Sirius XM Radio said that the standalone Sirius Satellite Radio Inc. unit posted a narrower quarterly net loss for Q208, beating Wall Street expectations by a penny.
Revenue increased 25% to $283.0 million, total subscribers grew in excess of 8.9 million and the adjusted loss from operations saw a 70% decrease.
Sirius lost $84 million, or 6 cents a share, compared with the loss of $134 million a year before. Revenue rose to $283 million from $226 million year over year. Analysts surveyed by Thomson Financial were looking for a 7-cent loss on revenue of $283 million.
Orbitcast will be live-blogging the conference call today at 8am ET.
Read the full press release and financials after the jump...
SIRIUS XM Radio Reports Second Quarter 2008 Results
- Revenue of $283 Million, Up 25% Year Over Year
- Total Subscribers of More Than 8.9 Million, Up 25% Year Over Year
- Record Second Quarter Gross Additions
- Adjusted Loss from Operations Improves 70% Year Over Year
NEW YORK, Aug. 7 /PRNewswire-FirstCall/ -- SIRIUS XM Radio (NASDAQ:SIRI) today announced stand alone SIRIUS Satellite Radio second quarter 2008 financial results, including a 25% increase in revenue to $283.0 million, total subscribers in excess of 8.9 million and a 70% decrease in the adjusted loss from operations.
(Logo: http://www.newscom.com/cgi-bin/prnh/19991118/NYTH125 )
"Second quarter stand-alone SIRIUS results once again demonstrated that we achieved strong revenue growth and solid cost control," said Mel Karmazin, CEO of SIRIUS. "Despite a tough economy and weak auto sales, gross additions set a new second quarter record. In the second quarter both revenue and subscribers grew 25% as compared with last year, while cash costs remained essentially flat leading to a 70% reduction in our second quarter EBITDA loss."
"The combined company now has an annualized revenue run-rate of over $2.4 billion, making SIRIUS XM Radio one of the fastest growing and best positioned subscription media businesses. With rapid integration efforts underway, we started realizing synergies on Day 1. We expect to realize $400 million in synergies next year and see this figure growing substantially beyond 2009."
SIRIUS ended the second quarter 2008 with 8,924,139 subscribers up 25% from 7,142,538 subscribers at the end of the second quarter 2007. Retail subscribers increased 7% in the second quarter 2008 to 4,676,814 from 4,364,646 at the end of the second quarter 2007. OEM subscribers increased 53% in the second quarter 2008 to 4,247,325 from 2,777,892 at the end of second quarter 2007. During the second quarter 2008, SIRIUS added 279,820 net subscribers.
Total revenue for the second quarter 2008 increased to $283.0 million, up 25% from second quarter 2007 total revenue of $226.4 million. Second quarter 2008 average monthly self-pay customer churn rate was 1.6%. The second quarter 2008 conversion rate was approximately 48%. SAC per gross subscriber addition was $78 in the second quarter 2008, an improvement of 27% over second quarter 2007 SAC per gross subscriber addition of $107.
RESULTS OF OPERATIONS
The discussion of operating expenses below excludes the effects of stock-based compensation. SIRIUS believes this presentation improves the transparency of disclosure and is consistent with the way operating results are evaluated by management.
SECOND QUARTER 2008 VERSUS SECOND QUARTER 2007
For the second quarter of 2008, SIRIUS recognized total revenue of $283.0 million compared to $226.4 million for the second quarter of 2007. This 25%, or $56.6 million, increase in revenue was driven by a $56.9 million increase in subscriber revenue resulting from the net increase in subscribers of 1,781,601 from the second quarter of 2007.
The company's adjusted loss from operations decreased $55.5 million to ($23.8) million for the second quarter of 2008 from ($79.3) million for the second quarter of 2007 (refer to the reconciliation table of net loss to adjusted loss from operations). This decrease was primarily driven by the increase in total revenue of $56.6 million and a $24.3 million improvement in subscriber acquisition costs which more than offset an increase in revenue share and royalties.
Satellite and transmission expenses for the second quarter 2008 remained consistent with the second quarter of 2007 at $6.7 million.
Programming and content expenses increased $1.0 million to $54.1 million for the second quarter of 2008 from $53.1 million for the second quarter of 2007. The increase was primarily attributable to license fees associated with new programming and higher compensation-related costs for additions to headcount.
