Pandora questioned on CC over listener growth, competition

Pandora (NYSE:P) ended June with 76.4M active listeners, up 7.5% from 71.1M a year earlier but down 1% from 77M at the end of May. By contrast, the company saw a 300K listener increase from May to June in 2013.

Q2 listener hours jumped 29% Y/Y to 5.04B. Favorable comps - Pandora had a 40-hour free mobile listening cap in place from March-August - helped with the growth.

The company faced several CC questions (transcript) over listener growth and competition. SunTrust asked if the Apple/Beats deal had an effect, and Canaccord suggested Pandora isn't investing heavily in customer acquisition for the time being since it still has excess ad inventory to sell.

Pandora insists the competitive landscape hasn't changed, noting it has an estimated 77.6% U.S. Web radio listening share among the top 20 properties (per Triton Digital), and argues seasonality hurt June figures. The company says it's spending more on marketing than ever, but admits it doesn't have a large budget.

The Q2 slowdown in Y/Y subscription/other revenue growth is attributed to tougher comps - the mobile listening cap led to a surge in subscriptions last year. But growth was also relatively modest on a Q/Q basis (+5%). Pandora's subscriber base grew by 100K to 3.5M.

Mobile ad revenue per thousand hours (RPM) rose 22% Y/Y to $36.00. It remained well below a PC ad RPM of $62.43 (+18%). Sales/marketing spend rose 49% to $66.2M, as Pandora continues spending heavily on sales hiring. Content acquisition costs were 52% of revenue.

Shares finished AH trading down 10.5%. Q2 results, guidance/details

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Comments (1)
  • starcorral
    , contributor
    Comments (1758) | Send Message
    Honestly - my brain can simply not wrap itself around the numbers flying around about Pandora. Very seldom does anyone have anything to say good about it. Motley Fool believes Pandora is a latent powerhouse, but everyone else says no.


    In this unusual case, I don't have enough between my ears to sell or buy more; I'll just forget it and invest my thought in the huge positions where my brain power has been sufficient to keep me well in the green.
    27 Jul 2014, 07:16 PM Reply Like
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