Washington — XM Satellite Radio Holdings enjoyed a 43 percent increase in subscribers in the second quarter, hitting 692,253, a net subscriber addition of 209,178 over the first three months of 2003 and five times the ending subscribers, of 136,718, in the second quarter of last year.
"XM continues to show significant progress in adding subscribers, controlling costs and achieving key operational milestones," said Hugh Panero, president/CEO, who said XM would be rapidly approaching 1 million subscribers by the end of the third quarter.
The company reported a five-fold increase in total revenue quarter over quarter, hitting $18.3 million for the three months, ended June 30, up from $3.8 million in the year-ago period.
Higher depreciation on long-lived assets and non-cash charges pushed XM's operating loss to $161.9 million in the second quarter, up from a loss of $103.9 million in the same quarter a year ago. Net loss for the second quarter climbed to $161.9 million, up from $117.2 million year-on-year.
Including over $25 million in charges, XM's Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) loss reached $95.8 million in the second quarter, compared with an EBITDA loss of $78.7 million in the second quarter of 2002.
Following a general downward trend, expected to continue into 2004, XM was able to reduce both Cost Per Gross Addition (CPGA) and Subscriber Acquisition Costs (SAC), in the second quarter of this year.
CPGA, the per-unit measurement of fully loaded acquisition costs, including advertising and marketing costs, for the second quarter, hit $160 per subscriber, down from $591 per subscriber in the second three months of last year.
SAC, which reflects the direct subsidy and distribution expenses per unit, hit $80 in the second quarter of 2003, compared with $132 in the same three months a year ago. Total revenue per subscriber, however, dipped in the second quarter, down to $10.73, compared with $12.32 in the second three months last year.
At the end of the second quarter, XM had total cash and cash equivalents of $345.9 million. The company raised about $185 million in June and July from a public offering.
XM said it remains on track to reach cash flow breakeven in 2004, and that quarterly losses reported this financial period are an expected result of a rapidly ramping growth business.