Sirius XM Q1 Numbers Released
The highly anticipated Q1 numbers are finally out. As expected, Sirius XM is highlighting that they are a “cash flow growth story” and concentrating on bottom line metrics. Mel Karmazin also noted that synergies are coming into play. The company saw a $23 reduction in cash costs despite the condition of the economy.
Karmazin noted, “The growth in adjusted income from $31.8 million in the fourth quarter of 2008 to $108.8 million in the first quarter of 2009 should give investors comfort that we are well positioned to exceed $350 million in adjusted income from operations this year, an increase from our prior guidance to exceed $300 million.”
As expected by this publication, the loss in subscribers was substantial. The company lost 404,000 subscribers. The biggest hit in the sub number came from promotional period subs dropping off. Self paying subs declined only 1%. On the positive side was a substantial decrease in the cost to obtain a subscriber (SAC). SAC was down to $61. Average Revenue Per User (ARPU) dropped to $10.43 from $10.48. The company states that this is reflected by ad sales that are down by 20% offset by higher revenue from the “BEST OF” programming. There are now 700,000 subscribers that are paying an additional $4 per month for “BEST OF” programming (500,000 getting BEST OF Sirius and 200,000 getting BEST OF XM). Should baseball come to the BEST OF XM package, the company has potential to grow that further. Almost all the way across the board, Sirius XM demonstrated substantial cost declines. Overall the loss for the quarter was 7 cents vs. a 2 cent loss expected by the street.
The big news was the adjusted EBITDA. The company had previously indicated that they would finish 2009 with positive $300 million in adjusted EBITDA. The company adjusted guidance by increasing this metric to more than $350 million.
Sirius XM finished the quarter with $375 million in cash and marketable securities. Free Cash Flow was negative $4 million.
Sirius XM noted that overall penetration in the OEM channel was 53%, and that penetration will increase to the high 50’s for 2009. The company highlighted that for the first time the popular Toyota Camry will offer satellite radio as a factory installed option in several trim levels. The conversion rate (consumers who become self paying after a promotional period) has fallen to 45%. The company attributes this decline, in part, to installations in lower end trim levels.
Many investors have been clamoring for a Sirius XM iPhone application. The company announced that they plan to launch an application before the end of the second quarter. Watch for launch to happen early to mid June so that it coincides with Father’s Day. The company states that they anticipate leveraging on air hosts to help market the application.
The company additionally announced that they have renegotiated their deal with General Motors through 2020 at a substantial savings. This is good news because traditionally the GM deal has been the most expensive OEM deal. Details of the deal are not yet available.
[Sirius XM Press Release]
Position – Long Sirius XM Radio
Mark my words, Sirius will present the new iphone App at Apple’s June 8th WWDC.
This will be huge to see Mel take the stage after being introduced by Steve Jobs who will be coming back officially as CEO of Apple.
This would be the best time for Sirius to release the App for MAXIMUM media exposure.
Trust me, I’m a confirmed “Apple-Head”….and these shows are watched by legions of rabid fans.
“Decline in SUBS” is what (and SHOULD) be highlighted. How many cancelations are due to the piss poor programming that has occurred since the merger and have driven loyal supporters of Satrad to cancellation or dropping multiple subscriptions due to multiple subscription price hikes??
Spin that why don’t you Mel???
Where is the breakdown of that???
Apple/iPods….Fine for those users but for a lot of people that is one BIG YAWN. I have ABSOLUTELY no plan to plunk down more hard cash for another toy. I have a 2002 generation 1 SkyFi that does the job nicely and was planning to upgrade to an Inno but since the merger and on-going BS and flux I’m holding tight and may not renew when my multi-year subscription expires next year. I use my Skyfi for multi-vehicles and office so having an hard mount unit in a car is useless to me.
I wouldn’t pay one DAMN penny for a hard mount unit in a car if/when I buy another new one. Nor am I interested whatsoever in buying some Apple/cell phone device that will cause me to pay out more money.
SiriusXM should be focused on keeping current subscribers happy and not shuffling numbers around. That just shows what shysters the present management is made of.
Go ahead Mel send me one of your customer satisfaction questionaires if you have the balls to. Sadly, you & your minions can’t face the truth.
