Sirius Satellite Radio announces 2Q07 results, growth continues
Tuesday, July 31, 2007 at 7:13 AM
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Sirius Satellite Radio (SIRI) announced their 2Q06 earnings results, showing a 51% increase in revenue year-over-year to $226.4 million, and strong subscriber growth of 561,493 new subscribers during the quarter.
Sirius ended the quarter with over 7,142,538 subscribers.
During 2Q07, Sirius added 561,493 net subscribers, comprised of 129,843 net additions from retail/aftermarket channels and 431,650 from the OEM channel. Sirius captured 62% of satellite radio segment share, marking the seventh consecutive quarter of leading subscriber growth in satellite radio.
Total revenue increased to a record $226.4 million, up 51% from $150.1 million YoY. Advertising revenue was $9.2 million. ARPU was $10.71. SAC was $108 for the quarter compared to $131 for the same period last year.
Sirius' net loss improved by 44% to ($134.1) million for the, from ($237.8) million for the same period last year. The adjusted net loss for second quarter 2007 (adjusted to exclude stock-based compensation) improved to ($117.1) million down from ($159.6) million for Q2 2006.
2007 Guidance:
- Total revenue approaching $1 billion
- Over 8 million subs
- Avg churn to 2.2% - 2.4%
- SAC approaching $100
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
SUBSCRIBER DATA, METRICS
AND OTHER NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, unless otherwise stated)
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
Beginning subscribers 6,581,045 4,077,747 6,024,555 3,316,560
Net additions 561,493 600,460 1,117,983 1,361,647
Ending subscribers 7,142,538 4,678,207 7,142,538 4,678,207
Retail 4,364,646 3,276,615 4,364,646 3,276,615
OEM 2,758,639 1,373,610 2,758,639 1,373,610
Hertz 19,253 27,982 19,253 27,982
Ending subscribers 7,142,538 4,678,207 7,142,538 4,678,207
Retail 129,843 276,294 322,821 811,252
OEM 434,955 324,574 799,629 549,917
Hertz (3,305) (408) (4,467) 478
Net additions 561,493 600,460 1,117,983 1,361,647
Metrics
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
Gross subscriber
additions 1,002,145 830,571 1,990,603 1,791,181
Deactivated
subscribers 440,652 230,111 872,620 429,534
Average monthly
churn (1)(6) 2.1% 1.8% 2.2% 1.8%
SAC per gross
subscriber addition
(2)(6) $ 108 $ 131 $ 106 $ 122
Customer service and
billing expenses
per average subscriber
(3)(6) $1.05 $1.20 $1.10 $1.36
Total revenue $ 226,427 $ 150,078 $ 430,464 $ 276,742
Free cash flow (4)(6) $(80,031) $(133,231) $(226,746) $(298,768)
Monthly ARPU:
Average monthly
subscriber revenue
per subscriber before
the effects of Hertz
subscribers and
mail-in rebates $10.24 $10.64 $10.26 $10.66
Effects of Hertz
subscribers 0.05 0.05 0.05 0.04
Effects of mail-in
rebates (0.03) (0.15) (0.13) (0.35)
Average monthly
subscriber revenue
per subscriber 10.26 10.54 10.18 10.35
Average monthly net
advertising revenue
per subscriber 0.45 0.62 0.41 0.63
ARPU $10.71 $11.16 $10.59 $10.98
SIRIUS SATELLITE 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,
2007 2006 2007 2006
Net loss $(134,147) $(237,828) $(278,892) $(696,372)
Impairment loss - 10,917 - 10,917
Depreciation 26,284 25,738 53,070 50,671
Stock-based
compensation 17,017 67,289 41,277 351,875
Other income and
expense 10,992 6,778 20,137 18,400
Income tax expense 555 578 1,110 1,331
Adjusted loss from
operations (7) $(79,299) $(126,528) $(163,298) $(263,178)
Adjusted Net Loss and
Adjusted Net Loss per Share:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
Net loss $(134,147) $(237,828) $(278,892) $(696,372)
Impairment loss - 10,917 - 10,917
Stock-based
compensation 17,017 67,289 41,277 351,875
Adjusted net loss $(117,130) $(159,622) $(237,615) $(333,580)
Net loss per share
(basic and diluted) $(0.09) $(0.17) $(0.19) $(0.50)
Impairment loss - 0.01 - 0.01
Stock-based
compensation 0.01 0.05 0.03 0.25
Adjusted net loss per
share (basic and
