XM Q3 doubles last year's results
XM Satellite Radio's Q3 revenue was 65.4 million, more than double the 26.9 million reported in the Q3 '03. Q3 revenue also represented a 23% increase compared to revenue of 53.0 million reported in Q2. XM's Q3 net loss was also improved, at (118.0) million vs. (133.5) million Q3 '03. XM's EBITDA loss of (62.9) million for Q3 compared to (64.4) million for the Q3 '03, a period which included 4.4 million in de-leveraging charges. XM's Q3 Cost per Gross Addition (CPGA) was 89 dollars, an improvement of 38 dollars, or 30%, compared to the 127 dollar CPGA reported in Q3 '03. XM's CPGA represents the fully-loaded cost to acquire each new subscriber, including Subscriber Acquisition Costs of 57 dollars, as well as advertising and marketing expenses. As of 9/30, XM reported 2,516,023 subscribers, up 415,671 for the quarter, a 75% increase over the 237,395 subscribers added in Q3 '03. Churn rate remains at 1.2%.
XM CEO Hugh Panero said he anticipates a strong Q4, with the company remaining on pace to exceed 3.1M subscribers by year end: "At the end of the third quarter, XM maintained a market share of approximately 30% of all satellite radio subscribers...The bottom line is this. XM, the market leader in satellite radio, has put in place the programming, hardware products and distribution channels to drive a very successful holiday season. We are looking forward to an outstanding finish to a great year for XM, our shareholders and the overall satellite radio industry."
CFO Joe Euteneuer talked a bit about the ongoing insurance issues relating to premature satellite degradation: "In July, XM reached an agreement with its satellite insurers, covering 80% of the aggregate sum insured at a settlement rate equal to 44.5% of the proportionate amount of the sum insured, covered by each of the insurers. Total recovery of approximately 142 million of these insurers included waived insurance premiums. As of the end of the third quarter, we collected these settlements and we are in the process of seeking to collect the remaining 20% of the sum using third party dispute resolution procedures under the policy."
Other highlights from the quarter:
* Major League Baseball and XM announced an 11-year agreement enabling XM to broadcast games of every MLB team nationwide beginning with the 2005 regular season. XM will create a dedicated Major League Baseball radio channel featuring original content and classic MLB game broadcasts. XM will also broadcast select games in Spanish.
* XM Unveiled Delphi MyFi - the First Wearable Satellite Radio
* During the quarter, XM shipped the new XM Delphi Roady2 and SKYFi2. Roady2, the smallest satellite radio, includes a built-in wireless FM adapter.
* For the 2005 model year, XM announced it is being offered on over 110 vehicle models, with more than 80 of those being factory-installed in General Motors, Honda, Audi and Volkswagen vehicles. In addition, all 2005 Acura RL's will feature a one-year subscription to XM Radio and XM NavTraffic -- the nation's first satellite radio traffic information service combining traditional GPS navigational systems. For the 2005 model year, new vehicles with XM Radio factory-installed will include the Acura TSX and MDX, the Honda Odyssey, Element and Accord Hybrid, Saab 9-7x, Volkswagen Passat and the Audi A8 and TT.
* XM debuted "The Bob Edwards Show" and Opie & Anthony.
* XM Radio Adds Starbucks Hear Music Channel, Big Ten Sports and launches XM Radio Online