Revenue share and royalties increased $19.9 million to $49.7 million for the second quarter of 2008 from $29.8 million for the second quarter of 2007. The increase was attributable to the determination by the Copyright Royalty Board in January 2008 of the royalty rate under the statutory license covering the performance of sound recordings. The 25% growth in the company's revenues also contributed to the increase in revenue share and royalties.
Customer service and billing expenses increased $1.2 million to $22.6 million for the second quarter of 2008 from $21.4 million for the second quarter of 2007. The increase was primarily attributable to call center operating costs necessary to accommodate the increase in our subscriber base and respective transaction fees. Customer service and billing expenses, as adjusted, per average subscriber declined 18% to $0.86 for the second quarter of 2008 from $1.05 for the second quarter of 2007, due to efficiencies across a larger subscriber base.
Sales and marketing expenses increased $2.7 million to $46.7 million for the second quarter of 2008 from $44.0 million for the second quarter of 2007. This increase was primarily attributable to equipment related retention costs associated with efforts to retain existing subscribers that we believe will result in higher revenue and lower churn. This was offset by lower consumer advertising and reduced cooperative marketing spend with the company's channel partners.
Subscriber acquisition costs (SAC) decreased $24.3 million or 23% to $81.4 million for the second quarter of 2008 from $105.7 million for the second quarter of 2007. This decrease was primarily attributable to lower retail and OEM subsidies due to better product economics.
SAC per gross subscriber addition decreased 27% to $78 for the second quarter of 2008 from $107 for the second quarter of 2007. This decrease was primarily attributable to lower retail and OEM subsidies due to better product economics.
General and administrative expenses increased $3.7 million to $31.0 million for the second quarter of 2008 from $27.3 million for the second quarter of 2007. The increase was primarily the result of higher litigation costs and compensation-related costs to support the growth of the business.
Engineering, design and development expenses decreased $2.3 million to $8.0 million for the second quarter of 2008 from $10.3 million for the second quarter of 2007. This decrease was attributable to reduced OEM and product developments costs.
SIRIUS reported a net loss of ($83.9) million, or ($0.06) per share, for the second quarter of 2008, compared to a net loss of ($134.1) million, or ($0.09) per share, in the second quarter of 2007. The adjusted net loss per share, or net loss per share excluding stock-based compensation was ($0.05) in the second quarter of 2008 as compared to an adjusted net loss per share of ($0.08) in the second quarter of 2007 (refer to the reconciliation table of net loss per share to adjusted net loss per share).
SIX MONTHS ENDED JUNE 30, 2008 VERSUS SIX MONTHS ENDED JUNE 30, 2007
For the six months ended June 30, 2008, SIRIUS recognized total revenue of $553.4 million compared with $430.5 million for the six months ended June 30, 2007. This 29%, or $122.9 million increase in revenue, was primarily driven by a $121.7 million increase in subscriber revenue, resulting from the net increase in subscribers of 1,781,601 from the end of the second quarter of 2007.
The company's adjusted loss from operations decreased $100.1 million to ($63.2) million for the six months ended June 30, 2008 from ($163.3) million for the six months ended June 30, 2007 (refer to the reconciliation table of net loss to adjusted loss from operations). This decrease was driven by a 29%, or $122.9 million, increase in total revenue which more than offset the 3%, or $21.9 million, increase in operating expenses.
Satellite and transmission expenses decreased $0.3 million to $13.7 million for the six months ended June 30, 2008 from $14.0 million for the six months ended June 30, 2007.
Programming and content expenses increased $2.8 million to $113.0 million for the six months ended June 30, 2008 from $110.2 million for the six months ended June 30, 2007. The increase was primarily attributable to license fees associated with new programming and higher compensation-related costs for additions to headcount.
Revenue share, royalties and residuals increased $35.0 million to $92.0 million for the six months ended June 30, 2008 from $57.0 million for the six months ended June 30, 2007.
The increase was attributable to the determination by the Copyright Royalty Board in January 2008 of the royalty rate under the statutory license covering the performance of sound recordings. The 29% growth in the company's revenues also contributed to the increase in revenue share and royalties.
Customer service and billing expenses increased $6.1 million to $49.2 million for the six months ended June 30, 2008 from $43.1 million for the six months ended June 30, 2007. The increase was primarily attributable to call center operating costs necessary to accommodate the increase in our subscriber base. Customer service and billing expenses, as adjusted, per average subscriber declined 13% to $0.96 for the six months ended June 30, 2008 from $1.10 for the six months ended June 30, 2007, due to efficiencies across a larger subscriber base.
