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Pandora's (P) Q2 Earnings Lag Estimates, Revenues Beat
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Pandora Media reported second-quarter 2018 adjusted loss of 15 cents per share, wider than the Zacks Consensus Estimate of a loss of 14 cents. However, the figure was narrower than the year-ago quarter’s loss of 21 cents.
Revenues, excluding Australia and New Zealand (“ANZ”) and Ticketfly, increased 11.7% year over year to $384.8 million, beating the Zacks Consensus Estimate of $374 million.
Quarter Details
Advertising revenues (70.5% of total revenues) declined 1.9% from the year-ago quarter to $271.1 million.
Total listener hours fell 2.5% on a year-over-year basis to 5.09 billion in the quarter and the number of active listeners was 71.4 million.
Subscription and other revenues (29.6% of total revenues), excluding ANZ and Ticketfly, surged 66.7% year over year to $113.7 million on the back of growing Premium subscribers and higher average revenue per paid subscribers (ARPUs). Total subscribers increased 23% to 5.98 million.
In the reported quarter, ARPU was $6.52, up 35.3% from the year-ago quarter, driven by growth in Pandora Premium subscribers.
Licensing costs per paid subscriber (LPU) was $4.78, up 53.7% year over year. This increase was largely due to the shift to Premium tier from Plus tier.
Operating Details
Pandora’s non-GAAP gross margin of 33.3% contracted 340 basis points (bps) due to minimum guarantee for content rights. Ad RPM grew 3.9% year over year to $68.75. Ad LPM grew 2.9% to $36.87.
Reported operating expenses, excluding ANZ and Ticketfly, declined 8.2% from the year-ago quarter to $219.3 million. sales & marketing (S&M) expense declined 6.2% year over year to $40.4 million. However, product development and general & administrative (G&A) increased 12.6% and 17% respectively year over year.
Pandora’s adjusted EBITDA loss was $34.6 million compared with a loss of $41.9 million in the year-ago quarter.
Pandora Media, Inc. Price, Consensus and EPS Surprise
Pandora exited the quarter with $420.8 million in cash and investments, down from $544.4 million at the end of the previous quarter due to the acquisition of AdsWizz.
In the reported quarter, net cash outflow from operating activities was $49.4 million against net cash inflow of $17.4 million in the previous quarter.
Guidance
For third-quarter 2018, management expects revenues in the range of $390-$405 million. Adjusted EBITDA is expected to be in the range of a loss of $10-25 million. Management expects shares outstanding to be approximately 269 million.
Long-term earnings growth for Science Applications, Seagate and Vishay is projected to be 5%, 18.9% and 8%, respectively.
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Pandora's (P) Q2 Earnings Lag Estimates, Revenues Beat
Pandora Media reported second-quarter 2018 adjusted loss of 15 cents per share, wider than the Zacks Consensus Estimate of a loss of 14 cents. However, the figure was narrower than the year-ago quarter’s loss of 21 cents.
Revenues, excluding Australia and New Zealand (“ANZ”) and Ticketfly, increased 11.7% year over year to $384.8 million, beating the Zacks Consensus Estimate of $374 million.
Quarter Details
Advertising revenues (70.5% of total revenues) declined 1.9% from the year-ago quarter to $271.1 million.
Total listener hours fell 2.5% on a year-over-year basis to 5.09 billion in the quarter and the number of active listeners was 71.4 million.
Subscription and other revenues (29.6% of total revenues), excluding ANZ and Ticketfly, surged 66.7% year over year to $113.7 million on the back of growing Premium subscribers and higher average revenue per paid subscribers (ARPUs). Total subscribers increased 23% to 5.98 million.
In the reported quarter, ARPU was $6.52, up 35.3% from the year-ago quarter, driven by growth in Pandora Premium subscribers.
Licensing costs per paid subscriber (LPU) was $4.78, up 53.7% year over year. This increase was largely due to the shift to Premium tier from Plus tier.
Operating Details
Pandora’s non-GAAP gross margin of 33.3% contracted 340 basis points (bps) due to minimum guarantee for content rights. Ad RPM grew 3.9% year over year to $68.75. Ad LPM grew 2.9% to $36.87.
Reported operating expenses, excluding ANZ and Ticketfly, declined 8.2% from the year-ago quarter to $219.3 million. sales & marketing (S&M) expense declined 6.2% year over year to $40.4 million. However, product development and general & administrative (G&A) increased 12.6% and 17% respectively year over year.
Pandora’s adjusted EBITDA loss was $34.6 million compared with a loss of $41.9 million in the year-ago quarter.
Pandora Media, Inc. Price, Consensus and EPS Surprise
Pandora Media, Inc. Price, Consensus and EPS Surprise | Pandora Media, Inc. Quote
Balance Sheet & Cash Flow
Pandora exited the quarter with $420.8 million in cash and investments, down from $544.4 million at the end of the previous quarter due to the acquisition of AdsWizz.
In the reported quarter, net cash outflow from operating activities was $49.4 million against net cash inflow of $17.4 million in the previous quarter.
Guidance
For third-quarter 2018, management expects revenues in the range of $390-$405 million. Adjusted EBITDA is expected to be in the range of a loss of $10-25 million. Management expects shares outstanding to be approximately 269 million.
Zacks Rank & Stocks to Consider
Pandora currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Science Applications International Corporation (SAIC - Free Report) , Seagate Technology (STX - Free Report) and Vishay Intertechnology (VSH - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Science Applications, Seagate and Vishay is projected to be 5%, 18.9% and 8%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>