| 07 Oct 2022
Pandora revenue grew by 30 per cent in Q3 2015 amidst widening losses

MUMBAI: Music discovery platform-Pandora, in a three-month period ending 30 September 2015, witnessed a growth in revenue from $239.5 million in 2014 to $311.5 million in 2015, almost a 30 per cent increase of its total revenue. The figures are driven by advertising which stands at $254.6 million, followed by subscription, which stands at $56.9 million.

Pandora had registered $827.8 million for a nine month period, ending 30 September 2015, which is around 26 per cent higher in comparison to the same period last year from $652.8 million.

In Q3 2015, total listener hours grew 3 per cent to 5.14 billion as compared to 4.99 billion for the same period in the previous year.

“Pandora exited Q3 with strong financial results. In a quarter where a large new entrant came into the music streaming landscape and over a hundred million dollars in combined marketing was spent across the sector to drive awareness of a multitude of offerings, Pandora more than held its own for users and hours growth,” said Pandora CEO Brian McAndrews.

The cost of content acquisition has gone up, from $111.3 million in a three month period ending in 30 September 2014 to $211.2 million in a three-month period ending in 30 September 2015, which is a jump of almost 90 per cent.

In the operating expenses section, as per Q3 2015 report, loss from operation has gone up from $2 million in Q3 2014 to $ 85.8 million.

For Q3 of 2015, adjusted EBITDA was $30.6 million compared to the same quarter in the previous year, which was $24.2 million.

Pandora, which has come to terms with independent and major record companies, to pay a $90 million settlement for using recordings created before 1972, has also made it to the financials. The financial clearly stated that “adjusted EBITDA excludes expense from cost of revenue – content acquisition costs due to one-time cumulative charges, inclusive of the effect on the current quarter, of $57.9 million for the pre-1972 sound recordings settlement and $23.9 million as a result of management’s decision to forgo the application of the Radio Music Licensing Committee (‘RMLC’) publisher royalty rate from June 2013 to September 2015.”

The settlement will be paid over the period of 2016, starting from the first payment of $60 million in October 2015, with four installments of $7.5 million throughout 2016.

Pandora ended with $442.6 million in cash and investments in Q3 2015. Cash provided by operating activities was $11.9 million for the Q3 of 2015, as compared to $5.2 million in the same period of the previous year.

The company is expecting revenues to be in the range of $325 million to $330 million, whilst, adjusted EBITDA is expected to be in the range of $25 million to $30 million.

For the full year of 2015, revenue is expected to be in the range of $1.153 billion to $1.158 billion. The guidance does not include Ticketfly’s financial results for the fourth quarter of 2015 or full year of 2015.

McAndrews added, “We aggressively invested to deliver long-term growth and cement Pandora’s leadership in music. Our acquisition of Ticketfly will be truly transformative, extending our long-standing strength in music discovery to the large and fast-growing world of live events. Additionally, with our pre-1972 settlement, we are continuing to strengthen our relationships across the music landscape by resolving an historic source of tension. This progress points to a greater opportunity to work collaboratively toward a bright future for music in a digital era, those who make it, and the fans who love it.”