Sirius XM Gains Subs In Second Half
By Joseph Palenchar -- TWICE, 1/25/2010
New York —
Sirius XM increased its net subscriber base for the second consecutive quarter, ended December 2009, but the gains weren't enough to offset first-half subscriber losses.
The satellite-radio company added 257,028 net new subscribers in the fourth quarter following a third-quarter gain of 102,295. The year-end subscriber base contracted 1.2 percent from year-end 2008 to 18.8 million, the company reported.
In another sign of a turnaround, the company said it expects to report more than $100 million of free cash flow for 2009, compared with 2009's pro forma negative free cash flow of $552 million, said Mel Karmazin, Sirius XM CEO. “This is the first year in our history that we have generated positive free cash flow for the entire year.”
The fourth-quarter net subscriber adds were the highest since the third quarter of 2008, he added, citing improvements in new car sales, conversion rates of OEM trial subscriptions into paying subscriptions, and “better-than-anticipated self-pay churn.”
The fourth-quarter conversion rate to self-pay subscriptions from trial subscriptions included in the sale of a new vehicle rose to 46.4 percent from the year-ago 44.2 percent. Fourth-quarter self-pay churn was 1.97 percent, and though said to be better than expected, it was nonetheless higher from the year-ago 1.8 percent and fourth-quarter 2007's 1.7 percent.
Sirius XM plans to release full-year 2009 financial results in February.
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