased with how executed here. As you know, it supports certainly the ad side of our business, but we also have exclusive content on the SiriusXM side of the business, and we've launched the podcast Plus subscription, which is attributed across multiple other channels.

But on the ads business, it has the large impact and you saw the numbers in the first quarter, revenue was up 30%. So we feel really good about the trend line here. And a lot of that does have to do with selling across channels where creators are pushing their content. So whether that's audio podcasts, video podcasts, video clips or social. We've been able to offer packages to advertisers to extend their reach alongside the creators that they respect and value and ultimately improve their campaign performance.

So we've had really strong interest in that among marketers I don't see that dampening at all given the general environment, which is maybe impacting other parts of the ads business more than podcasting. There's just a very strong trend line there. there's, of course, always more we can do in terms of bringing more self-serve solutions and better bringing targeting and measurement into our portfolio so that advertisers can really buy us the portfolio.

It's going to your first tout, our sales approach -- there was still a very significant effort for us. And I think the programmatic we've had long-term success with and continue to see strong demand there. It's especially helpful to identify the capabilities there and where marketers might be sort of meeting to deploy budgets. And we certainly saw that at the end of the first quarter where programmatic started to rise towards the end of the quarter and continue to see sort of late bookings. So having those capabilities in place is incredibly helpful. But again, there's more we can do to build out self-serve capabilities so that we can be more appealing to a broader set of marketers.

[Operator]

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

[Stephen Laszczyk, analyst]

Jennifer, maybe on pricing. I'm curious if you talk a little bit more about the receptivity you're seeing to some of the pricing increases. It sounds like the value exchange that you pushed down late last year, early this year has really been helping on -- just curious on the back of that, how perhaps you should think about the pacing of pricing increases and ARPU throughout the year. And then just to double-click on advertising on more of a real-time basis. Curious you're hearing from your advertising partners as they settle in here past the weeks of tariff volatility, how it trends early into this order compared to what you saw coming out of the first quarter?

[Jennifer Witz, executive]

Sure. The rate increase went into place in early March and accross our full price packages. And anywhere from $1 to $2, depending upon the package is we wanted to align prices with our all-in pricing we put in place the middle of last year. So really significant for us. And we've seen very negative impact. Of course, it's still early. But we do have a majority of our subscribers on monthly plans, -- so it is pretty fully rolled out as we go into the next few months.

I think a lot of times we see action when we send the notices out about the rate increase as opposed to when the increase actually goes into effect. So we have a pretty good read on consumer response. And it is exactly what you mentioned, I believe, that has helped us through this, which is we push a lot of value to those packages in the fall. And we actually saw a lot of increment with that newly add content among those subscribers.

So again, feel good about this. I think in terms of the ARPU, as we've said, first quarter was tough as it just went into place late in the quarter, but we would expect the trend line to get better as we go throughout this year. And then on the ad side, I'll let Tom talk about the categories. But I would just say it's hard to get a read on it. Clearly, the neos every day, every week. I think we're just pleased with the portfolio we have to be able to optimize across broad streaming and podcasting and certainly and the Denison podcasting make us very attractive to marketers overall. Do you want to talk about the categories?

[Thomas Barry, executive]

Stephen. So looking at the categories, when you look at warned sales, Jennifer, articulated appropriately. I mean, I think the -- we're seeing -- we're cautious, but you look at the -- we had a fairly solid quarter in Q1. We're seeing a little bit of pullback on the on the auto and the level of retail. So we're seeing some softness on that side, but we are also seeing strength on the the telco and pharma. So we have a broad portfolio. We are obviously in this period of tariffs and volatility. Our sales team is working hard in trying to react to the market space. So it will be ongoing and we'll continue to press it.

[Operator]

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

[Barton Crockett, analyst]

Okay. I was wondering if you could maybe elaborate a little bit more on the statement that you don't see real kind of risk from tax on the car market? I understand the confidence, but I'm just wondering if you could unpack you said you looked at a lot of -- some scenarios if you could unpack the scenario you look at and how you came to that conclusion. And also, I think you were very particular in your verbage, impact this year as part of this with your long trials at some of the impact would be pushed into next year. Is that part of it, if you could explain that would be helpful.

