Friday, July 26, 2013

SiriusXM Churn Rate Drops

SiriusXM has continued to add subsribers quickly, sped along by the recovery in car sales.

According to the NY Times, Sirius reported 25.1 million subscribers, up 716,000 from the same period last year, and the company increased its guidance for the full year, saying that it expected to add 1.5 million subscribers and have more than $3.7 billion in revenue. Shares of Sirius were up a little more than 1 percent in the early afternoon on Thursday.

“The wind has certainly been at our backs with increasing auto sales, and we expect that to continue for the rest of the year,” James E. Meyer, the chief executive, said in an conference call with investors and analysts.  Meyer said that there are 54.5 million automobiles in operation with Sirius installed, and that he expected the number to rise to 100 million by the end of 2017.

Sirius also fared well with two particular measurements that investors have paid close attention to. Its “churn” rate, a measurement of customer turnover, has lately hovered around 2 percent, but for the second quarter it dropped to 1.7 percent, meaning that fewer customers were canceling subscriptions.

The number of “self-pay” subscriptions — as opposed to those with trial subscriptions subsidized by automakers — also grew in the second quarter to a high of 20.3 million, up 9 percent from last year. Subscriptions to the satellite radio service start at about $15 a month.

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