Sirius XM ended speculation on some of the Q1 data by releasing some subscriber data earlier than anticipated. The company reported that they added over 171,000 new subscribers, which is a stark difference from the subscriber decline of 404,000 during Q1 of last year. The company finished the quarter with 18,944,199 subscribers.
The company also improved on year over year churn by reporting that 2.0% of existing subscribers churned each month. Last year the churn number was 2.2%. Improvements in this area can be attributed to more concentrated marketing efforts as well as higher gross subscriber additions.
Gross subscriber additions increased by 29% in Q1 of 2010. This can be attributed to a deeper penetration into the OEM (new car) segment. The latest penetration numbers were in the area of 60% compared to a year ago when the number was closer to 50%.
The company announced a small uptick in the conversion rate from OEM trial subscriptions. This represents the number of people who elect to become self paying subscribers after their free trial period ends. The conversion rate is now 45.2%, up from 44.6% for the first quarter of 2009.
Continued improvement in data categories such as these will be an integral part of the growth of the company and will do wonders for the perception of the business model with investors, potential lenders, and even talent. People tend to want to be a part of a growth story, and Sirius XM is showing that despite a poor economy that they are capable of growing. Along those lines, Sirius XM CEO Mel Karmazin stated, "We also expect to report solid revenue growth and strong growth in pro forma adjusted income from operations for the first quarter of 2010."
These numbers and the revenue statement made by Mel combine to take much of the anticipation and surprise out of the equation as investors await the financial data of the first quarter. What can now be anticipated is a positive quarter supported by subscriber and revenue numbers. This could put an end to the speculative investing on either side of the equation prior to the release of Q1 numbers. In my mind this offers stability, a characteristic that many investors are seeking these days.
Position - Long Sirius XM Radio