XM adds 713,101 subscribers in Q4
XM Satellite Radio's Q4 financial and operating results showed net subscriber additions of 713,101, representing a 66% increase over the 430,580 subscribers added in Q4 '03. The company added 1.8 million net subscribers in 2004, an increase of 137% over 2003, and finished the year with 3,229,124 subscribers, exceeding 2004 year-end subscriber guidance of 3.1 million by more than 125,000 subscribers.
In Q4, XM reported revenue of 83.1 million, an increase of 148% over the 33.5 million reported in Q4 '03. FY 2004 revenue was 244.4 million, an increase of 166% over the 91.8 million reported in 2003.
Said XM CEO Hugh Panero in the quarterly call: "Satellite radio is an extraordinary new industry and XM is one of the few media companies with a strong growth story. Only a year ago, people questioned whether 20M subscribers by 2010 was a realistic forecast. And now, these same people are asking if 20M is too conservative...in addition, throughout 2004, XM maintained significant market share advantage in both retail and OEM distribution channels, generating roughly two thirds of all retail net additions and three-fourths of all OEM net additions."
XM's net loss for the quarter, however, was (188.2) million as compared to (162.9) million in 2003. For the full year, XM's net loss was (642.4) million, compared to (584.5) million in 2003, primarily reflecting increased de-leveraging expenses.
XM reported an EBITDA loss of (139.7) million for the quarter, including 41.6 million in de-leveraging charges, compared to (95.5) million for Q4 '03, which included 4.6 million in de-leveraging charges. For FY 2004, XM reported an EBITDA loss of (388.4) million, including 76.6 million in de-leveraging charges, compared to (318.9) million for the full year of 2003, which included 24.7 million in de-leveraging charges.
The FY 2004 Cost Per Gross Addition (CPGA) was 100, an improvement of 27% compared to FY 2003 CPGA of 137 and better than previous 2004 guidance of 110. XM's CPGA represents the fully-loaded cost to acquire each new subscriber, including Subscriber Acquisition Cost (SAC) of 62 in 2004, plus advertising and marketing expenses.
In the quarter, GM achieved a major milestone in December, signing up its 1 millionth XM subscriber. Also in December, XM introduced the MyFi, the world's first portable, wearable satellite radio.
As of 12/31, XM's total liquidity position was 853 million including cash, cash equivalents and capacity under the revolving credit and equity facilities with GM. In January, XM added 100 million in gross proceeds through an over-allotment option on the sale of 1.75% Convertible Notes. During 2004, XM was able to opportunistically de-lever its balance sheet and eliminate over 900 million in future interest, dividends, accretion and principal payments. In December 2004, XM was also added to the NASDAQ-100 Index.
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