Sirius Reports 190% Subscribers Rise, 262% Revenue Growth, But Posts Bigger Quarterly Loss

NEW YORK, Feb. 21, 2006/Satnews Daily/ — Sirius Satellite Radio (NASDAQ:SIRI)

has reported a full-year 2005 revenue of $242.2 million reflecting a 262 percent increase from $66.9 million in 2004. But the company also posted a wider $311.4 million quarterly loss and $863.0 million full year loss on increased marketing costs.

Sirius said it ended 2005 with 3,316,560 subscribers, reflecting a 190 percent increase in total subscribers for the year and record net subscriber additions of 2,173,302. For the fourth quarter alone, the company added 1,142,640 net subscribers, leading rival XM Satellite Radio in terms of net satellite radio subscriber additions for the quarter.

Average monthly churn for the fourth quarter and full-year 2005 was 1.5 percent, in line with guidance, Sirius said. Subscriber acquisition costs (SAC) per gross subscriber addition was $113 for the fourth quarter and $139 for full-year 2005, a 21 percent improvement over the full-year 2004 level and ahead of guidance of under $145 for 2005.

Sirius’ fourth quarter and full-year 2005 financial and operating results practically mirrored the report of its competitor XM. XM reported last week a sharply higher 2005 revenue as it added more than 2.7 million net subscribers. But XM's losses also soared to $268.3 million in the fourth quarter on higher costs for marketing and acquiring subscribers.

“2005 was our best year ever and a major milestone for Sirius, setting new records in subscribers, market share and revenue,” said Mel Karmazin, CEO of Sirius. “In 2006, we believe this positive momentum will be further reflected in our automotive OEM channel, where we expect to more than double our subscriber base.”

Sirius said the company expects to have over 6 million subscribers by the end of this year while its average monthly churn is expected to be approximately 1.8 percent for 2006. The company said it expects SAC per gross subscriber addition to approach $110 for the full-year 2006 and to decline further in 2007. It also expects to generate approximately $600 million of total revenue in 2006, and approximately $1 billion in 2007. Sirius expects an adjusted loss from operations of approximately $540 million in 2006.

In 2005, Sirius said it added 1,554,108 net subscribers from its retail channel, a 123 percent increase from 696,028 net retail subscriber additions in 2004. The company also added 620,224 net subscribers from its automotive OEM channel, more than 241 percent above net automotive OEM subscriber additions of 181,646 in 2004. For the fourth quarter, Sirius added 900,645 net subscribers from its retail channel and 241,705 net subscribers from its automotive OEM channel.

Sirius said this was the best quarterly gain in the company's history, and a 138 percent increase over net subscriber additions in the year-ago quarter. Sirius' market share of satellite radio net subscriber additions was approximately 45 percent for full-year 2005 and approximately 56 percent for the fourth quarter.

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