Pandora has released its third-quarter financial results, capping off a busy three-month period that included its acquisition by Sirius XM. Quarterly revenue for Pandora totaled $417.6 million, up 16% from the year-ago period. That figure excludes Australia, New Zealand, and Ticketfly, but includes AdsWizz, which Pandora acquired in May.
Revenue from subscriptions rose 49% to $125.8 million while advertising revenue increased to $291.9 million. Pandora announced that its ad RPM for the period grew 11% year-on-year to reach an all-time high of $77.83. Pandora posted a net loss of $63.7 million, or 27 cents per share, a slightly smaller loss than the $66.2 million, or 34 cents per share, from the year-ago period.
The online audio company reported 68.8 million active users at the end of Q3 2018. Pandora added 784,000 subscribers during the period, with Plus and Premium subscribers numbering 6.8 million by the close of the period. The company also said that more than 32 million listeners have used its Premium Access service to date since launch.
Pandora inked many partnerships across industries during the quarter. In addition to the big ticket acquisition by Sirius XM, Pandora landed an advertising and sales deal with SoundCloud, paired up with multiple telecoms, and launched a programmatic ad marketplace on the back of its AdsWizz purchase.
“I’m proud of the progress we’ve made over the past year to reinvigorate Pandora,” CEO Roger Lynch said. “A year ago, we committed to drive listener engagement through product innovation, expand our content, and increase distribution partnerships. We also prioritized making our ad tech capabilities a strategic advantage. And we executed.”
“Our Q3 financial results, which exceeded both revenue and adjusted EBITDA guidance, showed meaningful improvement,” added CFO Naveen Chopra. “Revenue growth accelerated, thanks to better monetization and a fast-growing subscription business; gross margins are expanding as evidenced by a 500 basis point sequential improvement in Q3; and we’re operating more efficiently: we recorded a 300 basis point reduction in operating expenses (excluding marketing and subscription commissions) as a percentage of revenue. All of this puts us on track to significantly improve cash flow and adjusted EBITDA next year and beyond.”