[Jennifer Witz, executive]

Sure. I'll start on this. So I think certainly, as we've seen in the past, with a reduction in car sales, the near-term impact is generally less vehicle-related churn, right? As our subscribers are not trading in cars, and they were canceling their subscription and going on a trial.

So that's what we would expect in the near term. And then the question is like how to lower auto sales if that's truly what happens, continue in the future years, right? So what's the trend line and if there was a long-term notable reduction in auto sales, then I would be more concerned for the business. But our expectation is that new car sold if there is a reduction, it will be in part by used car sales. We have a very strong representation of used car sales in one.

We've added data partners to help us identify when those cars trade hands, and we're able to increasingly offer trials and seen that materialize in better growth adds essentially in our business. And so I think from a subscriber standpoint, there could be some near-term positives and then maybe some slight longer-term negative financially without the SAC, it will be positive. But in general, we believe that the new car sales reduction would be in part offset by use even without that, we still have high confidence in the financial subscriber metrics for this year and likely next year as well.

[Barton Crockett, analyst]

Okay. And if I could just follow up, I just -- if you could elaborate a little bit more on what you're hearing right now from your automaker partners in terms of things are very fluid. If you could give us any more recent update on what you're hearing from them in terms of their acquisitions for new car sales and a possibility of an offset from used car offset of the new car pressure potentially?

[Jennifer Witz, executive]

I mean we're hearing -- I think what you're hearing just the public stance and obviously, the, I guess, April SAAR will come out later today, I believe, but March was very strong. There's been a lot of pull forward in terms of consumers buying ahead of an expectation of perhaps price increases. So I think we're watching the public news as much as you are in -- and obviously, it continues to evolve. But again, some pull forward also offsets any potential negative that might happen over the year.

[Operator]

Our next and final question is from Cameron Mansson-Perrone from Morgan Stanley.

[Cameron Mansson-Perrone, analyst]

One follow-up on price hike. Pretty encouraging churn result in conjunction with that. Jennifer, I'd be curious to your -- should we expect -- looking beyond 2025, should we expect still that you continue kind of in every other year cadence to price taking? Or does the response among the subscriber base this quarter recently changed the way you're thinking about kind of the moderate pricing philosophy longer term?

And for Tom pretty clear the tariffs, you don't expect to have any impact on the OpEx base Subbu I'd be curious, I'm assuming for your satellite contracts that are largely contracted, but for the onset CapEx, any thoughts on risk or not to any tariff impact there?

[Jennifer Witz, executive]

So I'll start on pricing. Our goal is kind of every other year, and we will continue to evaluate that. There may be opportunities to take price on certain packages, but not all of them, so that there is some form of a price increase every year. But we haven't established what we're going to do going into next year. We're watching a reaction really closely. While I have a lot of confidence in the loyal nature of our subscriber base I think we want to be mindful of the economic environment, clearly. And I think part of what we're doing is, as you can tell, increasing the breadth of the pricing and the packages that we have in market so that we have the flexibility to offer consumers who might be more price sensitive.

And one of those lower-priced packages that is on an ongoing rate as opposed to a short-term promotional discount. So again, building out this broader pricing and packaging structure, I think, helps us meet demand and help with retention across a number of different segments. Tom, do you want to address CapEx?

[Thomas Barry, executive]

Yes, sure. Yes, Cameron. So looking at CapEx, on the satellite side, you're right, the satellite infrastructure and IT systems are U.S. sourced. So we don't see a lot of risk there from a tariff standpoint. Some of the terrestrial repeaters are actually come from Canada, but for the most part, we feel limited, very limited exposure on the SAT side. The non-SAT side is a lot of labor and other components and think in the last 6 months as way into Sam's team and arrive. We spent a lot of time going through non-SAC CapEx, and we feel that we've stress tested the components of it, and we feel very comfortable with the tariff impact.

[Operator]

Thanks, everybody, for participating today, and we look forward to speaking to you soon. Take care.