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XM Reports Greater Q4 Sales, Subs, Loss

2/27/2006 02:00:00 AM Eastern

XM Satellite Radio's fourth-quarter revenue more than doubled, hitting $177.1 million, a 113 percent increase over the $83.1 million reported for the last quarter of 2004.

The revenue rise was driven by “significant” subscriber growth and increases in average revenue per subscriber due to a price increase, said the company.

XM reported a wider net loss in the fourth quarter, ended Dec. 31, coming in at a negative $268.3 million, compared with a net loss of $188.2 million in the fourth quarter of 2004, due mainly to higher subscriber acquisition costs and marketing and programming expenses.

XM ended 2004 with 5.9 million subscribers, an 84 percent increase over the previous year's 3.2 million, and, despite intense competition in the fourth quarter, came in with net subscriber additions of 898,315, compared with 713,101 year-on-year. Later-than-expected activations from strong holiday sales brought the total to more than 6 million in the first week of January.

“We added more than 2.7 million net subscribers in 2005,” said Hugh Panero, president/CEO, and “expect to exceed 9 million subscribers by year end. We're on track to have more than 20 million subscribers by 2010, and project revenue will reach $860 million in 2006.”

In the fourth quarter, XM subscriber acquisition cost was $89, up from $64 in the year-ago three months. Cost per gross addition for the fourth quarter reached $141, compared with $104 in the same period last year. These increases were primarily due to higher marketing expenses.

Average monthly subscription revenue per subscriber hit $9.85 in the fourth quarter, up from $8.74 year-on-year.

Net loss before interest, income, interest expense, income taxes, depreciation and amortization (EBITDA), said by XM to be a useful measure of the company's operating performance, came in at a negative $199.4 million in the fourth quarter, compared with $139.7 million in 2004. For the 12 months, EBITDA loss reached $434.3 million, up from a negative $388.4 million year-on-year.

XM full-year revenue soared 128 percent, reaching $558.3 million, up from a year-ago $244.4 million. Net loss reached $666.7 million, compared with $642.4 million the prior year.

Net subscriber additions for the 12 months were 2.7 million, up from a year-on-year 1.9 million. Subscriber acquisition costs for the 12 months edged upward to $64, from $62 the previous year, while cost per gross addition reached $109, up from $100 in 2004. Average monthly subscription revenue per subscriber for the 12 months totaled $9.51, compared with $8.68 the prior year.