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Sirius XM Subscriber Growth Accelerates In Q2

7/07/2010 10:37:20 AM Eastern

New York - The
satellite-radio subscriber base grew for the fourth consecutive quarter during
the three-month period ending June, and it grew at a faster rate than it did in
the first quarter.

 The number of net new subscribers surged
583,249 in the second quarter ending June, compared with 171,441 in the first
quarter, Sirius XM reported. The surge
led the company for the third time to upwardly revise its 2010 forecast for net
adds, now expected to hit around 1.1 million, up from a previous forecast of
750,000.

 The company ended the second quarter with a
record 19,527,448 subscribers, up by more than 1.1 million from the year-ago
period to exceed the company's previous peak of 19 million at the end of 2008.

 The second quarter's 583,249 net adds contrast
sharply with a second-quarter 2009 loss of 185,999 net subscribers. For the
first half, net adds of 754,690 contrast with a year-ago first-half net loss of
590,421 subscribers.

 The company said it would break out
second-quarter and first-half net adds by retail and OEM channel in early
August when it makes its second-quarter financial report.

 "Our subscriber results mark the best quarter
of gross additions, deactivations and net additions since the merger of Sirius and
XM in July 2008," said CEO Mel Karmazin. "The strong execution in both adding
subscribers and retaining them resulted in our record-high 19.5 million
subscriber milestone despite continued economic uncertainty."

 For the quarter, Sirius XM increased gross subscriber
additions by 46 percent and decreased deactivations by 8 percent compared with
the year-ago quarter. Churn by consumers who directly pay for their subscriptions
improved to 1.8 percent in the second quarter, from 2 percent in the year-ago
quarter. The conversion rate from a trial subscription included in the sale of
a vehicle to a consumer-paid subscription improved in the second quarter to
46.7 percent from a year-ago 44.3 percent.

 Previously, the company attributed its first-quarter
net adds
to better-than-expected new car sales, improving retail sales, and
a greater number of new-car buyers converting promotional subscriptions to paid
subscriptions. Also playing a role were a small but growing number of used-car
OEM-radio reactivations and a churn rate that fell to 2 percent of the
subscriber base from a year-ago 2.2 percent.