Source: Sirius XM.

Audio buffs keep flocking to satellite radio. Sirius XM Holdings (NASDAQ:SIRI) posted quarterly results on Tuesday morning, raising its revenue and subscriber guidance even as it fell slightly short of expectations on both ends of the income statement. 

The satellite radio giant's first-quarter revenue rose 8%, to $1.08 billion, from the prior year's freshman quarter, fueled mostly by a 7% uptick in subscribers. Average revenue per user also inched higher. Sirius XM now has 27.7 million subscribers, and the company had its best quarter in terms of tacking on net self-pay subscribers since 2008.

Net income rose 12% to $106 million, or $0.02 a share. With high fixed costs and low variable overhead, the company's business model is scalable, so it's no surprise to see profitability growing faster than Sirius XM's top-line spurt. Work the math between the $106 million and $1.08 billion and Sirius XM is about to break into the applause-worthy ranks of growth stocks generating double-digit net profit margins. 

This would be a respectable quarter of growth for most radio broadcasters, but expectations were higher for Sirius XM. Analysts were holding out for $0.03 a share in profit on $1.09 billion in revenue. Sirius XM has been aggressively buying back stock to eat away at its gargantuan share count, but going from a fully diluted 6.2 billion to 5.6 billion over the past year wasn't enough to round up its earnings to $0.03 a share.

Some other disappointing nuggets in Sirius XM's report include sequential dips in revenue and average revenue per user. Its conversion rate on new car trial subscribers also failed to bounce back after hitting a historical low of 40% late last year, but at least it didn't head lower.

The stock opened slightly lower on Tuesday morning's disappointing performance, but shares were also closing in on a new multiyear high ahead of the report. Sirius XM offset the sting of report by bumping its subscriber and revenue guidance higher.

Sirius XM now sees itself closing out the year with 1.4 million net subscriber additions and $4.47 billion in revenue. Back in January it had only targeted $4.4 billion on the top line for all of 2015, with 1.2 million more subscribers than it had when the year began. The only sour note there is that analysts were even more ambitious, perched at a revenue forecast of $4.49 billion.

There are still positives out there. Sirius XM has now stretched its impressive streak of profitability to 17 consecutive quarters, according to S&P Capital IQ data. Yes, conversion rates have never been lower than they are now, but strong auto sales afford Sirius XM the opportunity to make it up in volume at a time when subscriber acquisition costs continue to fall. 

It wasn't a great quarter by any stretch, but once again Sirius XM bulls have potent ammo to prove the satellite radio provider isn't feeling the pinch of the connected car or any of the countless free or cheaper audio entertainment alternatives.