by Dennis “Cos” Costa
Company Increases 2010 Guidance to Approximately 1.1 Million Net Subscriber Additions
Sirius XM Radio (NASDAQ: SIRI) today announced that it added 583,249 net subscribers during the second quarter of 2010, and raises full year guidance to ~1.1M net subscribers. This comes after the company already had adjusted its guidance on May 17, 2010 to full year net subscriber additions of over 750K, and FCF of over $100M. A year ago, the company was struggling as the automotive industry restructured and posted a net subscriber loss of (185K) in the same quarter.
The company also stated that they have added 754K net subscribers in the first half of 2010, compared to a loss of (590K) subscribers in the same period of 2009, representing a year-over-year increase of more than 1.1M net subscriber gains.
“Our subscriber results mark the best quarter of gross additions, deactivations and net additions since the merger of SIRIUS and XM in July 2008. The strong execution in both adding subscribers and retaining them resulted in our record-high 19.5 million subscriber milestone, despite continued economic uncertainty. The further improvement in our guidance reflects the attractiveness of satellite radio, but maintains a cautious outlook for continued improvement in the economy.”
Mel Karmazin, Chief Executive Officer of SIRIUS XM.
The company also released additional subscriber metrics with this announcement.
- Gross additions increased by 46% and deactivations decreased by 8% compared to the second quarter of 2009
- Self-pay churn improved to 1.8% for the second quarter of 2010 from 2.0% for the second quarter of 2009
- The conversion rate from a trial subscription improved in the second quarter of 2010 to 46.7%, up from 44.3% in the same quarter of 2009
With this news and upward moving guidance, investors and analysts will be waiting with much anticipation to see how these subscriber metrics will affect the company’s ability to continue togrow cash from its operations. The company is due to report its financial results at the end of July, early August for the second quarter of 2010.
Position: Long SIRI