Online streaming-music service Pandorareported better-than-expected revenue and raised its full-year guidance as more people tuned in.
After the earnings announcement, the company's shares jumped in trading after the closing bell.(Click here to get the latest quote for Pandora.)
"We are making excellent progress on all fronts — consumer adoption continues at an extraordinary pace," Pandora Chief Executive Joe Kennedy said in an interview with Reuters.
Pandora raised its full-year revenue outlook to a range of $420 million to $427 million from a previous forecast of $410 million to $420 million.
Pandora said it expects to narrow its non-GAAP net loss to a range of 7 to 11 cents per share, from a previous forecast of 11 to 16 cents.
"It was a good quarter and a very good start to the year," said BMO Capital Markets analyst Edward Williams.
Pandora is a mostly free music service that recommends different songs based on listener's playlists. Supported mainly by advertising, it competes with traditional radio companies such as Clear Channel, satellite radio provider Sirius XM Radio, and new upstarts like the popular Spotify.
The decade-old company has yet to turn a profit as it spends money to build up its sales force. The bigger Pandora's audience gets the more it has to pay record labels fees for broadcasting their music.
The company is also going to aggressively build out its local sales force, Kennedy said on a call with analysts, so it can better compete with traditional radio stations that already have bulked up their sales departments.
Pandora announced in May that Triton Digital will measure its audience size and reach, an important move since advertisers turn to third party providers for information about listeners.
For the first quarter, the company posted a loss excluding items of 9 cents per share. Pandora said revenue rose 58 percent to $80.8 million. No year-earlier numbers were available for the first quarter as Pandora just went public last June.
Analysts had expected the company to report a loss excluding items of 18 cents a share on $74.3 million in revenue, according to a consensus estimate from Thomson Reuters.
Shares of Pandora have fallen more than 12 percent in the past week as many social media stocks have taken a hit this week along with Facebook , which started trading on Friday.