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Pandora Total Listener Hours Fall 7% As Subscriptions, Revenue Grow

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Pandora reported improved revenue and paid subscriber growth for Q3 2017, but total listeners hours fell 7% over the same quarter last year.  Paid subscriptions grew 29% year-over-year to 5.19 million, including 1 million subscribers to Pandora's Premium on-demand streaming service, which launched in May of this year. 

Some highlights:

Key User Base Metrics: 
  • Total monthly active users = 73.7M 
  • Pandora Premium paid subscribers cross the 1 million milestone in October 2017
  • Total paid subscribers (across Pandora Plus & Premium) = 5.19 million / 29% YoY increase 
  • Listeners tuning in an average of 23 hours per month
  • Daily active users on Consumer Electronic (CE) and Automotive Platforms were up 36% year-over-year
Key Financial Metrics:
  • Revenue excluding ticketing was $360.2 million, growing 9% year-over-year
  • Adjusted EBITDA loss was $5.3 million – compared to a loss of $6.6 million in the same quarter last year
  • Q2 subscription revenue was $84.4 million / 50% YoY increase
Full Report:

Pandora (NYSE: P) today announced financial results for the third quarter ended September 30, 2017.

“After just a short time here at Pandora, it’s clear to me we have a tremendous opportunity to meet the full spectrum of our listeners' and advertisers’ needs,” said Roger Lynch, president and CEO of Pandora. “We have significant scale, distribution and products that deliver a superior listening experience. We will leverage these strengths to become a more integral part of our listeners’ lives and reinforce our position as the definitive source for audio advertising.”

“We had a solid financial quarter with revenue above our mid-point and adjusted EBITDA coming in very close to the high end of our guidance,” said Naveen Chopra, CFO of Pandora." The growth we experienced in RPMs and subscription revenue indicates that our multi-tier service strategy can continue to enhance monetization in multiple listening modes. We also completed the investment by Sirius XM and the sale of Ticketfly in the quarter, strengthening our balance sheet and bringing cash and short-term investments to nearly $500 million."

Third Quarter 2017 Financial Results

Revenue: For the third quarter of 2017, total consolidated revenue was $378.6 million, an 8% year-over- year increase.

Advertising: Advertising revenue was $275.7 million, a 1% year-over-year increase. Advertising revenue growth incorporates an increase in the average price per ad, offset by a decrease in the number of ads sold.

Subscriptions: Total paid subscribers increased from 4.01 million in the third quarter of 2016 to 5.19 million in the third quarter of 2017, growing approximately 29% year-over-year. Subscription and other revenue was $84.4 million, a 50% year-over-year increase. Additionally in October, Pandora Premium surpassed 1 million paid subscribers.

Ticketing: Ticketing service revenue was $18.5 million in the third quarter of 2017, a 16% year-over-year decrease. The decline was related to the Ticketfly divestiture closing in the beginning of September, resulting in only two months of ticketing revenue in the third quarter of 2017.

GAAP Net Loss and Adjusted EBITDA: For the third quarter of 2017, GAAP net loss was $66.2 million compared to a net loss of $61.5 million in the same quarter last year. Adjusted EBITDA was a loss of $5.3 million, compared to a loss of $6.6 million in the same quarter last year.

Cash and Investments: For the third quarter of 2017, the Company ended with $499.4 million in cash and investments, compared to $227.6 million at the end of the prior quarter.

Other Business Metrics

Listener Hours: Total listener hours were 5.15 billion for the third quarter of 2017, compared to 5.40 billion for the same period of the prior year.

Active Listeners: Active listeners were 73.7 million at the end of the third quarter of 2017. The active listener number excludes approximately 1.1 million active listeners from Australia and New Zealand, following our decision to exit the business in those countries.

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