A day after rival XM Satellite Radio (NASDAQ:XMSR) posted its fourth-quarter results, Sirius Satellite Radio (NASDAQ:SIRI) came through this Friday with numbers that also came out ahead on the top line and short on the bottom line.

The fast-growing satellite radio service provider saw fourth-quarter revenues soar 217% higher to hit $80 million, while the quarterly loss per share widened from $0.21 to $0.23.

Unlike XM, Sirius missed its loss per share target by only a penny, and there wasn't a director resigning, warning of a potential financial crisis.

Sirius closed out 2005 with 3.3 million subscribers and expects to top the 6 million mark before the end of the year. Add that to XM's expectations of more than 9 million users by year's end, and you have an explosive industry that will grow from 9.3 million subscribers to well more than 15 million in 2006.

It was a breakthrough quarter for Sirius as it managed -- for the first time ever -- to land more net subscriber additions than its larger rival XM. Yes, that's the Howard Stern migration in action (for those keeping score at home). However, despite landing more new listeners than XM for the period, Sirius still had higher subscriber acquisition costs per subscriber than its peer in this perfect duopoly. It wasn't the sales and marketing line item at fault. In fact, thanks to Stern's media publicity run leading up to his defection from terrestrial radio, sales and marketing costs only rose 24% from the fourth quarter in 2004, and Sirius still managed to land 143% more gross subscribers. The higher acquisition costs are attributed to subsidizing radio shipments and commissions; these costs may seem steep now, but they'll be more than worth it if new Sirius fans stick around for the long run.

Yes, the losses are huge at the moment, but that will change as both players continue to grow above and beyond their high fixed-cost base. XM is looking to turn positive on an operating cash flow basis later this year. And come 2010, Sirius is looking to post $3 billion in revenues along with $1 billion in free cash flow (before capital expenditures).

That may be light compared with my rosier outlook in yesterday's Dueling Fools segment, but bears of satellite radio in general would be well served to look at the future potential as much as the deficit-smeared past.

Sirius's stock price may seem steep at the moment. Based on the 2006 subscriber expectations, the market caps of XM and Sirius combine to value the average subscriber at $850. Yet the subscriber count is expected to triple over the next five years and the average revenue per subscriber is likely to go higher along the way.

XM was singled out as a recommended stock to Rule Breakers subscribers last year, in part because too many nearsighted investors are looking only at the past in approaching this dynamic space. The future is so much brighter for the industry and its players. All one has to do is turn up the volume.

Longtime Fool contributor Rick Munarriz is a Sirius subscriber, but he does not own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.