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SiriusXM’s Net Subscribers, Revenue, Net Rise In 2012

New York – SiriusXM’s revenues, net income, and number of net new subscribers gained in 2012 because of rising new-car sales, more activations of satellite radios in used cars, and lower churn, executives said.

Revenues and net income were also up in the fourth quarter, but the number of net new subscribers slipped slightly.

In 2012, the satellite-radio broadcaster gained 2 million net new subscribers in 2012, up from 2011’s 1.7 million to mark the best annual gain since 2007. The gains expanded the company’s subscriber base to a record 23.9 million at the end of the year.

The company, however, forecast a 2013 new subscriber gain of only 1.4 million, in part because of expected slower growth in new-car sales.

Self-pay net subscriber adds hit almost 1.7million for the year, yielding an all-time high in the self-pay subscriber base of almost 19.6 million.

Self-pay monthly churn in 2012 remained unchanged at 1.9 percent, as did the 45 percent

The number of net new subscribers for the quarter slipped slightly to 534,953 from the year-ago 542,966. Self-pay monthly churn for the quarter fell to 1.8 percent from the year-ago 1.9 percent. The rate at which owners of new cars converted to a paid subscription from a trial subscription in the quarter was steady at 44 percent.

For the full year, revenues were up 12.7 percent to $3.4 billion, and for the quarter, revenues rose 13.9 percent to $892.4 million.

Net income rose to $3.47 billion for the year compared to 2011’s $427 million, but $3 billion of the net income resulted from a one-time second-quarter income-tax benefit exercised to take advantage of previous years of net operating losses (NOLs). Without the one-time gain, full-year net income would have been up 10 percent to $470 million.

For the quarter, net income rose 119 percent to $156.2 million.

Because of NOLs that the company hasn’t yet exercised, the company said it expects to pay “no significant cash taxes for several years,” said CEO Jim Meyer. The company has about $7 billion in NOLs to use to shield itself from taxes, said EVP/CFO David Frear.

Despite expected slower growth in new-car sales in 2013, the company expects to gain from Toyota’s January announcement that it will include satellite radio with all vehicles equipped with its Entune infotainment system.

In other comments, Meyer said the company’s IP-based Internet-streaming offerings will make their way into car OEM systems, but he didn’t specify a time period. The company enhanced its Internet streaming offerings in 2012 by expanding play-by-play sports programming, enabling time shifting of up to five hours of programming, letting users starts at the beginning of a song when they change channels, and letting users access a library of shows on demand. The content is accessible via Android and iOS apps and PCs.

The streaming service has also launched a beta of MySXM, a customizable service that lets users create customized versions of the company’s commercial-free music channels. MySXM will be launched “in the near future,” the company said.

With the improved streaming services, SiriusXM will be able to sell more bundles of satellite-radio and streaming services, Meyer said.

Meyer didn’t say when Nissan would launch telematics services from SiriusXM, but the services will include a suite of safety and convenience features such as automatic crash notification, stolen-vehicle tracking, roadside assistance, and others. The telematics deal was announced last September.

In other announcements, the company reported that satellite radio was included in 67 percent of all new cars sold in 2012 and expects the rate to remain in that range over the next few years. More than 10 million new cars were equipped with satellite radio in 2012, up three times from 2006 levels, Meyer said.

Fifty million vehicles were on the road at the end of 2012 with factory-installed satellite radio satellite, representing 20 percent of all registered vehicles on the road, said Meyer. At the end of 2011, 40 million vehicles were on the road with OEM satellite radio.