Pandora Well Positioned for Mobile Growth: CEO
Pandora Media should see continued growth in its mobile revenues as marketers spend more on mobile ads, the company’s CEO Joseph Kennedy told CNBC’s "Closing Bell" after it announced better-than-expected quarterly earnings.
The stock rose sharply in extended hours trading. (Click here to get the latest quotes for Pandora in the after-hours.)
“We’re seeing our monetization strategies, particularly on mobile, get more and more traction,” the Internet radio CEO said. “And that’s been reflected in the improving results.”
For the fiscal second quarter, Pandora broke-even, excluding items, on a per share basis on revenue of $101.3 million. Revenue rose 25.4 percent from the previous quarter and 51 percent year over year. Analysts were looking for a loss of 3 cents per share on revenue of $100.9 million, according to estimates from Thomson Reuters.
Total mobile revenues in the quarter grew even faster, jumping 86 percent year-over-year to $59.2 million. (Read More: Option Bulls Want to Rock With Pandora.)
Kennedy expects continued growth in mobile revenue. “Marketers need to follow their consumers where those consumers are spending time and that is on mobile,” Kennedy said. With a strong return on investment in mobile advertising, marketers can and should spend more money on mobile, he added.
Kennedy said Pandora is “well positioned to help those marketers reach their consumers on mobile.”
As sales growth picks up, Pandora is closing the gap between the growth in revenue and the growth in hours Pandora users spend listening to music, which helps earnings. Kennedy noted “the leverage in the Pandora model really comes when the revenue grows faster than the hours.”
Looking ahead to the fiscal third quarter, Pandora expects earnings to come in between break-even and a penny per share on revenue of $115 million to $118 million. The Street was looking for break-even results on a per share basis and revenue of $114 million.
Also, it was revealed on the conference call that CFO Steve Cakebread will be leaving at the end of year.