Digital Gabe
Cutting Edge Commentary On All Things Media

Satellite Radio Heading Into Orbit

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With all the focus on the battle between broadcasters and streamers for the future of audio, it’s sometimes easy to lose track of Sirius XM.  But just like the slow and steady tortoise (I know I’m mixing metaphors here 🙂 ), Sirius continues to rack up steady growth numbers quarter after quarter.  In yesterday’s Q2 Earnings call, Sirius XM beat the Street’s forecasts for both top-line revenue and subscriber growth.  YoY Sirius’s paid subs grew 6% to 28.2M, and total revenue grew to $1.43B for the quarter.  More impressively Sirius cleared $292M in net income during Q2, and has raised its free cash flow estimate for 2018 to $1.5B.

Besides the strong business fundamentals of growing subs and ad revenue at the same time, the key to Sirius’s success is the satcaster’s ultra-low turnover rate.  In Q2 only 1.6% of Sirius’s audience cancelled their subscriptions, which is exponentially lower than the typical churn rates of other digital subscription platforms.  Thanks to these strong business metrics Sirius XM’s stock closed at a 10-year high, and currently sits at $7.12.  That might not seem like a crazy high share price, but keep in mind that the stock once traded for just 12 cents in 2009.

If you had invested in Sirius back then you’d literally be riding one of their birds into orbit right now!

 

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