The streaming music company reported revenue of $218.9 million (up 38 percent on a non-GAAP basis) and non-GAAP earnings per share of 4 cents. Analysts had projected that the company would report revenue of $218.6 million and EPS of 3 cents.
On a GAAP basis, however, the company continues to see losses — it reported a loss of $11.7 million, or 6 cents per share, compared to $6.8 million last year. Perhaps as a result, as of 4:30pm Eastern, the company’s stock had fallen nearly 10 percent in after hours trading. (This isn’t the first time Pandora’s stock has tumbled after earnings reports, despite beating estimates.)
The company said that ad revenue was up 39 percent to $177.3 million (the company recently launched its Promoted Stations ad unit), while subscription revenue was up 35 percent to $41.6 million. It also said that total listener hours grew 29 percent year-over-year, to 5.04 billion, while the number of active listeners grew 7.5 percent, to 76.4 million.
“Our better than expected second quarter results demonstrate success and continued business acceleration as a result of our investments in mobile and local advertising,” said CEO Brian McAndrews in the earnings release, later adding, “As a company, we are united by Pandora’s clear sense of purpose to unleash the infinite power of music, and we’re attracting the brightest stars in the advertising, technology and music industries to help drive our business forward.”
Update: One of the first analyst questions focused on user growth, specifically whether that growth is slowing. McAndrews said the user numbers are seasonal, with a slowdown over the summer — although that could change as Pandora becomes “more prominent” in Internet-connected cars.
“Clearly, there’s a cap on number of people who can listen to us in certain geographies,” he said. “We feel we’re not there yet … but we’re also investing in features and in the playlist, etc., to try to get people to listen more.”