Pandora Media Inc (NYSE:P) the leading Internet radio service, announced financial results for the first quarter ended March 31, 2015.
“We’ve been actively investing in every part of our business – from the music we play, to the ad technology and music maker products we offer. This quarter’s results are a reflection of those investments paying off,” stated Brian McAndrews chairman, president and CEO of Pandora. “In a time when listeners and brand partners have more choices than ever, listener hours grew, local advertisers increased their spending with us and we continued to advance our lead in digital audio by generating more demand and strong sell through.”
First Quarter 2015 Financial Results
Revenue: For the first quarter of 2015, total revenue was $230.8 million, a 19% year-over-year increase on a GAAP basis and a 28% year-over-year increase on a non-GAAP basis1. Advertising revenue was $178.7 million, a 27% year-over-year increase. Subscription and other revenue was $52.0 million, a 32% year-over-year increase on a non-GAAP basis.
Adjusted EBITDA: For the first quarter of 2015, adjusted EBITDA was a loss of $20.9 million, a 7% year-over-year improvement. Adjusted EBITDA excludes $23.2 million in expense from stock-based compensation, $4.3 million of depreciation and amortization expense, $0.1 million of provision for income taxes and $0.2 million of other income.
Cash and Investments: For the first quarter of 2015, the Company ended with $481.3 million in cash and investments, compared to $458.8 million at the end of the prior quarter. Cash provided by operating activities was $27.0 million for the first quarter of 2015, compared to $2.1 million used in operating activities in the same period of the prior year.
Other Business Metrics
Total listener hours grew 11% to 5.30 billion for the first quarter of 2015, compared to 4.80 billion for the same period last year.
Active Listeners: Active listeners were 79.2 million at the end of the first quarter of 2015, compared to 75.3 million from the same period last year.
Based on information available as of April 23, 2015, the Company is providing the following financial guidance:
Second Quarter 2015 Guidance: Revenue is expected to be in the range of $280 million to $285 million. Adjusted EBITDA is expected to be in the range of $8 million to $13 million. Adjusted EBITDA excludes forecasted stock-based compensation expense of approximately $31 million and forecasted depreciation and amortization expense of approximately $5 million and assumes minimal provision for income taxes given our net loss position. Diluted shares outstanding for the second quarter 2015 are expected to be approximately 219 million.
Full Year 2015 Guidance: Revenue is expected to be in the range of $1.16 billion to $1.18 billion. Adjusted EBITDA is expected to be in the range of $75 million to $85 million. Adjusted EBITDA excludes forecasted stock-based compensation expense of approximately $122 million and forecasted depreciation and amortization expense of approximately $23 million and assumes minimal provision for income taxes given our net loss position. Diluted shares outstanding for the full year 2015 are expected to be approximately 221 million.
Starting in 2015, the Company will adjust non-GAAP net income by considering the income tax effects of its non-GAAP adjustments. Prior to 2015, the Company’s non-GAAP effective tax rate was minimal. The Company expects that its non-GAAP effective tax rate will be minimal in periods that result in a non-GAAP net loss. For the full year 2015, the Company is currently forecasting a non-GAAP effective tax rate of approximately 30% to 35%. The Company does not expect to pay significant cash income taxes for the foreseeable future due to its net operating loss position. (Original Source)
Shares of Pandora Media closed today at $16.75, down $0.76 or 4.34%. P has a 1-year high of $30.48 and a 1-year low of $14.50. The stock’s 50-day moving average is $16.30 and its 200-day moving average is $17.69.
On the ratings front, Pandora has been the subject of a number of recent research reports. In a report released today, Maxim Group analyst John Tinker maintained a Hold rating on P, without suggesting a price target. Separately, BMO’s Edward Williams also came out today, reiterating a Buy rating on the stock with a $20 price target.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, John Tinker and Edward Williams have a total average return of 6.9% and 18.9% respectively. Tinker has a success rate of 62.2% and is ranked #733 out of 3577 analysts, while Williams has a success rate of 60.0% and is ranked #615.
In total, 2 research analysts have rated the stock with a Sell rating, 7 research analysts have assigned a Hold rating and 13 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $17.43 which is 21.1% above where the stock opened today.
Pandora Media Inc provides internet radio services on smartphones, tablets, traditional computers and car audio systems, as well as other internet-connected devices.