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XM Posts Double-Digit Revenue, Sub Gains

5/12/2008 09:55:00 AM Eastern

Washington — XM Satellite Radio recorded double-digit gains in revenue and subscribers during the first quarter, which ended March 31.

Revenue for the first quarter 2008 rose to $308 million, a nearly 17 percent increase over first quarter 2007 revenue of $264 million.

XM's first quarter 2008 net loss was $129 million, compared with a first quarter 2007 net loss of $122 million.

XM ended first quarter 2008 with 9.33 million subscribers, an 18 percent increase, compared with 7.91 million subscribers at the end of first quarter 2007. This growth was driven by a 49 percent year-over-year increase in the number of gross additions through the automotive (OEM) channel, the company said.

First quarter 2008 OEM gross additions were 802,000, compared with 537,000 in first quarter 2007.

"In first quarter 2008 we delivered the largest number of new customers from the automotive channel in XM's history, marking the fourth consecutive quarter of record OEM gross additions," said Nate Davis, president/COO of XM Satellite Radio. "XM's ongoing investment in the OEM channel is paying dividends in the form of record customer additions and continued revenue growth as our OEM partners further expand XM's reach to millions of consumers."

In first quarter 2008, XM reported total gross additions of 1.034 million, and 303,000 net subscriber additions, compared with 868,000 gross additions and 285,000 net subscriber additions in first quarter 2007.

In first quarter 2008, XM's subscriber acquisition costs (SAC), a component of cost per gross addition (CPGA), were $73, compared with $65 in first quarter 2007. CPGA in first quarter 2008 fell below $100 to $99 for the first time since third quarter 2006 and compares with $103 in first quarter 2007.

XM said it continued to maintain stability in key operating metrics of conversion and churn, both of which improved year over year. First quarter 2008 conversion was 53.3 percent, compared with first quarter 2007 conversion of 51.5 percent.

First quarter 2008 churn was 1.77 percent, compared with 1.78 percent churn in the first quarter of 2007.

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