Sales and marketing expenses increased $0.5 million to $79.9 million for the six months ended June 30, 2008 from $79.4 million for the six months ended June 30, 2007.
This increase was primarily attributable to equipment related retention costs associated with efforts to retain existing subscribers that we believe will result in higher revenue and lower churn. This was offset by lower consumer advertising and reduced cooperative marketing spend with the company's channel partners.
Subscriber acquisition costs (SAC) decreased $32.7 million to $171.2 million for the six months ended June 30, 2008 from $203.9 million for the six months ended June 30, 2007. This decrease was primarily attributable to lower retail and OEM subsidies due to better product economics.
SAC per gross subscriber addition decreased 19% to $84 for the six months ended June 30, 2008 from $104 for the six months ended June 2007. This decrease was primarily driven by lower retail and OEM subsidies due to better product economics.
General and administrative expenses increased $17.1 million to $67.8 million for the six months ended June 30, 2008 from $50.7 million for the six months ended June 30, 2007. The increase was primarily a result of higher litigation related costs and compensation-related costs to support the growth of the business.
Engineering, design and development expenses decreased $6.2 million to $15.5 million for the six months ended June 30, 2008 from $21.7 million for the six months ended June 30, 2007. This decrease was attributable to reduced OEM and product developments costs.
SIRIUS reported a net loss of ($188.0) million, or ($0.13) per share, for the six months ended June 30, 2008, compared with a net loss of ($278.9) million, or ($0.19) per share, for the six months ended June 30, 2007. The adjusted net loss per share, or net loss per share excluding stock-based compensation was ($0.10) for the six months ended June 30, 2008 compared with an adjusted net loss per share excluding stock based compensation of ($0.16) for the six months ended June 30, 2007 (refer to the reconciliation table of net loss per share to adjusted net loss per share).
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
SUBSCRIBER DATA, METRICS
AND OTHER NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, unless otherwise stated)
(Unaudited)
Subscriber Data:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Beginning subscribers 8,644,319 6,581,045 8,321,785 6,024,555
Net additions 279,820 561,493 602,354 1,117,983
Ending subscribers 8,924,139 7,142,538 8,924,139 7,142,538
Retail 4,676,814 4,364,646 4,676,814 4,364,646
OEM 4,231,428 2,758,639 4,231,428 2,758,639
Hertz 15,897 19,253 15,897 19,253
Ending subscribers 8,924,139 7,142,538 8,924,139 7,142,538
Retail 33,599 129,843 36,105 322,821
OEM 244,610 434,955 565,796 799,629
Hertz 1,611 (3,305) 453 (4,467)
Net additions 279,820 561,493 602,354 1,117,983
Metrics:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Gross subscriber
additions 1,029,287 1,002,145 2,032,709 1,990,603
Deactivated subscribers 749,467 440,652 1,430,355 872,620
Average monthly churn
(1)(6) 2.8% 2.1% 2.8% 2.2%
SAC per gross subscriber
addition (2)(6) $78 $107 $84 $104
Customer service and
billing expenses per
average subscriber
(3)(6) $0.86 $1.05 $0.96 $1.10
Total revenue $283,017 $226,427 $553,367 $430,464
Free cash flow (4)(6) $(31,087) $(80,031) $(217,622) $(226,746)
Monthly ARPU: (5)(6)
Average monthly
subscriber revenue per
subscriber before the
effects of Hertz
subscribers and
rebates $10.14 $10.24 $10.12 $10.26
Effects of Hertz
subscribers 0.06 0.05 0.05 0.05
Effects of rebates (0.03) (0.03) (0.04) (0.13)
Average monthly
subscriber revenue per
subscriber 10.17 10.26 10.13 10.18
Average monthly net
advertising revenue
per subscriber 0.32 0.45 0.32 0.41
ARPU $10.49 $10.71 $10.45 $10.59
SIRIUS XM RADIO INC. AND SUBSIDIARIES
SUBSCRIBER DATA, METRICS
AND OTHER NON-GAAP FINANCIAL MEASURES - CONTINUED
