XM Satellite Radio Holdings Inc. (XMSR) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: russwinter who wrote (404)	11/25/2002 3:41:21 PM
From: pcstel	Read Replies (2) of 3386

The $180 sub acquisition number you use is dated. Per the 3Q call, biz.yahoo.com acquistion is now $120 (for 3Q) and anticipated $110 for 4q, russ: I have no idea what XM management uses to calculate their Cusomer Acquisition Costs? But, for subscriber models. CPGA is defined as... "CPGA - Cost Per Gross Add: Summarizes the one time cost per customer gross addition. CPGA is computed by dividing the sum of sales and marketing expenses plus cost of goods sold less equipment revenue, by the number of customer gross additions acquired during the period. " Cost of Goods sold less equipment revenue is your subsidy provided. With subsidies of 11.8 million and Net Adds of ~64K. Your subsidy component of CPGA is over $180 by itself if Churn was zero. That does not include your sales and marketing expenses that would relate to CPGA. XM CPGA is well over $400. They can tell you some sort of "powder puff" figures that relates on how they want you to consider CPGA. But, it's not how the subscriber industry at large and "profesional investors" would calculate it. Given managements metrics of customer acquisition charges. CPGA was only about 7.6 million for the quarter. Why they posted subsidies of over 11.5 million and Sales and Marketing expenses of over 30 million is then a mystery? Churn rate was described as "very low", no actual number was given. Again, this is suspect! Churn metrics is one of the most important metrics a subscriber based business can provide to analysts. Churn Kills! "Very low"is kind of abstract. You would consider a figure like 97% retention for Churn as a positive. But, again. It is typical that Churn is measured on a monthly basis. Hence a 97% retention level when reffered to Churn would result in a 3% Churn Rate. In 12 Months with CHURN 3% means over 30% of your subscribers deactivate during a 12 month period. They refused to tell you what the Churn metrics are. That is a big negative to the analysts. PCSTEL

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next