Earlier this month, Sirius XM (Nasdaq: SIRI) announced that it had added 583,249 net subscribers for Q2 --- no small feat considering the sluggish economy and slumping auto sales. And the company now expects to add 1.1 million net subscribers for 2010. But questions remain about the company's financial health and future prospects. So what should investors be looking for when Sirius XM reports earnings next week? I recently asked Ryan Saghir, managing editor of Orbitcast , a website that covers the latest news on Sirius XM and competing industries. Orbitcast is not affiliated with Sirius XM, and Ryan doesn't own shares of Sirius XM.

Mac Greer: What are two or three things you are looking for in the upcoming earnings release?

Ryan Saghir: I think the preview always gives us the good news that leads us to believe that there is a light at the end of the tunnel and that there are constant improvements. What I want to see is further backing, further proof behind them. We see some really good, solid numbers. Their subscriber growth, the churn numbers are down, but I want to look into the details and really see what sort of, what does this mean from a business standpoint? The conversion rate seems to be really good, too, so these are all three points that we want to focus on, but how are they doing money-wise? How are they doing overall? What are acquisition costs? What is RPU doing? Those are the two key numbers, RPU and SAC really. I want to see, are those going up and down? I think it is very positive, but let's wait and see for the full financial results before we start popping the Champagne.

Greer: And Ryan, Sirius XM is growing their subscriber base, but at a slower rate than the combined growth for both companies, pre-merger, back in 2008. Now obviously the economy was a lot healthier back then, but what type of growth rate does the company need to achieve?

Saghir: I think at this point, anything that is in the positive is good news. I am happy to see that there is not any losing any subscribers because as they get bigger and bigger, the percentage, while there is a percentage churn rate, the absolute number of that gets larger and larger as they continue to grow. So I think anything in the positive, just keeping, understanding the economic, current economic landscape, understanding all of that, anything that shows positive, I am setting the bar low, because as long as they are not losing subscribers, they are doing better off than what we saw in the past, when they did start to go negative.

Greer: What do you think the biggest misconception is about Sirius XM's business?

Saghir: There is a huge underestimation about the level of conversion rate. I think it just consistently surprises me every time I see such a high conversion rate, almost 50% of people who are exposed to it tend to buy it. That is amazing. And I don't think that that is a point that they drive home enough. They really need to show that because that really says a lot about the business. All they need to do is get the product in front of consumers, and they are guaranteed to get almost 50% of those people. I don't think they get enough credit for their conversion rate.

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Mac Greer doesn't have a position in any of the companies listed. He is a Sirius XM subscriber. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.