In the latest quarterly filing by Sirius XM Radio, the OEM take rate (on a proforma basis) was stated to be at 47%. This figure was compared to 50.7% the year before. while 3.7 points may not seem like much, it translates into millions of dollars.
If we assume that a typical quarter brings in 1,500,000 new OEM subscribers what would all of this mean?
At the 50.7% take rate, 1.5 million cars would bring in 760,500 subscribers. With an ARPU (Average Revenue Per Unit) of $10.15 per month, this would mean quarterly revenue of $23.2 million from this group.
At the 47% take rate, the 1.5 million cars would bring in 705,000 subscribers. With an ARPU of $10.15 per month, this would mean quarterly revenue of $21.5 million from this group.
The difference is nearly $1.7 each quarter. It may not seem like a lot, but it does add up. The take rate will be the latest reason that some analysts will adjust their targets downwards. While the numbers are not yet big enough to consider threatening, they do bear watching. Because this is the first quarterly report of the combined company, people should watch all metrics closely to see if the trending is going in the appropriate direction.
Position: Long Sirius XM.