Despite intensifying competition from larger rivals, Pandora Media Inc reported a smaller-than-expected quarterly loss on Thursday as the music streaming service provider benefited from higher subscription revenue and smaller declines in its advertising business than feared.
Shares of the Oakland, California-based company rose 7.8 percent to $6.21 after the bell.
The company said total subscription and other revenue surged 61.3 percent to $104.7 million, slightly above analysts’ estimate of $104.6 million, according to Thomson Reuters I/B/E/S.
Pandora’s advertising revenue fell 3.9 percent to $214.6 million, but topped analysts’ estimate of $198.7 million.
The company faces stiff competition from deep-pocketed music streaming rivals such as Apple Inc’s Apple Music and Sweden’s Spotify Technology SA, whose results on Wednesday failed to enthuse investors.
Those newer services have plucked away many former Pandora listeners, but the Oakland company has started courting them to come back with new offerings such as its “Premium Access” feature, which lets users try out its ad-free, on-demand service after watching a video ad.
“The recapture of our prior listeners is a very, very important factor for us,” Chief Executive Roger Lynch told Reuters in an interview. “March was the first time in 18 months where we increased the recapture of lapsed listeners.”
For paid users, Pandora’s revenue per user jumped to $6.30, up nearly a third from $4.76 a year ago. Pandora Chief Financial Officer Naveen Chopra said that was primarily a result of users opting for Pandora’s $9.99 month “Premium” plan, which competes against Apple Music and Spotify to let users select what songs to listen to, rather than its older “Plus” plan for ad-free radio stations where users cannot select the songs.