Virgin Mobile USA (VM) Q3: Sales Up, Growth Down

Virgin Mobile USA (VM) reported quarterly results for the first time as a public company. Overall: not great. Release

Key points:

  • Revenue: $301.4 million, up 25% year-over-year, but missed $318.5 million Street consensus
  • Net loss widened to $7.3 million, from $5.1 million a year ago
  • Gross subscriber additions: 760,000, up 14% y/y
  • Net subscriber additions down almost 50% y/y, from 88,000 3Q06 to 46,000 3Q07
  • Churn flat at 4.9%. Still not a good sign that they are signing up 760,000 people (gross adds) to their service in Q3 and losing 714,000 (gross adds minus net adds).
  • ARPU up slightly to $20.59
  • Customer acquisition costs flat at $127
  • Ended quarter with 4,876,217 subs, compared to 3,960,338 last year.

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