Ad revenue (79% of total revenue) rose 36% Y/Y in FQ3 to $144.3M, after growing 44% in FQ2. Mobile ad sales grew 58% to $104.9M.
Salesforce investments continue to pressure EPS: sales/marketing spend rose 90% Y/Y to $50.6M (they rose 95% in FQ2). But content acquisition costs only rose 32% (they rose 35% in FQ2), trailing revenue growth of 50% thanks to improved monetization.
Pandora's total ad revenue per thousand listening hours (RPM) rose to $40.11 from $38.87 in FQ2 and $32.40 a year ago. A gap still remains between mobile and PC monetization, but it's narrowing: Mobile ad RPM was $36.00, up from $33.90 in FQ2 and a mere $25.59 a year ago, and PC ad RPM was $57.54, down slightly from $59.51 in FQ2 and $58.03 a year ago.
Listener hours, aided by the September removal of Pandora's free mobile monthly listened cap, totaled 4.18B, up 8% Q/Q and 17% Y/Y.