They added about 65k subs, and burned $88m. That's actually $1357/sub.
Well, you don't include OpEx, CapEx expenses in CPGA..
If you look at the definition...
"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."
Now let's look at what is consided a standard reporting of a subscriber based model.
biz.yahoo.com
The metrics we are looking for are all laid out for us.. No matter how bad they are.
Gross additions 246,197
Deactivations 201,052
Net additions 45,145
Cost per gross addition (CPGA) $312
Equipment revenues 11,612
Cost of equipment (58,603)
Selling and marketing (32,719)
Overall consolidated churn was approximately 4.5%,
And of course another very valuable metric..
Consolidated cash costs per user per month $21.10
Lots of info.. Gross Adds were 246,197 and cost of equipment was 58,603,000 and Equipment Revenues were 11,612,000. So net subsidies were 46,991,000. You divide the subsidy by the Gross Adds and you get calculated subsidy per Gross add of $190. Which BTW is similar to XM calculated subsidy in Q3. Now we look at Sales and Marketing Expenses. Sales and Marketing were 32,719,000. So we divide S/M Expenses by Gross Adds and we get $132. We add S/M expenses per gross add and subsidy per gross add $132 + $190 = $322 vs. reported of $312. So it's not an exact science but close enough for you to build a model out of.
There it is. Pretty simple formula that is pretty standard for any subscriber based business.
However, XM does not give you Churn numbers, or the metrics so that one can calculte churn and Gross Additions (only Net Additions), but they tell you Churn is "Very Low". So they know what it is. But, don't tell you?
They also show 37 million in Sales and Marketing ($575 per net add) and almost 12 million in subsidies ($180 per net add), yet tell you Acquisition Costs were only $130? Does that sound correct? I mean were not even talking horeshoes and hand-gernades close!
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