(Dollars in thousands, unless otherwise stated)
(Unaudited)
Adjusted Loss from Operations:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Net loss $(83,899) $(134,147) $(188,017) $(278,892)
Depreciation 27,113 26,284 54,019 53,070
Stock-based
compensation 17,151 17,017 39,413 41,277
Other income
and expense 15,307 10,992 30,258 20,137
Income tax
expense 543 555 1,086 1,110
Adjusted loss
from
operations (7) $(23,785) $(79,299) $(63,241) $(163,298)
Adjusted Net Loss and Adjusted Net Loss per Share:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Net loss $(83,899) $(134,147) $(188,017) $(278,892)
Stock-based
compensation 17,151 17,017 39,413 41,277
Adjusted net
loss $(66,748) $(117,130) $(148,604) $(237,615)
Net loss per
share (basic
and diluted) $(0.06) $(0.09) $(0.13) $(0.19)
Stock-based
compensation 0.01 0.01 0.03 0.03
Adjusted net
loss per
share (basic
and diluted) (8) $(0.05) $(0.08) $(0.10) $(0.16)
Weighted average
common shares
outstanding
(basic and
diluted) 1,499,723 1,462,362 1,487,610 1,459,701
SIRIUS XM RADIO INC. AND SUBSIDIARIES
SUBSCRIBER DATA, METRICS
AND OTHER NON-GAAP FINANCIAL MEASURES - CONTINUED
(Dollars in thousands, unless otherwise stated)
(Unaudited)
Condensed Consolidated Statements of Operations:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Total revenue $283,017 $226,427 $553,367 $430,464
Operating expenses
(excludes depreciation
and stock-based
compensation shown
separately below):
Satellite and
transmission 6,692 6,716 13,719 14,046
Programming and content 54,087 53,096 112,991 110,159
Revenue share and
royalties 49,723 29,841 92,043 56,975
Customer service and
billing 22,600 21,440 49,245 43,094
Cost of equipment 6,647 7,386 14,234 13,843
Sales and marketing 46,669 44,015 79,895 79,368
Subscriber acquisition
costs 81,392 105,658 171,202 203,895
General and
administrative 31,010 27,308 67,790 50,711
Engineering, design and
development 7,982 10,266 15,489 21,671
Depreciation 27,113 26,284 54,019 53,070
Stock-based
compensation 17,151 17,017 39,413 41,277
Total operating expenses 351,066 349,027 710,040 688,109
Loss from operations (68,049) (122,600) (156,673) (257,645)
Other income (expense) (15,307) (10,992) (30,258) (20,137)
Loss before income taxes (83,356) (133,592) (186,931) (277,782)
Income tax expense (543) (555) (1,086) (1,110)
Net loss $(83,899) $(134,147) $(188,017) $(278,892)
SIRIUS XM RADIO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share amounts)
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Revenue:
Subscriber revenue,
including effects of
rebates $266,518 $209,635 $522,158 $400,431
Advertising revenue,
net of agency fees 8,332 9,177 16,740 15,898
Equipment revenue 7,956 6,255 14,019 10,926
Other revenue 211 1,360 450 3,209
Total revenue 283,017 226,427 553,367 430,464
Operating expenses
(excludes depreciation
shown separately
below) (1):
Cost of services:
Satellite and
transmission 7,451 7,337 15,275 15,323
Programming and
content 55,247 54,311 116,939 114,309
Revenue share and
royalties 49,723 29,841 92,043 56,975
Customer service
and billing 22,865 21,618 49,786 43,471
Cost of equipment 6,647 7,386 14,234 13,843
Sales and marketing 49,133 46,864 87,598 87,861
Subscriber acquisition
costs 81,392 105,665 171,216 205,782
General and
administrative 42,467 38,471 91,246 73,814
Engineering, design
and development 9,028 11,250 17,684 23,661
Depreciation 27,113 26,284 54,019 53,070
Total operating expenses 351,066 349,027 710,040 688,109
Loss from operations (68,049) (122,600) (156,673) (257,645)
Other income (expense):
Interest and
investment income 1,425 4,753 4,227 10,795
Interest expense, net
of amounts
capitalized (16,745) (15,750) (34,421) (30,942)
Other income 13 5 (64) 10
Total other income
(expense) (15,307) (10,992) (30,258) (20,137)
Loss before income
taxes (83,356) (133,592) (186,931) (277,782)
Income tax expense (543) (555) (1,086) (1,110)
Net loss $(83,899) $(134,147) $(188,017) $(278,892)
