Pandora have transformed from their free radio roots in recent years and their premium options are giving them a whole new lease of life with booming revenues.
Pandora have released their earnings report for Q3 and shows the music streaming company growing steadily whilst they continue their journey into premium streaming. Their ad-supported services showed a decent 6% growth from the same period last year with $291.9 million in ad-revenue but the real success story is in Pandora Plus and Premium.
It’s been over a year-and-a-half since they launched Premium, offering an on-demand streaming service like Spotify on their platform which had up until then run on a radio-like stream based on artists or tracks you chose. Pandora’s free streaming is still their most popular offering but Plus and Premium is where their growth is really taking off. Their two paid offerings made $125.8 million in Pandora’s Q3, which is a 49% increase on the same period in 2017.
Revenues for the quarter came in at a total of $417.6 million, a 16% increase year-on-year and higher than their estimate of $401.29 million. Like Spotify and many other streaming startups, Pandora are yet to make a profit and their non-GAAP net loss for the period was $15.5 million – $0.06 per share. It’s an improvement on 2017’s Q3 when the company made a net loss of $15.9 million, however slight.
Pandora’s paid tiers saw great growth for the quarter with 784,000 new subscribers in the 3 month period. Their total number of subscribers now equals around 6.8 million across both Plus and Premium. Overall, including their incredibly popular free streaming platform, their total active users reached 68.8 million by the 30th September.
Pandora’s CEO, Roger Lynch said in a release: “I’m proud of the progress we’ve made over the past year to reinvigorate Pandora. A year ago, we committed to drive listener engagement through product innovation, expand our content, and increase distribution partnerships. We also prioritised making our ad tech capabilities a strategic advantage. And we executed. We launched new products like Premium Access, delivering on-demand functionality and improved listener engagement in our ad-supported tier; forged partnerships with leading brands such as T-Mobile, AT&T, Comcast, and Snap; and solidified our global leadership in digital audio advertising with the acquisition of AdsWizz and the launch of our programmatic audio marketplace.”
This earnings report marks the first financial release by the music streaming company since they agreed to be purchased by Sirius XM Holdings in September for $3.5 billion in an “all-stock transaction”. The satellite and digital radio company look to close the deal for sure in the first quarter of 2019 bringing exclusive content to Pandora, extra revenue streams to Sirius XM Holdings, and co-marketing opportunities for the both of them.
Lynch continued: “Looking ahead, I couldn’t be more excited about Pandora joining forces with Sirius XM. A combined Pandora-Sirius XM will create the world’s largest audio entertainment company, bringing Pandora additional resources to accelerate growth and building on Sirius XM’s leadership in the car, subscription expertise, and unique content.”