Most of SiriusXM new subscribers in the future will come from used cars, the satellite radio company reported Wednesday.
The company reported a high of 26.3 million subscribers total, with 475,000 new subscribers added during the second quarter. Many of these came from owners of new cars, but the company expects, in the future, to see most of the new subscribers coming from used cars.
1.8 million subscribers are now in trials from used car sales, a record high. Over 30 percent of them are converting, in general, into paid subscribers.
“We are evolving from a one funnel business to a two funnel business,” said CEO Jim Meyer, where funnels signify radios activated in new cars and used cars.
Eventually, there will be more subscribers coming from trials in used cars than new cars, said CFO David Frear.
About 27 percent of new paid subscribers for the quarter came from used car owners, up from 19 percent in 2012.
SiriusXM radios are now installed in about 65 million vehicles on the road. In 5 years, that number will climb to 120 million cars, and in 10 years, it will reach 150 million.
For the recent quarter, SiriusXM net income rose 60 percent to $131 million, up from $82 million last year. The company raised its guidance for revenue for the full year to $4.1 billion, with net subscriber additions of 1.25 million.
During the quarter, the company set records in the conversion rate of free subscribers to paid subscribers, in total subscribers, in adjusted EBITDA and free cash flow as well as the number of subscribers in free trails. Much of that was due to the boom in new car sales, although the company stressed that future growth will come from used car subscribers.
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