Pandora's (P) Q2 Loss Lower Than Expected, Cuts Sales View
Zacks Investment Research | Jul 21, 2016 11:01PM ET
Pandora Media, Inc. (NYSE:P) released its second-quarter 2016 results wherein it performed better-than-expected on the bottom line but missed the estimates for the top line. Adjusted loss per share (including stock-based compensation but excluding one-time items) of 26 cents per share compared favorably with the Zacks Consensus Estimate of a loss of 30 cents. Revenues of $343 million fell short of the Zacks Consensus Estimate of $352 million though it grew 20% year over year.
However, investors were disappointed with the top-line results as the stock is down over 8% in pre-market trading today.
Quarter Details
Revenue growth in the quarter was driven by higher advertising revenues (77.3% of total revenues), which increased 15% from the year-ago quarter to $265.1 million. Subscription service and other revenues (16%) inched up 1% year over year to $55.1 million. Revenues from ticketing services (7.5%) were $22.8 million, up 20%.
Active listeners at the end of the quarter were 78.1 million, down from 79.4 million in the prior-year quarter. Total listener hours, however, grew 7% on a year-over-year basis to 5.66 billion.
Total revenue per thousand listener hours (RPM) was $56.56 in the quarter, up nearly 5% from the year-ago quarter. The company’s total advertising revenues per thousand listener hours (Ad RPMs) increased 6.8% from the year-ago quarter to $53.34 in the reported quarter.
Pandora’s adjusted EBITDA loss came in at $25.1 million as against a profit of $16.3 million in the same quarter last year. The current figure excludes $32.4 million in expense from stock-based compensation.
Balance Sheet & Cash Flow
Pandora exited the quarter with $311.3 million in cash and investments compared with $382.5 million at the end of the last quarter. Cash used in operating activities was $45.5 million in the quarter compared with $9.9 million cash used in the prior-year quarter.
Outlook
Pandora provided outlook for the third quarter and updated the same for full year 2016.
For the third quarter of 2016, revenues are expected in a range of $360 million to $370 million. The company expects adjusted EBITDA to be in a band of loss of $5 million to profit of $5 million. Stock-based compensation expense of about $35 million, depreciation and amortization expense of $16 million, provision for income taxes of $0.5 million and other expenses are not included in the adjusted EBITDA forecast.
For 2016, revenues are now expected in a range of $1.385 billion to $1.405 billion, down from $1.41 billion to $1.43 billion expected earlier. Adjusted EBITDA loss is forecast to be in a range of $50 million to $70 million. The figure does not include an estimated stock-based compensation expense of $142 million, depreciation and amortization expense of $62 million, provision for income taxes of $0.3 million and other expenses.
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