Why Pandora Earnings Aren’t Enough

Print Email

Pandora Media, Inc. (NYSE: P) released its most recent earnings report after markets closed on Thursday. The company said that it had a fourth quarter net loss of $0.13 per share and $392.6 million in revenue, versus consensus estimates from Thomson Reuters that called for a net loss of $0.21 per share and $374.24 million in revenue. The same period from last year had $0.04 in earnings per share (EPS) and $336.16 million in revenue.

During this quarter, advertising revenue grew 16% to $313.3 million. Subscription and other revenue was $59.8 million, a 5% year-over-year increase. Ticketing service revenue was $19.4 million, growing approximately 20% year-over-year.

At the same time, total listener hours increased 0.4% to 5.38 billion, compared to 5.37 billion for the same period of the prior year. Active listeners were 81.0 million at the end of the fourth quarter, compared to 81.1 million. Subscribers grew 12% to 4.39 million.

In terms of guidance for the first quarter, the company expects to see revenue in the range of $310 million to $320 million with an adjusted EBITDA loss in the range of $80 million to $70 million. The consensus estimates are calling for a net loss of $0.27 per share and $341.74 million in revenue for the coming quarter.

On the books, cash and investments totaled $243.3 million at the end of the quarter, versus $264.0 million at the end of the prior quarter.

Tim Westergren, founder and CEO of Pandora, commented:

We made significant progress in 2016 by driving leverage in our core business while accelerating subscriptions to our paid product. We enter 2017 laser-focused on the growth of our ad-supported business, the launch and growth of our subscription products, and an artist-to-fan platform to drive listener engagement and ticket sales. These three strategic pillars operate in harmony to create mutually reinforcing revenue streams across a large and growing addressable market.

Shares of Pandora closed Thursday at $12.61, with a consensus analyst price target of $14.59 and a 52-week trading range of $7.10 to $14.98. After the earnings report was released, the stock was initially down 3% at $12.21 in the after-hours trading session.