Pandora Media posted record results for Q2


Pandora Media beat Wall Street expectations for its fiscal Q2 (May-July), with revenues up 117% to $67 million. Perhaps more importantly, operating cash flow turned positive, although it was still down from a year ago.

Advertising revenue more than doubled to $58.3 million from $26.7 million a year ago. Subscription and other revenue also more than doubled to $8.7 million from $4.1 million.

While cash flow had been negative in Q1, shortly before the company’s IPO, income from operations in Q2 was $1.4 million. That was down from $2.5 million a year earlier, but a return to positive territory for cash flow. For the first half of the fiscal year, though, negative cash flow was $3.7 million, compared to only $326K for the same six months a year ago.

Pandora’s Q2 revenues beat the high end of the $58-64 million range of expectations of analysts surveyed by Thomson First Call. Its net loss of four cents per share was a penny more than the consensus, but well within the wide range of estimates, $0.02-0.20.

In its first-ever guidance to Wall Street, Pandora said Q3 (August-October) revenues are expected to be up 84-92% in a range of $69.5-72.5 million. Earnings per share are expected to be from break-even to a loss of two cents.

RBR-TVBR observation: Much better than the Q1 results. Content acquisition, which is what Pandora calls its music royalties, were $33.7 million. That took more than 57% of the revenues coming in. Would you want to be in that business?