XM Satellite Radio Holdings Inc. reported revenues of $264 million in the 2007 first quarter, an increase of 27 percent over revenues of $208 million in the same period in 2006, XM announced April 26.

"The company recently surpassed 8 million subscribers, quite an achievement in something that many thought was unthinkable when we started the business a number of years ago," XM CEO Hugh Panero said "That’s the first quarter. We are pleased with our overall results."

XM ended the quarter with more than 7.9 million subscribers, up from 6.5 million at the close of the 2006 first quarter. XM recorded 285,000 net new subscribers in the 2007 first quarter, down from 569,000 in the 2006 first quarter.

"During the quarter, we improved our retail performance, experienced strong OEM gross additions, extended our distribution agreements with Toyota and Honda, enhanced our customer service, maintained our churn rate at approximately 1.8 percent for the third consecutive quarter and strengthened key financial metrics for our business," Panero said. "These results were driven by the operational initiatives we put in place over the last several quarters."

XM’s first quarter loss narrowed to $122 million, an 18 percent improvement compared to the 2006 first quarter loss of $149 million. The adjusted operating loss was $27 million in the 2007 first quarter, which closed March 31, compared to $49 million in the same period in 2006.

In the 2007 first quarter, XM’s subscriber acquisition costs, a component of cost per gross addition (CPGA), was $65, compared to $59 in the first quarter of 2006. CPGA in the 2007 first quarter was $103 up from $93 in the 2006 first quarter.

The 2007 first quarter adjusted operating loss included $8 million in expenses related to the proposed merger with Sirius Satellite Radio.

In February, XM and Sirius announced their entering into a definitive agreement to combine in a tax-free, all-stock merger. Under that agreement, XM shareholders would receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM. XM and Sirius shareholders would each own approximately 50 percent of the combined company.

The transaction faces stiff opposition from many competitors and consumer interest groups and must be approved by the U.S. Department of Justice and the Federal Communications Commission.

The companies hope to complete the deal before the end of 2007.