Pandora Crushes Earnings, Raises Outlook

Pandora Media Inc. (NYSE: P) reported first-quarter results after markets closed Thursday. For the quarter, the Internet radio company posted diluted net loss per share of $0.23 on revenues of $297.31 million. In the same period a year ago, the company reported a net loss of $0.51 on revenues of $230.76 million. First-quarter results compare to the Thomson Reuters consensus estimate for a net loss of $0.32 on $286.49 million in revenues.

The company posted a consolidated adjusted EBITDA loss of $57.4 million in the quarter compared with a loss of $20.9 million a year ago. The adjusted number does not include $38.7 million in stock-based compensation expense, $13.3 million in depreciation and amortization, and $5.7 in other charges.

In the closely watched metric of active listeners, Pandora reported 79.4 million compared with 72.2 million in the same period a year ago. The not-so-good news is that Pandora reported 81.1 million active listeners at the end of December. Total listener hours rose 4% in the quarter from 5.3 billion a year ago to 5.52 billion.

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For the second quarter, Pandora is guiding revenue revenue at $345 to $355 million and an adjusted EBITDA loss in a range of $20 to $30 million. For the full 2016 fiscal year, Pandora said it expects revenue in a range of $1.41 to $1.43 billion and an adjusted EBITDA loss in a range of $50 to $70 million. The revenue estimate is higher by $10 million on either end and the EBITDA loss also improved by $10 million at either end.

Analysts were looking for a second-quarter net loss of $0.12 and revenues of $350.22 million. For the full year analysts expect a net loss of $0.47 and revenues of $1.41 billion. Pandora’s guidance is better than these estimates in every case.

The company’s founder and CEO, Tim Westergren, said:

This was a really strong start to the year, and I see clear signs of momentum across our business. Our team is rapidly bringing Pandora’s audacious strategy to life, fundamentally changing how listeners discover and enjoy music while helping artists build sustainable careers.

Shares traded up about 5% in the after-hours market at $9.85 after closing at $9.44. The stock’s 52-week range is $7.10 to $22.60. The consensus target price for the shares was $13.34 before today’s report.