Analyst: Pandora’s April Audience Metrics Are Solid

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Source: Pandora

The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.

Before the market open on Tuesday, Pandora (NYSE:P) released solid audience metrics for the month of April. Listener hours were 1.7 billion, down sequentially from 1.71 billion last month, but up from 1.31 billion last year. Our model forecasts 5.05 billion listener hours for the June quarter, up roughly 5 percent sequentially, so the company appears to be tracking roughly in line after one month. Listener hours per day increased to roughly 56.7 million in April from roughly 55.2 million in March, explaining the slight sequential decline and reflecting a run rate above our forecast for the quarter.

Share of total U.S. radio listening increased to 9.28 percent in April from 9.11 percent last month and 7.33 percent last year. Active listeners increased to 76 million from 75.3 million last month and 70.1 million last year. We note that April 2013 metrics were impacted by the monthly cap on free mobile listener hours per month in place at the time. We expect listener hour strength over the next several months as in-car integration increases. We also expect revenue per thousand listener hours (RPMs) to trend up, as increased opportunities for local ads and improving measurement techniques increase Pandora’s appeal among advertisers.

In March, Pandora stated that it will no longer disclose key audience metrics on a monthly basis, after having done so for two years. The final monthly release will be next month, for the May 2014 metrics, although quarterly disclosures will continue. According to the company, the monthly metrics were provided to help advertisers make informed buying decisions. As Pandora believes advertisers can now make accurate side-by-side comparisons between the company and a variety of competitors through different measurement tools, it no longer believes that there is a business reason to provide monthly metrics.

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