Sirius Reported Higher Revenue, Soaring Subscriptions During Q4

NEW YORK — Sirius Satellite Radio said robust holiday sales and an increase in its automotive channel business — coupled with “better-than-expected” subscriber growth — helped quintuple fourth-quarter revenue.

The company reported revenue of $25.2 million for the three months ended Dec. 31, up from $5 million in the year-ago period.

Fourth-quarter subscriber net additions reached 480,969, a 332 percent increase over the 111,449 net additions in the third quarter of 2003. At the end of last year, Sirius had 1.1 million subscribers, compared with 261,061 at the end of 2003. On Jan. 24, the company had over 1.24 million subscribers.

However, the net loss for the fourth quarter widened to $261.9 million, up from a net loss of $147.8 million year-on-year.

“[The year] 2004 was a turning point for Sirius, and a strong indicator of what we believe the future holds for a new entertainment category still in its early days,” said Mel Karmazin, CEO. “Not only did we greatly exceed our estimated subscriber target for the year, but we also beat estimates in subscriber acquisition costs and monthly churn.” (Karmazin and XM Satellite Radio denied merger rumors. See story on p. 28.)

Sirius had 521,479 gross subscriber additions in the fourth quarter, compared with 125,898 in the fourth quarter of 2003. It reported average monthly churn of 1.5 percent for the three months, compared with 2.3 percent in the same three months a year ago.

Subscriber acquisition costs in the fourth quarter hit $124, down from a year-ago $222. Average monthly revenue per subscriber climbed to $10.57 in the fourth quarter, down from $11.99 in the same three months the previous year. But after the effects of Hertz subscribers and mail-in rebates, the average monthly revenue per subscriber in the fourth quarter was $9.36, compared with $8.59 in the same period a year ago.

During the fourth quarter, Sirius added 348,711 subscribers from its retail channel, a 302 percent increase year-over-year.

For the 12 months, revenue soared to $66.9 million, better than a 400 percent rise over the $12.9 million reported in 2003. The net loss also increased, reaching $712.2 million for the year, compared with a $226.2 million net loss in 2003.

Gross subscriber additions for the 12 months moved up to 986,556, compared with 255,798 for the preceding 12 months. Average monthly churn for the year was 1.6 percent, down from 1.5 percent in 2003 — the company's best-reported churn rate to date and below company expectations, said Sirius.

Sirius recorded subscriber acquisition costs of $177 during 2004, down from the $293 reported the previous year. Average monthly revenue per subscriber for the 12 months was $10.91, down from the $12.02 recorded year-on-year. Subtracting the effects of Hertz subscribers and mail-in rebates, 12-month average monthly revenue per subscriber was $10.02, compared with $9.39 in 2003.