Pandora’s revenue in Q1 was $316 million. Advertising revenue came in at $223.3 million, compared to $220.3 million in Q1 of 2016. The company said the only-modest year-over-year growth was due to several factors, including reassigning accounts to salespeople after a workforce reduction in January and clients signing contracts later than expected in the quarter.
In Q2, the company expects revenue to be in the range of $360 million to $375 million, which reflects 7% year-over-year growth and 16% growth relative to the prior quarter. CFO Naveen Chopra says he expects revenue to build throughout the year. “We are confident in our strategy based on leveraging a suite of products that works together to strengthen our value proposition. Our expectation is that topline growth in 2017 will be heavily loaded towards the back half. Due to issues with third-party billing integrations, the ramp of Premium from mid-March to general availability took longer than expected. Since Premium only fully launched in mid-April, and the vast majority of Premium users will remain in trial mode during Q2, and subscription revenue will not ramp significantly until the third and fourth quarter.”
First quarter subscription and other revenue was $64.9 million, an increase of 19% over the same period in 2016. The subscriber growth was achieved while Pandora Premium was only rolled out to a very limited number of users during the last couple of weeks in the quarter.
Listener hours were down in the quarter. The company says listener hours were actively managed to optimize margins in Pandora’s ad-supported service. Total listener hours were 5.21 billion for the first quarter of 2017, compared to 5.52 billion for the same period of the prior year. Active listeners were also down. Active listeners were 76.7 million at the end of the first quarter of 2017, compared to 79.4 million for the same period of the prior year.
Pandora also added 320,000 Pandora Plus subscriptions to end the quarter with 4.71 million total subscriptions. It was the second-largest number of net additions the company has had in any quarter since it instituted 40-hour mobile caps in 2013.
One of Pandora’s many problems, in Los Angeles for example, is that the LA/West Coast top Pandora exec is an ex-LA radio market manager. And he of course brought in disgruntled LA radio salespeople….while there best and most successful LA radio salespeople remained at their stations and continue to do very well. You can’t have a new product/ new industry in a top market looked LA, run by and sold by people who fled a very successful industry where they were having problems. They are going to take their problems with them, and after they sold the low-hanging fruit, these people are not innovators and do not know how to drive genuinely new business. Thus, Pandora’s revenues are basically flat while other digital companies are up year-to-year 30%, 40%, and more.