Pandora Still Bleeding Listeners, Beating Estimates

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Pandora Media Inc. (NYSE: P) reported second-quarter results after markets closed Monday. For the quarter, the Internet radio company posted an adjusted diluted net loss per share of $0.21 on revenues of $376.83 million. In the same period a year ago, the company reported a net loss of $0.12 on revenues of $343.02 million. Second-quarter results compare to the consensus estimate for a net loss of $0.24 on $368.87 million in revenues.

Advertising revenue totaled $278.2 million, a 5% year-over-year increase. Advertising growth was enabled by improvements in effective CPMs coupled with higher ad-loads relative to the year-ago period.

Total paid subscribers increased from 3.93 million in the year-ago quarter to 4.86 million, growing approximately 24% year over year. Subscription and other revenue totaled $68.9 million, a 25% year-over-year increase.

In the closely watched metric of active listeners, Pandora reported 76 million compared with 76.7 million in the first quarter of 2017 and 79.4 million in the second quarter last year. Total listener hours fell 7.8% in the quarter from 5.66 billion a year ago to 5.22 billion.

The company said earlier today that is shutting down its service in Australia and New Zealand, effective at the end of the day. The United States now becomes Pandora’s sole audience.

The company will announce guidance on its conference call this afternoon. Analysts are looking for a third-quarter net loss of $0.07 and revenues of $407.48 million. For the full year analysts expect a net loss of $0.50 and revenues of $1.56 billion.

The company’s CFO and interim CEO, Naveen Chopra, said:

We have taken a number of steps to hone the company’s strategy and position Pandora to continue to build audience and extend monetization through a combination of advertising and subscription revenue streams. In addition to exceeding our revenue expectations this quarter, we also announced several important strategic moves including a $480 million investment from Sirius XM, the sale of Ticketfly, and changes to our board and management team. We remain laser-focused on execution that attracts listeners and investments that drive the growth and monetization of our audience.

Shares traded closed down 5.8% at $8.95 after Monday’s regular session but are trading up about 3.2% in the after-hours market at $9.24. The stock’s 52-week range is $6.76 to $14.98, and the 12-month target price for the shares was $11.72 before this afternoon’s report.