- Revenue: $241.8 million (up 45% y/y/)
- Net Income: $120.1 million loss (down 26% y/y)
- EPS: -8 cents (matching Street consensus)
- Net Subscriber Additions: 524,938 (up 19% y/y)
- Total Subscribers: 7.7 million (up 50% y/y)
Subscriber growth (most important metric) solid. Revenue missed Street consensus by just a hair — $2.5 million or about 1%. Smaller net loss is obviously good news. Subscriber acquisition costs dropped almost 10% y/y — not bad. ARPU down 4% — not good. $362 million cash left. SIRI growing faster than XMSR and lower churn than XM, but as Henry Blodget said last week, pray hard that merger is approved.
Conference call live notes after the jump.
- 8:07 An “exciting” announcement with Ford shortly
- 8:08 NPD Share 64%, up 100% since pre-Stern
- 8:09 Monthly “all-in” churn rate 2.1% Low end of full-year churn guidance of 2.2%-2.4%
- 8:12 Expect positive free cash flow for Q4
- 8:15 Reiterating guidance, ending subs 8 million, rev. approaching 1 billion
- 8:16 Merger update. “Pleased” with public comments.
- 8:19 Expect it to close at end of year. “Vote!”
- 8:19 Q&A.
- 8:20 Early reaction to video product “very positive” but not enough subs to do any market research. Revenue too small to be measurable.
- 8:22 OEM penetration expanding… around 11% of base. “Not really” seasonal, will vary with car shipping cycle.
- 8:24 Could Sirius get in with GM if their XM deal dies? Mel: Would have to be an alternate service, very unlikely. OEMs have not been switching around.
- 8:26 Ford “very committed” to satellite radio. Penetration number to come.
- 8:29 “Can’t” look at XM’s business details too much while dealing with regulatory hoops.
- 8:31 Non-update on retail plans. “Very excited” … “more similar promotions” as in prior years but fewer mail-in rebates this year replaced by instant rebates with lower values.
- 8:34 Production capability now built so R&D spend down.
- 8:35 How does OEM growth impact retail aftermarket? “Perplexed” as to why retail is as slow as it is. Retail partners expecting a good Christmas. “We hope that they’re right!”
- 8:39 Two more!
- 8:39 How quickly could you close after getting regulatory approval? We believe FCC will make decision before end of year. Consistent with ‘180 days’ guidance. Heard comments from chairman that he hopes to get it done within that timeframe. Plan to close next-day.
- 8:40 Projected cash flow break-even with or without a merger.
- 8:41 New chief retention officer from Sprint helping keep churn low. Getting consumer to pre-set channels has positive impact. The more they’re engaged with radio, the happier they tend to be.
- 8:43 Don’t expect to give an OEM conversion rate. Don’t know how those numbers can be helpful in modelling without going into ridiculous level of detail. Will continue to report total churn.
- 8:45 Call over.
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