Latest Pandora Monthly Audience Metrics Suggest Smooth Sailing Ahead

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

Before the market open on Wednesday, Pandora (NYSE:P) released its latest monthly audience metrics, reporting solid figures for the month of May. Listener hours were 1.73 billion, up sequentially from 1.7 billion last month and 1.35 billion last year, when the monthly cap on free mobile listener hours was in place. Our model forecasts 5.05 billion listener hours for the June quarter, up roughly 5 percent sequentially; at 3.43 billion, the company is on track to deliver 5.15 billion-5.2 billion hours for the quarter.

Listener hours per day decreased to 55.8 million in May from 56.7 million in April but were up from 43.5 million last year. Share of total U.S. radio listening decreased to 9.13 percent in May from 9.28 percent last month, but was up from 7.29 percent last year. Active listeners increased to 77 million in May from 76 million last month and 70.8 million last year. 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.

May 2014 will be the final month that Pandora discloses audience metrics on a monthly basis after having done so for two years. Going forward, we expect only quarterly metrics releases. 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.