Music streaming service Pandora has filed to go public. It could end up raising as much as $100 million. Morgan Stanley and J.P. Morgan are co-managing the deal. The filing puts them on track for a mid-2011 IPO, as we reported earlier.
Some financial stats from the SEC filing: For the first nine months of 2010 it lost $328,000 on revenues of $90 million. (Michael Robertson’s $100 million revenue estimate we published earlier this tear was pretty damn close). Pandora’s fiscal year ends on January 31 (weird), but in the prior full year ended on January 31, 2010, it lost $16.7 million on revenues of $55 million. So you can see how much it got its fiscal house in order since then, adding $35 million in revenues and practically eliminating its loss. (Click financial table below to enlarge)
About 86 percent of Pandora’s revenues ($78 million) comes from advertising, the rest ($12 million)comes form subscriptions. Pandora grew revenues 187 percent in the first nine months of 2010 (through October 31), a growth rate that slightly exceeds the 185 percent revenue growth in fiscal 2010 (which was really 2009, plus January). It spends half of its revenues on “content acquisition,” or per-stream music licensing. As of October 31, 2010, it still had $41 million in cash.
According to the filing, Pandora has 80 million registered users and 800,000 songs from 80,000 artists. Registered users grew from 46 million a year ago, and 22 million in 2009. The hours of music listened to on the service similarly doubled from 1 billion hours in fiscal 2009 to 2.1 billion in fiscal 2010.
As the dominant free Internet music service on the Web, Pandora wants to expand to mobile, automobiles, and other devices. Last year, founder Tim Westergren explained to Charlie Rose how the iPhone doubled Pandora’s growth rate, and below is a more recent TCTV interview Sarah Lacy did a month ago with CTO Tom Conrad on Pandora’s auto ambitions:
Pandora Radio is an internet radio service, recommendation service, and the custodian of the Music Genome Project. Users enter a song or artist that they enjoy, and the service responds by playing selections that are musically similar. Users provide feedback on approval or disapproval of individual songs, which Pandora takes into account for future selections. While listening, users are offered the ability to buy the songs or albums at various online retailers. As part of the Music Genome Project, over...