Pandora in 2016: $1.39bn revenues and a $343m net loss


Pandora has announced its financial results for the final quarter of 2016, as well as the full year. The story for the streaming service: growth in both its revenues and its net losses.

Pandora reported $392.6m revenues in Q4 2016, up 17% year-on-year. However, its net loss increased from $19.4m to $90m over the same period. Active listeners fell slightly from 81.1 million to 81 million, while total listener hours grew by 0.4% to 5.38bn.

For the full year of 2016, Pandora’s revenues were $1.39bn, up 19% on 2015. However, its net loss increased from $169.7m in 2015 to $343m in 2016. It was a billion-dollar advertising year for Pandora, thanks to $1.07bn of ad revenues compared to $225.8m of subscriptions income.

Pandora relaunched its mid-tier subscription offering in September, and saw its subscriber total grow by 12% year-on-year to 4.4 million by the end of the year as a result.

The company also saw its ticketing service revenues grow by 20% year-on-year to $19.4m in the final quarter of 2016, with its Ticketfly subsidiary generating $86.6m for the full year.

The financials break down Pandora’s main costs in the final quarter of 2016. Out of the $392.6m in revenues, $212.1m went on content acquisition costs – royalties – with $133.5m spent on sales and marketing, $38.3m on product development, and $46.9m on general and administrative costs.

(Pandora also reported its ‘adjusted EBITDA’ figure: a loss of $30.4m compared to a profit of $24.8m in Q4 2015. Among the exclusions from that figure last quarter: $34.6m in stock-based compensation expenses.)

Pandora did beat its own guidance for the fourth quarter: it had predicted between $362m and $374m of revenues, while its adjusted EBITDA loss of $30.4m compared favourably to its prediction of $39m-$51m.

“We made significant progress in 2016 by driving leverage in our core business while accelerating subscriptions to our paid product,” said CEO Tim Westergren in a statement.

“We enter 2017 laser-focused on the growth of our ad-supported business, the launch and growth of our subscription products, and an artist-to-fan platform to drive listener engagement and ticket sales. These three strategic pillars operate in harmony to create mutually reinforcing revenue streams across a large and growing addressable market.”

We’ll find out what the markets make of the results tonight, as well as what Westergren and his colleagues have to say about the quarter in Pandora’s earnings call. We’ll bring you news on both in the morning.

Stuart Dredge

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