SiriusXM Satellite Radio is on a roll, having added over half a million subscribers in the past three months. The new listeners add to the upward momentum for the service, which has grown by 2.2 million subscribers in the past year.
Although the company actually missed its earnings predictions for Q2, the more important news was the healthy growth in subscriptions, which led to the stock price of the company surging after the announcement, and prompted the company to boost its annual revenue prediction from $4.9 billion to $5 billion.
The company's subscriber base rose from 28.4 million at the end of last year's second quarter to 30.6 million following Q2 2016, resulting in a significant 8 percent increase year to year. The upsurge is even more impressive in that SiriusXM not only competes with traditional terrestrial radio stations but also with streaming music services like Apple Music, Spotify and iHeartRadio, all of which have seen significant growth in paid subscriptions lately.
"SiriusXM's second quarter results demonstrated continued strong demand for our content bundle and solid execution by our entire team. We grew net new subscribers by 587,000 in the second quarter, and our subscriber base, revenue, adjusted EBITDA, and free cash flow have never been higher. We are pleased to once again raise our key guidance metrics for the full year," said Jim Meyer, CEO of SiriusXM.
That's also positive news for Liberty Media, the majority stakeholder in SiriusXM. Liberty has reportedly just made an offer, supposedly rejected, for Pandora, the radio-style streaming service that is considered one of SiriusXM's direct competitors. Pandora recently reported a slight fall in the number of its active listeners.
SiriusXM differs from competitors like Pandora in several key ways. Most obvious is the satellite delivery system which allows users equipped with a branded satellite radio to receive content in their vehicles and homes. SiriusXM's relationship with car and truck manufacturers who build the necessary equipment into their vehicles has been one of the main elements of its successful growth. The service also provides a mobile app that allows for streaming, as well as offline listening, and also streams content directly via a player integrated into its website.
SiriusXM is also the home of Howard Stern, the most popular and highly paid radio personality in the United States, who maintains a large and rabid fanbase, which helped the once fledgling Sirius battle the larger and more popular XM into submission in a fight that ultimately resulted in the merger of the two companies. Other musical and news content featuring various experts and celebrities, along with exclusive streams of concerts, festivals, and events such as the recent political conventions differentiates SiriusXM content from that of competitors like Spotify and Pandora, who offer a much less personalized and curated experience than the satellite giant.