diluted) (8) $(0.08) $(0.11) $(0.16) $(0.24)
Weighted average common
shares outstanding
(basic and diluted) 1,462,362 1,404,022 1,459,701 1,395,549
SIRIUS SATELLITE 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,
2007 2006 2007 2006
Total revenue $226,427 $150,078 $430,464 $276,742
Operating expenses
(excludes depreciation
and stock-based
compensation shown
separately below):
Satellite and
transmission 6,716 17,686 14,046 24,987
Programming and content 53,096 44,898 110,159 94,832
Revenue share and royalties 29,841 16,958 56,975 30,485
Customer service and billing 21,440 15,662 43,094 33,280
Cost of equipment 8,636 3,467 17,928 6,932
Sales and marketing 42,765 47,764 75,283 80,043
Subscriber acquisition costs 105,658 108,663 203,895 217,807
General and administrative 27,308 19,650 50,711 37,017
Engineering, design
and development 10,266 12,775 21,671 25,454
Depreciation 26,284 25,738 53,070 50,671
Stock-based compensation 17,017 67,289 41,277 351,875
Total operating expenses 349,027 380,550 688,109 953,383
Loss from operations (122,600) (230,472) (257,645) (676,641)
Other income (expense) (10,992) (6,778) (20,137) (18,400)
Loss before income taxes (133,592) (237,250) (277,782) (695,041)
Income tax expense (555) (578) (1,110) (1,331)
Net loss $(134,147) $(237,828) $(278,892) $(696,372)
SIRIUS SATELLITE 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 Ended
March 31, June 30, September 30, December 31,
2006 2006 2006 2006
Total revenue $126,664 $150,078 $167,113 $193,380
Operating expenses
(excludes depreciation
and stock-based
compensation shown
separately below):
Satellite and transmission 7,301 17,686 7,090 7,152
Programming and content 49,934 44,898 48,039 55,779
Revenue share and
royalties 13,527 16,958 18,371 21,062
Customer service and billing 17,618 15,662 16,625 25,745
Cost of equipment 3,465 3,467 6,196 22,105
Sales and marketing 32,279 47,764 30,981 73,115
Subscriber acquisition
costs 109,144 108,663 80,863 121,046
General and administrative 17,367 19,650 21,610 21,398
Engineering, design
and development 12,679 12,775 20,491 12,787
Depreciation 24,933 25,738 27,583 27,495
Stock-based
compensation 284,586 67,289 43,418 42,625
Total operating expenses 572,833 380,550 321,267 430,309
Loss from operations (446,169) (230,472) (154,154) (236,929)
Other income (expense) (11,622) (6,778) (8,166) (8,512)
Loss before income taxes (457,791) (237,250) (162,320) (245,441)
Income tax expense (753) (578) (578) (156)
Net loss $(458,544) $(237,828) $(162,898) $(245,597)
Condensed Consolidated Statements of Operations:
For the Year Ended
December 31, 2006
Total revenue $637,235
Operating expenses (excludes depreciation
and stock-based compensation shown
separately below):
Satellite and transmission 39,229
Programming and content 198,650
Revenue share and royalties 69,918
Customer service and billing 75,650
Cost of equipment 35,233
Sales and marketing 184,139
Subscriber acquisition costs 419,716
General and administrative 80,025
Engineering, design and development 58,732
Depreciation 105,749
Stock-based compensation 437,918
Total operating expenses 1,704,959
Loss from operations (1,067,724)
Other income (expense) (35,078)
Loss before income taxes (1,102,802)
Income tax expense (2,065)
Net loss $(1,104,867)
In the first quarter of 2007, SIRIUS reclassified both broadcast and webstreaming royalties from programming and content expenses and revenue share from programming and content expenses and sales and marketing expenses to a separate line item, revenue share and royalties. In addition, SIRIUS reclassified bad debt expense from general and administrative expenses to customer service and billing expenses. Certain amounts in the prior period annual and quarterly consolidated financial statements have been reclassified to conform to the current period presentation. Included above are the non- GAAP condensed consolidated statements of operations for 2006 that reflects these reclassifications.
