Growth is alive and well at Sirius (NASDAQ:SIRI). The satellite radio star saw its fourth-quarter revenue soar 142% higher to $193.4 million, and it tacked on another 905,247 net subscribers along the way.

The company's adjusted loss narrowed to $166.8 million, but that's certainly still steep. Sirius has an accumulated deficit of $3.8 billion in its brief corporate life.

True to its word, Sirius did post positive cash flow on an operating basis. Subscribers paying in advance for months -- and years -- of service will do wonders on the way to scoring free cash flow during the holiday-spiked quarter.

If you want to nitpick over the company's respectable report -- and Sirius is such a polarizing stock that you probably either love it or loathe it -- skeptics would note that Sirius is looking to add fewer subscribers in 2007 than the 2.7 net additions it landed in 2006. With the company targeting "more than 8 million" subscribers by the end of the year, Sirius may wind up with as few as 2 million more subscribers to its radio service.

This is a tough market. You see it in investor apathy when it comes to overseas player Worldspace (NASDAQ:WRSP). You see it in the recently announced "merger of equals" with rival XM Satellite Radio (NASDAQ:XMSR).

The challenge for satellite radio to grow is real. This past quarter found Sirius signing up fewer gross accounts than the same quarter a year ago while suffering through nearly three times as many deactivations.

This is to be expected. It was working off a much smaller base of listeners up for renewals a year ago. However, the medium's popularity will be tested. XM had to lower its subscriber targets three times last year. Sirius held firm until it warned of a smaller miss late last year.

Sirius is doing what it can. It has weaned its audience off costly mail-in rebates and grown its advertising presence. As a result, average monthly revenue per user has grown to $10.92 from $9.42 a year ago. The higher churn warns us that there is a limit to consumer elasticity, but Sirius knows this. It may be what prompted the merger talks in the first place.

Come back on Thursday when Tim Beyers and I will tackle the merger potential as Dueling Fools. Until then, it's OK to respect a decent report out of Sirius, even if you hate it.

XM is a former recommendation in the Rule Breakers newsletter service. To see what caused the market-beating service to recommend XM and then sell it, take a free 30-day trial today.

Longtime Fool contributor Rick Munarriz has been a Sirius satellite subscriber since 2004 and an XM subscriber since 2006. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.