By when does XMSR hope to gain 1,000,000 subs (potentially cash flow break even if costs were reduced)? When might XMSR be able to get ANNUAL operating costs under $130 million?
1M subs is not going to be cashflow breakeven. It will be closer to 3M, although XM has recently indicated something under that.
Annual operating costs will never be under $130M. Depreciation alone is $100M.
As to the plan, I'm simply referring to the sub #s, which were made public over a year ago, and the fact that the company clearly stated with its last round of financing that it would need $600M additional financing before breakeven. The subscription numbers announced a year ago have been as close to perfect as one can imagine. The $600M looks right to me, as well. Everything the company said would happen has happened precisely when they said it would.
I think what you're not seeing is the reasonable expectation that the subscription numbers are going to climb steeply as factory installed equipment proliferates. It takes a lot of effort for customers, the way I did, to go out and purchase the equipment and have it installed into an existing vehicle. It is totally a different thing when you purchase the vehicle, the equipment is already there, and they say, hey, we'll add the $10/month to your monthly payment.
I see the 4th quarter subs #s as being pivotal. If, for any reason, they miss the projection, I would be concerned .. as the growth in the 4th quarter is going to be telling as to how well the factory equipment is actually going to sell. But based on the last 4 quarters, I'm confident they'll hit their numbers. |
