XM Satellite Radio’s Q3 was nothing to write home about:
- Only 20% revenue growth in an emerging business with low penetration
- Business model transitioning from “retail” to more expensive (and presumably less profitable) OEM strategy, because retail sucking wind.
- Cost per subscriber acquisition increasing almost as fast as revenue–19% year over year.
- Churn 2.5% per month: 952,000 gross ads yielded only 315,000 net adds.
- Ballooning adjusted EBITDA loss, even excluding merger costs ($45 million vs. $2 million, with only $9 million merger-related.
- Rapidly declining cash balance (down $44 million) and only $231 million of cash left.
- No news on the merger other than the usual “cooperating”
This is not a healthy company. Shareholders had better pray that the Sirius (SIRI) merger goes through. Release
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