Net loss per share
(basic and diluted) $(0.06) $ (0.09) $(0.13) $(0.19)
Weighted average common
shares outstanding
(basic and diluted) 1,499,723 1,462,362 1,487,610 1,459,701
(1) Amounts related to stock-based compensation included in other
operating expenses were as follows:
Satellite and transmission $759 $621 $1,555 $1,277
Programming and content 1,160 1,215 3,949 4,150
Customer service and
billing 265 178 541 377
Sales and marketing 2,464 2,849 7,704 8,493
Subscriber acquisition
costs - 7 14 1,887
General and administrative 11,457 11,163 23,455 23,103
Engineering, design and
development 1,046 984 2,195 1,990
Total equity granted to
third parties and
employees $17,151 $17,017 $39,413 $41,277
SIRIUS XM RADIO INC. AND SUBSIDIARIES
BALANCE SHEET DATA
(In Thousands)
As of
June 30, December 31,
2008 2007
(Unaudited)
Cash, cash equivalents and
marketable securities $220,598 $439,289
Restricted investments 56,000 53,000
Working capital (822,338) (394,989)
Total assets 1,456,485 1,694,149
Total debt 1,279,867 1,314,418
Total liabilities 2,363,604 2,486,886
Accumulated deficit (4,586,989) (4,398,972)
Stockholders' deficit (907,119) (792,737)
SIRIUS XM RADIO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Cash flows from operating
activities:
Net loss $(83,899) $(134,147) $(188,017) $(278,892)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation 27,113 26,284 54,019 53,070
Non-cash interest expense 967 805 1,971 1,559
Provision for doubtful
accounts 2,488 2,266 5,048 4,354
(Gain) loss on disposal of
assets - 110 - 106
Stock-based compensation 17,151 17,017 39,413 41,277
Deferred income taxes 543 555 1,086 1,110
Changes in operating assets
and liabilities:
Accounts receivable (6,931) (12,029) 11,834 (5,390)
Inventory 1,728 (6,962) 5,921 (7,435)
Receivables from
distributors (1,114) (5,943) (11,102) (13,512)
Prepaid expenses and other
current assets 338 18,752 14,594 9,579
Other long-term assets 2,143 (11,855) 5,399 (14,779)
Accounts payable and
accrued expenses 19,278 (3,300) (97,463) (51,111)
Accrued interest 11,938 12,466 53 703
Deferred revenue 12,163 38,538 26,875 60,269
Other long-term
liabilities 4,305 1,543 (712) 9,245
Net cash provided by
(used in) operating
activities 8,211 (55,900) (131,081) (189,847)
Cash flows from investing
activities:
Additions to property and
equipment (34,473) (24,131) (73,698) (36,589)
Sales of property and
equipment - 1 - 97
Purchases of restricted and
other investments - - (3,000) (310)
Sale of investments - - 5,000 -
Merger related costs (4,825) - (14,843) -
Sales of available-for-sale
securities (4) (4) 4 10,846
Net cash (used in)
investing activities (39,302) (24,134) (86,537) (25,956)
Cash flows from financing
activities:
Long term borrowings (625) 250,000 (1,250) 250,000
Debt issuance costs - (4,801) - (4,801)
Proceeds from exercise of
stock options (659) 422 181 1,932
Net cash (used in)
provided by financing
activities (1,284) 245,621 (1,069) 247,131
Net (decrease) increase in
cash and cash equivalents (32,375) 165,587 (218,687) 31,328
Cash and cash equivalents at
the beginning of period 252,508 259,162 438,820 393,421
Cash and cash equivalents at
the end of period $220,133 $424,749 $220,133 $424,749
FOOTNOTES TO PRESS RELEASE AND TABLES FOR NON-GAAP FINANCIAL MEASURES
This press release, including the selected financial information above, includes the following non-GAAP financial measures: average monthly churn; SAC per gross subscriber addition; customer service and billing expenses per average subscriber; free cash flow; average monthly revenue per subscriber, or ARPU; adjusted loss from operations; adjusted net loss; and adjusted net loss per share. The definitions and usefulness of such non-GAAP financial measures are as follows (dollars in thousands, unless otherwise stated):
(1) SIRIUS defines average monthly churn as the average amount of deactivations for the quarter divided by the average subscriber balance for the quarter.