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
For the Three Months
Ended June 30,
2007 2006
Revenue:
Subscriber revenue, including
effects of mail-in rebates $209,635 $137,641
Advertising revenue, net of agency fees 9,177 8,125
Equipment revenue 6,255 3,096
Other revenue 1,360 1,216
Total revenue 226,427 150,078
Operating expenses (excludes depreciation
shown separately below) (1):
Cost of services:
Satellite and transmission 7,337 18,496
Programming and content 54,311 68,622
Revenue share and royalties 29,841 16,958
Customer service and billing 21,618 15,866
Cost of equipment 8,636 3,467
Sales and marketing 45,614 52,831
Subscriber acquisition costs 105,665 130,563
General and administrative 38,471 32,555
Engineering, design and development 11,250 15,454
Depreciation 26,284 25,738
Total operating expenses 349,027 380,550
Loss from operations (122,600) (230,472)
Other income (expense):
Interest and investment income 4,753 8,873
Interest expense, net of amounts
capitalized (15,750) (15,660)
Equity in net loss of affiliate - -
Other income 5 9
Total other income (expense) (10,992) (6,778)
Loss before income taxes (133,592) (237,250)
Income tax expense (555) (578)
Net loss $(134,147) $(237,828)
Net loss per share (basic and diluted) $(0.09) $(0.17)
Weighted average common shares
outstanding (basic and diluted) 1,462,362 1,404,022
(1) Amounts related to stock-based
compensation included in other
operating expenses were as follows:
Satellite and transmission $621 $810
Programming and content 1,215 23,724
Customer service and billing 178 204
Sales and marketing 2,849 5,067
Subscriber acquisition costs 7 21,900
General and administrative 11,163 12,905
Engineering, design and development 984 2,679
Total equity granted to third
parties and employees $17,017 $67,289
For the Six Months
Ended June 30,
2007 2006
Revenue:
Subscriber revenue, including
effects of mail-in rebates $400,431 $252,822
Advertising revenue, net of agency fees 15,898 15,463
Equipment revenue 10,926 6,788
Other revenue 3,209 1,669
Total revenue 430,464 276,742
Operating expenses (excludes depreciation
shown separately below) (1):
Cost of services:
Satellite and transmission 15,323 26,699
Programming and content 114,309 368,356
Revenue share and royalties 56,975 30,485
Customer service and billing 43,471 33,728
Cost of equipment 17,928 6,932
Sales and marketing 83,776 87,312
Subscriber acquisition costs 205,782 249,606
General and administrative 73,814 64,428
Engineering, design and development 23,661 35,166
Depreciation 53,070 50,671
Total operating expenses 688,109 953,383
Loss from operations (257,645) (676,641)
Other income (expense):
Interest and investment income 10,795 18,810
Interest expense, net of amounts
capitalized (30,942) (32,784)
Equity in net loss of affiliate - (4,445)
Other income 10 19
Total other income (expense) (20,137) (18,400)
Loss before income taxes (277,782) (695,041)
Income tax expense (1,110) (1,331)
Net loss $(278,892) $(696,372)
Net loss per share (basic and diluted) $(0.19) $(0.50)
Weighted average common shares
outstanding (basic and diluted) 1,459,701 1,395,549
(1) Amounts related to stock-based
compensation included in other
operating expenses were as follows:
Satellite and transmission $1,277 $1,712
Programming and content 4,150 273,524
Customer service and billing 377 448
Sales and marketing 8,493 7,269
Subscriber acquisition costs 1,887 31,799
General and administrative 23,103 27,411
Engineering, design and development 1,990 9,712
Total equity granted to third
parties and employees $41,277 $351,875
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
BALANCE SHEET DATA
(Dollars in thousands)
As of
June 30, 2007 December 31, 2006
(Unaudited)
Cash, cash equivalents and
marketable securities $429,403 $408,921
Restricted investments 78,160 77,850
Working capital (142,176) (257,799)
Total assets 1,688,272 1,658,528
Long-term debt 1,315,339 1,068,249
Total liabilities 2,227,748 2,047,599
Accumulated deficit (4,112,612) (3,833,720)
Stockholders' deficit (539,476) (389,071)
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
For the Three Months
Ended June 30,
2007 2006
Cash flows from operating activities:
Net loss $(134,147) $(237,828)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 26,284 25,738
Non-cash interest expense 805 786
Provision for doubtful accounts 2,266 2,003
Non-cash equity in net loss of affiliate - -
(Gain) loss on disposal of assets 110 320
Impairment loss - 10,917
Stock-based compensation 17,017 67,289
Deferred income taxes 554 578
Changes in operating assets and liabilities:
Accounts receivable (12,029) (966)
Inventory (6,962) (9,656)
Receivables from distribution partners (5,943) 2,864
Prepaid expenses and other
current assets 18,752 (16,588)
Other long-term assets (11,855) (25,667)
Accounts payable and accrued expenses (3,300) 29,234
Accrued interest 12,466 11,620
Deferred revenue 38,538 29,389
Other long-term liabilities 1,544 1,052
Net cash used in operating activities (55,900) (108,915)
