Pandora's (P) soaring sales/marketing spend (+95% Y/Y in FQ2 to $46M, well above rev. growth of 58%) likely has much to do with its mixed guidance. The company has been investing heavily in growing its local ad salesforce.
On the other hand, improved monetization resulted in content acquisition cost growth (+35% Y/Y to $81.8M) being well below rev. growth, a change of pace from not too long ago.
Pandora's mobile/connected device ad revenue per thousand listening hours (RPM) surged 46% Q/Q (aided by seasonality) and 53% Y/Y (no seasonality here) to $33.90. In addition, PC ad RPM +23% Q/Q and +4% Y/Y to $59.31.
Total ad revenue +44% Y/Y to $128.5M. Subscription revenue +142% to $28.8M; the mobile listening cap may have lifted subscriber adds.
Total mobile revenue +34% Q/Q and +92% Y/Y to $116M, and now 72% of revenue.
FQ2 listener hours totaled 3.88B, +18% Y/Y but -7% Q/Q (listening cap played a role). The Street was aware of this decline thanks to Pandora's monthly data.
FQ2 results, PR