Pandora Earnings Means New Things for Music Industry
Despite the reported $28.6 million loss in the first quarter, Pandora (NYSE:P) had its share of good news for investors in its latest earnings report. The company clocked $125 million in sales during that period (a huge bump compared to last year) and has increased its targets for the second quarter and the rest of the year. Taken as a whole, the Pandora earnings report means new things for the music industry.
News of the sales increase — up 55 percent compared to Q1 2012 — sent Pandora surging during Thursday trading. Though shares came down 4 percent on Friday, the stock still posted a gain of 2.3 percent for the week. Investors have to be encouraged by the strong sales report, and it seems they are largely shrugging off the losses. After all, posting 700,000 new listeners in a year is enough to get anyone’s attention.
Pandora made most of its money on ad revenue, most of which was revenue from unpaid subscriptions. Skeptics who don’t believe Pandora can exist with so many zero-charge listeners will note the 49 percent jump in ad revenue, which amounted to $105 million — over 80 percent of the company’s total sales. There are indications Pandora isn’t content to stand pat, as recent announcements show the company moving into interesting territory, one traditionally occupied by FM radio stations.