Cash flows from investing activities:
Additions to property and equipment (24,131) (22,284)
Sales of property and equipment 1 71
Purchases of restricted and other
investments - (2,032)
Purchases of available-for-sale
securities - (36,900)
Sales of available-for-sale
securities (4) 72,675
Net cash (used in) provided
by investing activities (24,134) 11,530
Cash flows from financing activities:
Long term borrowings, net of related costs 245,199 -
Proceeds from exercise of stock options 422 1,517
Net cash provided by
financing activities 245,621 1,517
Net (decrease) increase in cash and
cash equivalents 165,587 (95,868)
Cash and cash equivalents at the
beginning of period 259,162 630,831
Cash and cash equivalents at the
end of period $424,749 $534,963
For the Six Months
Ended June 30,
2007 2006
Cash flows from operating activities:
Net loss $(278,892) $(696,372)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 53,070 50,671
Non-cash interest expense 1,559 1,547
Provision for doubtful accounts 4,354 3,780
Non-cash equity in net loss of affiliate - 4,445
(Gain) loss on disposal of assets 106 541
Impairment loss - 10,917
Stock-based compensation 41,277 351,875
Deferred income taxes 1,109 1,331
Changes in operating assets and liabilities:
Accounts receivable (5,390) 8,986
Inventory (7,435) (10,854)
Receivables from distribution partners (13,512) (5,823)
Prepaid expenses and other
current assets 9,579 (29,659)
Other long-term assets (14,779) (25,088)
Accounts payable and accrued expenses (51,111) (15,986)
Accrued interest 703 1,160
Deferred revenue 60,269 73,847
Other long-term liabilities 9,246 8,595
Net cash used in operating activities (189,847) (266,087)
Cash flows from investing activities:
Additions to property and equipment (36,589) (27,780)
Sales of property and equipment 97 123
Purchases of restricted and other
investments (310) (4,901)
Purchases of available-for-sale
securities - (108,500)
Sales of available-for-sale
securities 10,846 177,125
Net cash (used in) provided
by investing activities (25,956) 36,067
Cash flows from financing activities:
Long term borrowings, net of related costs 245,199 -
Proceeds from exercise of stock options 1,932 2,976
Net cash provided by
financing activities 247,131 2,976
Net (decrease) increase in cash and
cash equivalents 31,328 (227,044)
Cash and cash equivalents at the
beginning of period 393,421 762,007
Cash and cash equivalents at the
end of period $424,749 $534,963
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 number of deactivated
subscribers divided by average quarterly subscribers.
(2) SIRIUS defines SAC per gross subscriber addition as subscriber
acquisition costs, excluding stock-based compensation, and margins
from the direct sale of SIRIUS radios and accessories 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,
2007 2006 2007 2006
Subscriber acquisition
costs $ 105,665 $ 130,563 $ 205,782 $ 249,606
Less: stock-based
compensation (7) (21,900) (1,887) (31,799)
Add: margin from direct
sales of SIRIUS radios
and accessories 2,381 371 7,002 144
SAC $ 108,039 $ 109,034 $ 210,897 $ 217,951
Gross subscriber
additions 1,002,145 830,571 1,990,603 1,791,181
SAC per gross
subscriber addition $ 108 $ 131 $ 106 $ 122
(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,
2007 2006 2007 2006
Customer service and
billing expenses $21,618 $15,866 $43,471 $33,728
Less: stock-based
compensation (178) (204) (377) (448)
Customer service and
billing expenses,
as adjusted $21,440 $15,662 $43,094 $33,280
Daily weighted average
number of
subscribers 6,811,750 4,354,447 6,554,943 4,070,075
Customer service and
billing expenses, as
adjusted, per
average subscriber $1.05 $1.20 $1.10 $1.36
(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,
2007 2006 2007 2006
Net cash used in
operating activities $(55,900) $(108,915) $(189,847) $(266,087)
Additions to property
and equipment (24,131) (22,284) (36,589) (27,780)
Restricted and other
investment activity - (2,032) (310) (4,901)
Free cash flow $(80,031) $(133,231) $(226,746) $(298,768)
(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,
2007 2006 2007 2006
Subscriber revenue $209,635 $137,641 $400,431 $252,822
Net advertising
revenue 9,177 8,125 15,898 15,463
Total subscriber and
net advertising
revenue $218,812 $145,766 $416,329 $268,285
Daily weighted
average number
of subscribers 6,811,750 4,354,447 6,554,943 4,070,075
ARPU $10.71 $11.16 $10.59 $10.98
(6) SIRIUS believes average monthly churn; SAC per gross subscriber
addition; customer service and billing expenses per average
subscriber; free cash flow; and ARPU provide meaningful information
regarding operating performance and liquidity and are used for
internal management purposes; when publicly providing the business
outlook; as a means to evaluate period-to-period comparisons; and to
compare the company's performance to that of its competitors. SIRIUS
also believes that investors use current and projected metrics to
monitor performance of the business and make investment decisions.