(2) SIRIUS defines SAC per gross subscriber addition as subscriber acquisition costs and margins from the direct sale of SIRIUS radios and accessories, excluding stock-based compensation, divided by the number of gross subscriber additions for the period. SAC per gross subscriber addition is calculated as follows:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Subscriber acquisition
costs $81,392 $105,665 $171,216 $205,782
Less: stock-based
compensation - (7) (14) (1,887)
Add: margin from
direct sales of SIRIUS
radios and accessories (1,309) 1,131 215 2,917
SAC $80,083 $106,789 $171,417 $206,812
Gross subscriber
additions 1,029,287 1,002,145 2,032,709 1,990,603
SAC per gross
subscriber $78 $107 $84 $104
(3) SIRIUS defines customer service and billing expenses per average subscriber as total customer service and billing expenses, excluding stock-based compensation, divided by the daily weighted average number of subscribers for the period. Customer service and billing expenses per average subscriber is calculated as follows:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Customer service and
billing expenses $22,865 $21,618 $49,786 $43,471
Less: stock-based
compensation (265) (178) (541) (377)
Customer service and
billing expenses,
as adjusted $22,600 $21,440 $49,245 $43,094
Daily weighted average
number of subscribers 8,739,766 6,811,750 8,593,054 6,554,943
Customer service and
billing expenses,
as adjusted, per
average subscriber $0.86 $1.05 $0.96 $1.10
(4) SIRIUS defines free cash flow as cash flow from operating activities, capital expenditures and restricted and other investment activity. Free cash flow is calculated as follows:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Net cash provided by (used
in) operating activities $8,211 $(55,900) $(131,081) $(189,847)
Additions to property and
equipment (34,473) (24,131) (73,698) (36,589)
Merger related costs (4,825) - (14,843) -
Sales of investments - - 5,000 -
Restricted and other
investment activity - - (3,000) (310)
Free cash flow $(31,087) $(80,031) $(217,622) $(226,746)
(5) SIRIUS defines ARPU as the total earned subscriber revenue and net advertising revenue divided by the daily weighted average number of subscribers for the period. ARPU is calculated as follows:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Subscriber revenue $266,518 $209,635 $522,158 $400,431
Net advertising revenue 8,332 9,177 16,740 15,898
Total subscriber and net
advertising revenue $274,850 $218,812 $538,898 $416,329
Daily weighted average
number of subscribers 8,739,766 6,811,750 8,593,054 6,554,943
ARPU $10.49 $10.71 $10.45 $10.59
So Sirius continued to prove that it's management outperformed XM yet the ass wipe that flew XMSR into the ground (Parsons) gets promoted in the new company. Remember folks that Parsons supported Panero 150% as that jackass botched the company.
As for me, if Parsons continues, I'm out 100% if Mel leaves. It would take Parsons but a few months to fuck up SIXM just as he did with XMSR.
Good results there...
8.735 million average subscribers for the quarter.
Pre-SAC operating expenses after expensing churn declined slightly from Q1, for the second time that this "line" decreased for two quarters running (the previous time was Q2 & Q3 of 06, where the Q1-Q2 decline was somewhat due to Stern compensation. Per average subscriber, that came to $37.69 per quarter. On a trailing twelve month basis the figure is $39.93, which has seen unbroken declines since Q106 (again, the Stern compensation quarter) and had unbroken declines for a couple of years before that. Sirius is delivering on the promise of a largely fixed cost base.
Subscriber and advertising revenue per subscriber quarter saw growth to $31.46 from $31.27 in the previous quarter, while declining from Q207's $32.13. I'd attribute that largely to changes in the OEM sub mix: proportionally more self-payers & more on-the-road promos & less zero-revenue parking lot subs (since Chrysler and Ford both cut production while cars continued to sell at some pace off of lots). Still, the cost of maintaining a subscriber-quarter was $6.23 more than the revenue generated from that sub-quarter, while a year ago, it was $9.79 more.
Onto the regression-derived figures...
Marginal growth-adjusted operating expenses per subscriber-quarter regress to $19.04 (versus the XM side's $43.89). The merged company's blended marginal cost per subscriber-quarter comes out to $30.07, yielding about the price of a SIRI share in marginal profit per subscriber quarter.
THis is the beginning of a great company ,all uphill from here...
This was all prior to the "merge" MONOPOLY scheme was approved, these numbers mean nothing. Since we've seen the value drop, and the churn is yet to be counted. Educated consumers will not deal with a MONOPOLY. Neither will the automakers as we see more and more upgrading to HD Radio.
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Growth of high definition radio developer iBiquity Digital triggers move to Auburn Hills
by Carol Marshall | Oakland Business Review
Thursday August 07, 2008, 6:20 AM
iBiquity Digital Corp.'s Michigan automotive sales office is growing fast as it projects a surge in demand for high-definition, or HD, radio. Growth expectations triggered the company's move from its Pontiac office to a larger space in Auburn Hills.
iBiquity is the developer of HD radio technology, which it licenses to radio manufacturers such as Delphi, Visteon, Alpine, Kenwood, Yamaha and Panasonic.