Gosh. Why so angry? I’m a subscriber, and I’m rolling with the changes. Sirius is still the best radio on radio. I am so tired of hearing people like you threatening that you’re gonna cancel. I just don’t get it. Mel has navigated thru land mine after land mine and saved this company. Have a little patience why dontcha. I mean seriously. Is it REALLY THAT bad for you? You seem quite angry. Disproportionately so. I normally would dismiss such over exaggerated anger as a “short” in disguise. But thats too easy.
I’m really beginning to feel that people such as yourself just have to CHILL. Seriously. Life is WAY too short to get THIS worked up. I mean are you telling me that the changes in programing have upset you THAT much? Are you actually saying that you no longer enjoy the product? Fine. In that case cancel.
But I get the STRONG feeling that you’d MISS it terribly. Cause lets face it, people that love Sat Radio….like myself….will go on lovin’ it.
Will there be future changes in programing? Um….HELLO. Of course. The only constant in the universe IS CHANGE. Get used to it! 🙂
I am confident however that the HUGE breath of commercial free content will go on pleasing me.
Again, if you’re getting this worked up…be my guest and cancel. Go back to terrestrial radio or spending hours loading new songs onto your ipod every week. LOL. I mean. Come on.
Cheers.
What you (and subscribers who feel the same way) are settling for my good friend is mediocrity and a decline in programming quality.
Basically what you are saying is “Hey,it could be worse”.
What we should be saying as subscribers (and STOCKHOLDERS like myself who bought at around $6/share) is it should be getting better.
Patience you ask?? Goodness sakes it’s been almost a year since the merger and we’ve gotten what??
Here’s what:
1. Fee increase for multiple subscribers
2. Charges for internet access(management assured there would be NO increase for forseeable future in both categories—-Mel LIED!!!
3. Removal of great channels like “Soul Street”,”The System”,”Audio Visions”,”XMComedy” for inferior substitutions. I’m sure many other posters can fill in other examples of programming ineptitude and encourage them to do so.
EXAMPLE: Just yesterday I listened to “Willie’s Place” & heard two songs in 15 minutes with the rest of the time spent yakking on & on & on. Now this is a MUSIC channel mind you and obvioulsy just because it commercial free that gives the PD’s latitude to let someone yak for approximately 10 minutes and not play music on a MUSIC channel. Hell, they don’t even do that on terra radio music stations!! And you expect me to pay for that and not get pissed????
Try contacting the feedback site……..You’ll get the same canned response each time.
“frigginregan” I have been a SatRad subscriber since February 2002 and a stockholder for quite a few years. Untill the last 6 months you could not find a BIGGER supporter of SatRad than me. I have seen what once was one of the greatest advances in broadcasting in my lifetime(I’m 50+) go from something that I heartly endorsed and was responsible for at least 6 new subscribers (XM & Sirius) to becoming something that is kinda OK and I can’t really endorse except to say ‘well, its sorta better than terra radio but not as good as it once was plus you can download better stuff in certain categories and you can stream some really good radio stations on the internet”
I upgraded to DSL as a DIRECT result of getting tired of some of the crap that is now featured on SiriusXM. Two years ago I would have told you point blank that was an unthinkable action.
And you have the gaul to suggest that I’m bitter??
No, I’m not bitter just disappointed as hell to see how things have turned out. I’m just one of those subscribers/stockholders who really loved something good and am seeing it slip into mediocrity and knowing that Mel & his minions just don’t give a damn. All they’re doing is changing the deckchairs so to speak.
SatRad “lite”: Is that what you really want?? Well, sadly my friend that’s the way its headed if its not there already.
Never forget that word of mouth is still a powerful tool and you & I both know what a stellar job Mel’s marketing group has been doing on that so far.
Pro-forma numbers again, mostly interesting as how they show what management considers important. Looking forward to actual numbers next quarter, guys.
could losing subscribers be the result of the recent price increase for additional subs? I had 3 subscriptions and i’m now down to 1 because of the price increase and the removal of web access. Bye bye.
What did they think would happen? They killed Bubba and tons of other programming and replaced it with crap. The killed a PERFECTLY WORKING IPHONE APP AND STREAM SOFTWARE to release… errrrr… NOTHING in their place. AND for all of this they jacked up prices. The hubris that goes on at that company is disgusting!
For those of us that actively petitioned against the merger. We have only one thing to say……..
WE TOLD YOU SO!!
And so it goes,
PCSTEL