Decline In OEM Take Rate Something To Watch
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.
It’s unrealistic to think that penetration rates could continue to rise without a decrease in the “take rate”
The take rate bears watching but the higher penetration rates are more than offsetting. Plus there is still virtually no discussion of activation in used cars . . . which could prove substantial in an environment where consumers are not buying new.
Mgmt is in a pure footrace against the clock to get the R/S authorization that any future lender will require prior to issuing a loan commitment to take out the Feb converts. This will not happen prior to 12/18.
If the share price continues to slide prior to the Board meeting, bank funding will likely be off the table all together.
Once again shareholders are left to watch the sands of time slip through the hour-glass . . .
Tyler . . is there any specfic data on used-car activations that we could take a look at?
Thanks!
Tyler
What is going to happen if the take rate declines?
The stock will drop all the way from 16 cents to 10 cents a share? I mean, really. Who cares? This company is DOA and the take rate really doesn’t matter at this point.
i see taylor on radio has reported that volvo will have hdradio as a standard in all 2009 models except one? thought it was for a option only. I sure hope hes worng for the sake of satrads future