The personalized radio service operator posted strong growth in its latest quarter.
Revenue soared 99% to $75 million in its fiscal third quarter, fueled by a 102% spike in ad revenue of $66 million and a more modest 80% surge in subscription revenue of $9 million. The performance ends Pandora's streak of six consecutive quarters of triple-digit top-line growth, but you won't see too many people complaining about a 99% leap in revenue.
Adjusted earnings checked in with a profit of $0.02 a share. This is the second quarter in a row where Pandora has surprised deficit-seeking analysts with a tweaked profit of $0.02 a share. Wall Street was settling for a small deficit on just $71.4 million in revenue.
There are now 40 million active Pandora users, 65% ahead of where Pandora was a year ago. It's a lot of people, and they're listening more per person. Pandora served up a whopping 2.1 billion hours of content during the period, more than double last year's listening time.
Analysts weren't necessarily impressed with its guidance for the current quarter. Pandora's eyeing a deficit of $0.02 a share to $0.04 a share on $80 million to $84 million in revenue. Then again, Pandora has already proved to be adept at underestimating its performance in its brief life as a public company. Three months ago it was telling Wall Street to expect a small loss in its fiscal third quarter.
Pandora's a hit as an ad service. The mere $9 million it scored in subscription revenue should be a warning to Spotify, CBS'
Pandora realizes that freeloaders can be monetized through ad revenue, and it's making sure that it has a meaty presence in next-generation dashboards. Toyota
Don't let the small earnings number or the uninspiring guidance trick you. Pandora's growth party is just getting started.