Still awaiting regulatory approval for its merger with Sirius (NSDQ: SIRI), XM (NSDQ: XMSR) announced Q2 revenue of $318 million, a 15 percent increase from $277 million in the year-ago quarter. Net income narrowed to $120 million from $176 million. As it said in a separate statement yesterday, the company now has nearly 9.7 million subscribers, a 17 percent increase from where they were a year ago. Net subscriber adds in the quarter came to 322,000, down from 338,000 a year ago.
While top line growth slowed from 17 percent in Q1, it looks like the company decided to hit the breaks a bit on growth in order to expand margins. Basically, XM stopped spending as much on subscriber acquisition costs (SAC), which fell to $65 per gross add, from $75 a year ago. In Q1 it was a jump in SAC that caused the company's losses to expand (Of course, if it can merge with Sirius, it should be able to pull back further on SAC). Other key metrics, including churn (1.67 vs. 1.84 a year ago) and conversions (53.4 vs. 52.7) improved marginally from a year ago.
Release | No Call
By Joseph Weisenthal