Pandora Q1 2018 Beats Expectations, Listener Hours Fall
Pandora reported smaller than anticipated losses in Q1 2018, sending the stock up 8% in after hours trading. Total Pandora Plus and Premium subscribers grew 19 Year over year to 5.63 million, but listener hours fell almost 5% compared to the same period last year.
Pandora Q1 2018 Overview
- Q1 Revenue was $319.2 million, growing 12% year-over-year excluding ANZ & Ticketfly
- Q1 Subscription revenue was $104.7 million, growing 63% year-over-year excluding ANZ & Ticketfly
- Ad RPM hit an all-time Q1 high of $55.52, growing 9% year-over-year
- Total subscribers were 5.63 million, growing 19% year-over-year
- Q1 Revenue and Adjusted EBITDA significantly exceeded our forecast
- Announced acquisition of AdsWizz, creating the largest digital audio advertising ecosystem globally
"Music streaming and digital audio continue to see massive growth, and this quarter we took key steps to position Pandora to capture this significant opportunity,” said Roger Lynch, CEO of Pandora. “We improved audience metrics – in part by increasing usage of Premium Access, which gives ad-supported listeners the ability to enjoy Pandora Premium after viewing a 15-second ad. We also accelerated our ad-tech roadmap with the acquisition of AdsWizz, and launched exciting new product features like personalized playlists. Looking ahead, Pandora is exactly where we want to be: at the center of a growing market with huge potential.”
First Quarter 2018 Financial Results & Highlights from Pandora
Revenue: For the first quarter of 2018, total consolidated revenue was $319.2 million, an approximate 12% year-over-year increase compared to the year-ago quarter, excluding Australia, New Zealand and Ticketfly. This included $214.6 million in advertising revenue and $104.7 million in subscription revenue. We discontinued our service in Australia and New Zealand on July 31, 2017, and Ticketfly was sold to Eventbrite on September 1, 2017.
GAAP Net Loss and Adjusted EBITDA: For the first quarter of 2018, GAAP net loss was $131.7 million compared to a net loss of $132.3 million in the same quarter last year. Adjusted EBITDA was a loss of $73.3 million, compared to a loss of $71.3 million in the same quarter last year.
Cash and Investments: For the first quarter of 2018, the Company ended with $544.4 million in cash and investments, compared to $500.8 million at the end of the prior quarter.
Strategic Acquisition: Pandora announced the acquisition of AdsWizz, signaling a clear acceleration of our ad tech capabilities, allowing us to transition from the largest ad supported digital audio publisher to the largest ad-supported digital audio platform. AdsWizz has customers in 39 countries, and offers a full stack of tools and services ranging from programmatic audio on both the demand and supply sides to ad serving technology to ROI measurement to podcast tools and self-serve capabilities.
Product & Partnership Launches: Premium Access, which has been used by approximately 13 million listeners to date, continues to showcase the full capabilities of our premiere subscription product, for free, following a view of a 15-second ad. The Company additionally launched Personalized Soundtracks, which provide unique playlists tailored for each listener and are powered by the Music Genome Project – one of the richest data-sets of music information in the world.
Pandora also continued to expand its footprint, launching Pandora Premium on Amazon Fire TV, Fitbit Versa and on the web in the first quarter. Additionally, Pandora announced a partnership with leading smart link aggregator, Linkfire, to make discovering music easier for fans, while amplifying marketing efforts for labels and artists.
Listener Hours: Total listener hours were 4.96 billion for the first quarter of 2018, compared to 5.21 billion for the same period of the prior year.
Active Listeners: Active listeners were 72.3 million at the end of the first quarter of 2018.
Subscribers: Pandora Plus and Pandora Premium subscribers were 5.63 million at the end of the first quarter of 2018.
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“Music streaming and digital audio continue to see massive growth” – “Pandora isn’t available where you are… yet.
Pandora is only available in the U.S. right now – but we are working on bringing our music service to other parts of the world.” – expansion plans?