Sirius Q3 revenue up 150%
For Q3, Sirius Satellite Radio had revenues of 167.1 million compared with 66.8 million for Q3 '05. This 150% gain was primarily driven by a 91.1 million increase in subscriber revenue resulting from the net increase in subscribers of 2,945,388, or 135%, from Q3 '05 and a 5.6 million increase in net ad revenue. Sirius reported a net loss of (162.9) million, or (0.12) per share, for Q3 compared with a net loss of (180.4) million last year, or (0.14) per share, for Q3 '05.
The company's adjusted loss from operations decreased 22.2 million to (83.2) million for the quarter, from (105.4) million in Q3 '05. This was also attributed to the increased subscriber base, which more than offset an 81.0 million increase in operating expenses.
Subscriber acquisition costs (SAC) increased 12.2 million to 80.9 million from 68.7 million for Q3 '05. The increase was blamed on higher shipments of Sirius radios and chip sets to support a 57% increase in gross subscriber additions from 465,228 for the third quarter of 2005 to 732,406 for the third quarter of 2006. This increase was offset by reductions in hardware subsidy rates as the company continued to reduce manufacturing and chip set costs.
SAC per gross subscriber addition decreased 23% from 149 dollars in Q3 '05 to 114 dollars for Q3 '06, due to the reduction in average subsidy rates as the company continued to reduce manufacturing and chip set costs.
"Sirius continues to focus on excellence in programming and solid execution of our business plan," said Mel Karmazin, Sirius CEO. "Over the last year, we generated 100 million in new revenue, increased our share of satellite radio net subscriber additions by 24 percentage points and reduced our SAC per gross addition by 23%...We are well prepared to meet fourth quarter demand and remain focused on achieving positive free cash flow."
FY 2006 guidance included:
-- 6.3 million subscribers at year-end;
-- Average monthly churn of approximately 1.8%;
-- SAC per gross subscriber addition approaching 110;
-- Total revenue of 615 million;
-- Adjusted loss from operations of approximately (565) million;
-- Free cash flow loss of approximately (500) million; and
-- Sirius' first quarter of positive FCF, after capital expenditures, could be reached as early as Q4 2006.
Previously issued longer term guidance remains unchanged.