The number of HD radio stations grew from 11 in 2002 to 1,500 in 2007, creating demand for receivers. Some manufacturers' HD radio receivers' prices have dipped to the $100 neighborhood, putting them in a position of being able to market to a wider range of buyers. Radiosophy began selling a receiver for less than $50 and Coby produces a tuner for less than $100. Receivers are available at retailers such as Best Buy and ABC Warehouse.
Thus, iBiquity, with 2007 sales estimated at $9.3 million by Hoovers Inc., vaults into a position to market itself to a broader audience.
Here in Michigan, the Columbia, Md., company has put a strong focus on automakers and the automotive aftermarket. Ford Motor Co. in January announced that starting in 2009 it will include HD radio technology in its Ford, Lincoln and Mercury vehicles. The company now offers HD radio receivers as dealer-installed options on most of its vehicle.
BMW was the first to offer it as a factory-installed option, and was followed in 2007 by MINI USA. Scion and Mercedes have announced that HD radio technology will be included in those vehicles, and Jaguar, Hyundai and Volvo are offering or including it as standard.
Jeff McGannon, iBiquity vice president of OEM business development, calls the auto manufacturers partners, although none of them are direct customers.
"The majority of my group's job is to work with the automakers and help them deploy HD into their radios in a much quicker time frame," McGannon said. He described HD radio as CD-quality sound, while listeners who have digital radios can listen for free. There are 23 stations in Michigan that broadcast in HD radio now, and 16 of those are multicast stations.
"Multicasting simply means that a radio station can have its main station, like '98.7 Smooth Jazz,' and can also have its HD radio station, which is 98.7 HD2. On that station, they broadcast what I call true jazz. And WRIF has its main station, then WRIF HD2, which has more local content bands," McGannon said. "That gives them a real cool ability to program some real content."
iBiquity launched digital radio soon after, improving AM signals and allowing FM stations to broadcast up to four channels on the same frequency.
Since 2002, when the first HD radio stations began airing programming, iBiquity has had no competitors in the United States and was selected by the FCC to develop a digital system for AM and FM broadcasting, McGannon said.
The National Association of Broadcasters followed iBiquity's lead and lobbied car companies and radio retailers to put digital radios in cars and on store shelves, with some success.
Station managers and owners are promoting digital radio.
Kernen believes, as more stations provide special programming on the digital frequencies available to them, that it won't take long before consumers do tune in and start to buy receivers and bring the price down further.
Advertisers could follow, as they have done for specialty cable television programming, which enables them to market to target audiences who watch shows on stations such as Home and Garden Television.
"If you're Lowe's or Home Depot, you won't get the audience on HGTV that you would advertising during 'Desperate Housewives,' but those viewers watching Home and Garden are a goldmine," Kernen said.
As radio stations market digital content, McGannon said his vision is for all radio - digital and analog - to just become digital.
"My goal is for no one to have to ask to buy a digital radio. They'll just buy a radio, much the same way no one ever asks to buy a color television. They just buy a TV," McGannon said.
Though HD radio isn't at that point yet, and isn't going to reach that point in the immediate future, it is still growing fairly rapidly, particularly in the last three years.
"In 2000, we had no one in Detroit. We started with a small staff of three people, and now we're up to nine, and we'll add a couple more this year, and next year we'll add three to five people to our staff," McGannon said.
To keep up with the growth, the company is moving from its office at Centrepoint Parkway in Pontiac, where it has been for five years, to 5,000 square feet in Concorde Center at 691 N. Squirrel Rd. in Auburn Hills.
"This company could be huge," said Matt Osiecki of CB Richard Ellis, who represented iBiquity in its five-year lease. "They're not necessarily auto related so they're not as affected by the local economy as much. They don't manufacture here - it's service based. And everything is going HD so this company is going to grow."
"Neither will the automakers as we see more and more upgrading to HD Radio."
Let's see - Ford is an investor in iBiquity and owns failing Volvo and Jaguar. Besdies that, only a handful are offering HD Radio as an option. Ford's target is 70% Satrad, standard Satrad in Canada, plus standard/optional Sync. HD Radio is still optional in Fords. Now, if Ford really believed in HD Radio, they would be making it standard, and dealing with the costs of the chipsets and installation fees.