SIRIUS believes the exclusion of stock-based compensation expense in
the calculations of SAC per gross subscriber addition and customer
service and billing expenses per average subscriber is useful given
the significant variation in expense that can result from changes in
the fair market value of SIRIUS common stock, the effect of which is
unrelated to the operational conditions that give rise to variations
in the components of subscriber acquisition costs and customer service
and billing expenses. Specifically, the exclusion of stock-based
compensation expense in the calculation of SAC per gross subscriber
addition is critical in being able to understand the economic impact
of the direct costs incurred to acquire a subscriber and the effect
over time as economies of scale are reached.
These non-GAAP financial measures are used in addition to and in
conjunction with results presented in accordance with GAAP. These non-
GAAP financial measures may be susceptible to varying calculations;
may not be comparable to other similarly titled measures of other
companies; and should not be considered in isolation for, or superior
to measures of financial performance prepared in accordance with GAAP.
(7) SIRIUS refers to net loss before taxes; other income (expense) -
including interest and investment income, interest expense, equity in
net loss of affiliate; depreciation; impairment charges; and stock-
based compensation expense as adjusted loss from operations. Adjusted
loss from operations is not a measure of financial performance under
GAAP. The company believes adjusted loss from operations is a useful
measure of its operating performance. The company uses adjusted loss
from operations for budgetary and planning purposes; to assess the
relative profitability and on-going performance of consolidated
operations; to compare performance from period to period; and to
compare performance to that of its competitors. The company also
believes adjusted loss from operations is useful to investors to
compare operating performance to the performance of other
communications, entertainment and media companies. The company
believes that investors use current and projected adjusted loss from
operations to estimate the current or prospective enterprise value and
make investment decisions.
Because the company funds and builds-out its satellite radio system
through the periodic raising and expenditure of large amounts of
capital, results of operations reflect significant charges for
interest and depreciation expense. The company believes adjusted loss
from operations provides useful information about the operating
performance of the business apart from the costs associated with the
capital structure and physical plant. The exclusion of interest
expense and depreciation is useful given fluctuations in interest
rates and significant variation in depreciation expense that can
result from the amount and timing of capital expenditures and
potential variations in estimated useful lives, all of which can vary
widely across different industries or among companies within the same
industry. The company believes the exclusion of taxes is appropriate
for comparability purposes as the tax positions of companies can vary
because of their differing abilities to take advantage of tax benefits
and because of the tax policies of the various jurisdictions in which
they operate. The company also believes the exclusion of stock-based
compensation expense is useful given the significant variation in
expense that can result from changes in the fair market value of the
company's common stock. Finally, the company believes that the
exclusion of equity in net loss of affiliate (SIRIUS Canada, Inc.) is
useful to assess the performance of its core consolidated operations
in the continental United States. To compensate for the exclusion of
taxes, other income (expense), depreciation, impairment charges and
stock-based compensation expense, the company separately measures and
budgets for these items.
