SiriusXM said slower car sales are impacting its acquisition of new satellite radio subscribers. Also, sales of satellite radios and accessories will be lower for the quarter that ends this month, it said.
New subscriptions will likely remain in the positive category, but will be lower than expected and revenue for the quarter will be impacted, SiriusXM said in an 8K filling with the SEC Monday.
US new car sales were down about 47 percent in April and 29 percent in May from the same periods last year. Sales were also slower in used cars, but not to the same extent as new cars, said SiriusXM.
The lower car sales rate means fewer trials of satellite radio provided free to consumers, and therefore, fewer customers who convert to paying customers now and in the future.
SiriusXM is available in about 80 percent of new vehicles.
Churn rate overall for satellite radio remains steady and general business expenses for the quarter are expected to be lower in many categories.
Advertising revenue has taken a hit for both Pandora and SiriusXM. “Several categories of advertisers cancelled or paused orders during the second quarter, and while we have seen recent increases in advertising orders, we believe advertising revenue will likely continue to be negatively impacted during the balance of 2020,” it said.
All in all, the pandemic is expected to hurt subscriber revenue due to “the decline in sales of new and used vehicles, reduced drive time, increased churn and the inability of our vendors to staff call centers fully,” said SiriusXM.
See the full 8K filing with the SEC here (second filing from the top as of today). Or see a summary in The Street.