News August 2, 2018

Pandora’s Q2 report: more subscribers lessen losses but listener hours & active users, are down

Staff Writer
Pandora’s Q2 report: more subscribers lessen losses but listener hours & active users, are down

’s exiting of the Australian and New Zealand markets has not affected its revenue improvement.

In its second-quarter financials, the Oakland, California-based company seemed to have turned the corner, helped by some recent executive hires.

More work has to be done, but the markets were impressed, as Pandora shares rose 12% after the financials were announced.

Revenue grew 12% to US$384.8 million, and $10 million above what it had forecast.

Subscription revenue jumped 25% to $68.9 million, with Pandora adding 351,000 subscribers in three months to hit 6 million by June 30.

The number of these have been steadily rising – from 4.86 million in June 2017 to 5.19 million in September to 5.49 in December and 5.63 million in March.

Pandora did not specify the number of Premium subscribers, who pay $9.99 per month (or $14.99 for the family plan) and Pandora Plus customers that pay $4.99 for ad-free radio.

But the growth of subs revenue indicates the company has tapped into the lucrative Premium tier.

Ad RPM (or revenue per thousand impressions) was up 24% to $66.15 from $53.34 a year earlier.

“We are on track to get back on growth in ad revenue,” said Pandora chief executive Roger Lynch, who joined last year,

Monthly active users continued their slow decline, dropping to 71.4 million from 76 million in Q2 2017.

Pandora was last profitable in 2014, but its losses are lessening, narrowing to $99.5 million in the three months ended June 30 from $289.7 million a year earlier.

Total Pandora listener hours were 5.09 billion for the second quarter of 2018, down from 5.22 billion for Q2 2017.

The company is being optimistic about its performance in the third quarter, expecting revenue of between $390 million and $405 million, above financial analysts’ forecast of $394.6 million.

Lynch is ticking off a couple of new features that he thinks will improve financial performance.

The company was late introducing its family plan for Premium, but since its addition on May 29, it seems to have driven traffic.

Lynch confirmed paid subscribers listen to music three times longer than their ad-supported counterparts.

Pandora has also struck new partnerships – AT&T, T-Mobile, Snap and live financial news network Cheddar – designed to bolster its customer base “at the lowest acquisition costs” by being offered as a package to those companies’ customers.

These also “position us to further accelerate growth and ownership of the expanding digital audio marketplace,” Lynch said.

New features have been customised playlists based on past listening tastes for premium users, and speeding up access to its music through the Snapchat app.

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