"Ford Gets More Sirius"
"Sirius Satellite Radio and Ford announced today that they are targeting a 70% installation rate for the Ford and Mercury brand of automobiles. Ford had previously announced that their Lincoln brand was effectively at standard equipment. This commitment with the Ford and Mercury brands is a substantial step for Sirius, as it brings Ford up to a similar installation pace as Chrysler."
http://siriusbuzz.com/ford-gets-more-sirius.php
"Ford to make Sirius Factory Standard in Canada"
"Here's some incredible news for Sirius Canada: Ford of Canada has announced that they will make Sirius Satellite Radio a factory-standard feature in virtually all Fords sold in Canada, by the end of 2007. That's a total of 20 vehicle lines. Absolutely great news, and hopefully a sign of things to come for the U.S."
http://www.orbitcast.com/archives/ford-to-make-sirius-factory-standard-in-canada.html
"Ford SYNC, HD Radio and the state of competition"
"Now here's the killer: Ford is making SYNC available as a factory-installed option for just over $300. And for the top-end trim levels, like the Focus SES, it'll be a standard feature."
http://www.orbitcast.com/archives/ford-sync-hd-radio-and-the-state-of-competition.html
See, Ford faked out iBiquity the first time, so iBiquity is probably calling Ford on it's HD Radio contract - I bet that Ford really regrets getting mixed up in this flawed, destructive technology which doesn't even work. There will be more and more complaints from auto purchasers, so at some point, all of this is going to catch up to iBiquity.
"DEAD AIR: Radio’s Great Leap Forward stalling in the Valley"
"Nearly two years after the Valley’s four Clear Channel stations went HD, several high-end car manufacturers have promised to offer HD radios as an option on new models. But while Ford announced in September that it offers the radios as dealer-installed upgrades — as have Mini, Volvo, Jaguar and BMW — local Ford and Lincoln dealers had not heard of HD and said they don’t offer the option."
http://www.themonitor.com/news/radio_7098___article.html/digital_new.html
Pocketradio with more re-posted, yet prior DEBUNKED, fearful and desperate HD Radio FUD.
Served LIABLE for that FUD filled joke of a blog yet?
Sorry Pocketradio your fearful and desperate FUD only effect the uneducated like yourself.
Pocketradio - TROLL
Pocketradio - DEBUNKED
"Served LIABLE for that FUD filled joke of a blog yet?"
The blog just organizes and regurgitates newspaper articles and other peoples' blogs - there is nothing libelous, or tortuous about the blog. Comments are not allowed, no peronal information has ever been posted, I have never posted a personal opinion, and references to any articles/blogs are always given. I have spoken with a lawyer, and the blog stays. We would, of course, file an immediate suit for violation of my First Amendment rights, for millions. The blog has been posted for over a year, and you have been threatening me for about a month, yet no certified letters, yet. I would look forward to that day, as we will put IBOC on trial for destroying community-based radio. Witnesses would include Bob Savage, Watt Hairston, Jerry Aronld, Leonard Kahn, officials from the Enforcement Bureau at the FCC to explain why they have ignored Bob Savage's compliants of interference, other RF engineers, and of course, NPR to explain why they are against the proposed 10db power increase for FM-HD. Now, if iBiquity wants to explain all of this in court, be my guest. Of course, I would contact all of the local media, in order to cover any court proceedings. iBiquity would spend millions, just to recover a few thousand, while I would stand to gain tens-of-millions, and be able to expose IBOC for the fraud that it is.
WRONG,
At the completion of your trial the fed's would have another nut job locked up and web sites around the net would have to carry on without HD Radio's #1 blind, ignorant, DEBUNKED, TROLL Pocketradio.
You should be served liable soon.
Pocketradio - TROLL
Pocketradio - DEBUNKED
"You should be served liable soon."
You've been threatening me for a month, now. You still have not responded with my name, address, and phone number. There is nothing libelous, or tortous about my blog. Get a life.
By the way, the correct spelling is, "libel."
By the way, the correct spelling is, "libel."
THATS FUNNY!!!!!!!!!!!!!!!!!!!
No ignorant troll it's liable.
http://www.nolo.com/definition.cfm/Term/A9E08CA9-C850-47C4-B91FE65AA90FA08B/alpha/L/
liable
Legally responsible. For example, a person may be liable for a debt, liable for an accident due to careless behavior, liable for failing do something required by a contract or liable for the commission of a crime. Someone who is found liable for an act or ommission must usually pay damages or, if the act was a criminal one, face punishment. See also liability.
Pocketradio = TROLL
Pocketradio = DEBUNKED