There are material limitations associated with the use of adjusted
loss from operations in evaluating the company compared with net loss,
which reflects overall financial performance, including the effects of
taxes, other income (expense), depreciation, impairment charges and
stock-based compensation expense. The company uses adjusted loss from
operations to supplement GAAP results to provide a more complete
understanding of the factors and trends affecting the business than
GAAP results alone. Investors that wish to compare and evaluate the
operating results after giving effect for these costs, should refer to
net loss as disclosed in the unaudited consolidated statements of
operations. Since adjusted loss from operations is a non-GAAP
financial measure, the calculation of adjusted loss from operations
may be susceptible to varying calculations; may not be comparable to
other similarly titled measures of other companies; and should not be
considered in isolation, as a substitute for, or superior to measures
of financial performance in accordance with GAAP.
(8) SIRIUS refers to adjusted net loss and adjusted net loss per share as
net loss per share excluding impairment charges and stock-based
compensation expense. Adjusted net loss and adjusted net loss per
share are not measures of financial performance under GAAP. The
company believes adjusted net loss and adjusted net loss per share are
useful to investors to compare its operating performance to the
performance of other communications, entertainment and media
companies. The company believes the exclusion of impairment charges is
appropriate for comparability purposes as the existence, amount and
timing of impairment charges can vary from period to period and can
vary widely across different industries or among companies within the
same industry. The company also believes the exclusion of stock-based
compensation expense is useful given the significant variation in
expense that can result from changes in the fair market value of the
company's common stock.
There are material limitations associated with the use of adjusted net
loss and adjusted net loss per share in evaluating the company
compared with net loss and net loss per share, which reflects overall
financial performance, including the effects of impairment charges and
stock-based compensation expense. The company uses adjusted net loss
and adjusted net loss per share to supplement GAAP results to provide
a more complete understanding of the factors and trends affecting the
business than GAAP results alone. Investors that wish to compare and
evaluate the operating results after giving effect for these costs,
should refer to net loss and net loss per share as disclosed in the
unaudited consolidated financial statements of operations. Since
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I like the title Ryan. I did not know the merger was approved,I thought they were still two separate companies.
Great job SIRIUS on another fantastic quarter!!! Now only 1.15 million between SIRIUS and XM in subscribers. AMAZING!
Posted by: Sirius_minde ? | July 31, 2007 7:40 AM
Ack. I need more coffee. Sorry about the title screw up (again).
Posted by: Ryan Saghir ? | July 31, 2007 7:43 AM
WOW its getting close XM better pray for this merger
7.15 vs 8.25m 46.4% vs 53.6%
two or three more quarters at 2-3% improvement for sirius and they become #1
Posted by: PNess ? | July 31, 2007 9:12 AM
Well, minus about 1mill for unconverted subs.
Posted by: PFreak ? | July 31, 2007 9:29 AM
I really wish they would release the number of those OEM subs who have no choice in the matter (i.e. thoee who bought a new car with a 1, 3, 5 or lifetime sub but did not necessarily want it).
The only reason they would refuse to tell the public these numbers is because they make up a large portion of the so called OEM "subscribers".
I wonder how many subs XM could add if they counted every car with a free sub sold or unsold... 1 million, 1.5?
If the merger goes through, I wonder how they will report numbers, as a whole, or XM vs. Sirius still.
Posted by: MarkS ? | July 31, 2007 9:32 AM
A subscription is a subscription whether wanted or not. Besides, when I put Sirius in my wifes car she said she didn't want or need it and now she cant even remember how to switch to FM ( not that she ever wants to ). I believe anybody who gets a free trial subscription ever complains and asks for it's removal once they listen to it.
Posted by: Tim | July 31, 2007 11:40 AM
"WOW its getting close XM better pray for this merger
7.15 vs 8.25m 46.4% vs 53.6%
two or three more quarters at 2-3% improvement for sirius and they become #1"
---------
The pissing match for subs is irrevelant if they're merging. I am more concerned about the survivability of these companies.
Some disturbing trends: SIRI de-activations doubled over last year, and churn rose .3%, SAC went down, but so did ARPU. This is not good for the industry.
Posted by: SatelliteRadioFan ? | July 31, 2007 12:06 PM
Thanks for all the great work, but you have a tendency to mess up dates in financial stories -- the first sentence should reference "2Q07" not "2Q06."
Posted by: Anonymous Coward | July 31, 2007 12:37 PM
Total deactivations are going to increase as subscribers increase. The rate has increased YoY, but that's because we're starting to see OEM promos churning out.
The full churn rate decreased by roughly 20 bps from last quarter for SIRI, while it increased by about 10 bps for XMSR. Haven't seen a self-paying number yet.
Posted by: leviramsey ? | July 31, 2007 11:55 PM