- Pandora insists the competitive landscape hasn't changed, noting it has an estimated 77.6% U.S. Web radio listening share among the top 20 properties (per Triton Digital), and argues seasonality hurt June figures.
Active listeners grew 7.5 percent to 76.4 million users in the second quarter, the Oakland, California-based company said in a statement yesterday. That was shy of the 76.6 million estimate of Corey Barrett, an analyst at Pacific Crest Securities, and a projection of 77 million by Mark Mahaney at RBC Capital Markets.
“Usage is stagnating, I think that’s the fundamental challenge, competition has been starting to take its toll,” Rich Greenfield, an analyst with BTIG LLC, said in a telephone interview. “That’s going to scare the market for what’s supposed to be a rapid growth Internet company.”
Larger companies are building services to compete with Pandora, such as Google Inc.’s purchase of Songza Media Inc. and Apple Inc.’s acquisition of Beats Electronics LLC. The number of Pandora listeners and the amount of time they spend using the service is little changed on a monthly basis from December to June, said Greenfield, who rates the stock a sell.
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| Brian McAndrews |
“We expected to see some seasonality in June, that’s typical,” Brian McAndrews, Pandora’s chief executive officer, said on a conference call with analysts. “We see pick up more in September and relative slowdown in the summer.”
Pandora expects to earn 5 cents to 8 cents a share on an adjusted basis in the third quarter, with sales of $235 million to $240 million. Analysts had seen 8 cents and $234 million.
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