Pandora Beats Q2 Revenue Expectations

Bay Area Internet radio service Pandora on Wednesday reported that revenue rose 51% in its fiscal-year second quarter, nearly doubling its mobile revenue from a year ago.

The company posted a loss of three cents per share, compared to a loss of four cents per share in the year-earlier quarter. Excluding approximately $6 million in stock-based compensation, it was break-even.

Revenue increased to $101 million from $67 million a year ago. Wall Street analysts polled by Thomson/Reuters had forecast a loss of three cents a share on sales of $110 million.

Ramping up mobile advertising to keep up with growing use has been a key focus for Pandora since going public more than a year ago. Total mobile sales grew 86% from the year-earlier quarter to $59 million -- nearly 60% of its overall revenue.

Total advertising revenue for the quarter was $89 million -- up 53%, while subscription and other revenue reached $12 million, representing a 36% increase.

In terms of usage, total listener hours -- a key metric for Pandora -- increased 80% to 3.3 billion from 1.8 billion a year ago. Active users grew 48% to 55 million.

“This quarter exceeded our expectations as our strong momentum continues with both listeners and advertisers,” stated Joe Kennedy, chairman and CEO of Pandora, in the earnings release. “In particular, this quarter demonstrated that our mobile monetization strategies are working.”

The music service ended the second quarter with $82 million in cash, up from nearly $81 million at the end of the first quarter.

Looking ahead, projected revenue is in the range of $115 million to $118 million for the third quarter, with adjusted earnings per share expected to be between break-even and 1 cent. It raised its full-year outlook from a range of $420 million to $427 million revenue to between $425 million and $432 million. Net loss per share is projected between four cents and eight cents.

Pandora shares were up about 11% in after-hours trading late Wednesday afternoon, pushing the stock price above $11 a share.

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