Pandora got a lift from rising mobile revenue as its revenue more than doubled in the fiscal year ended January 31st. Revenue increased 56% to $427.1 million while mobile revenue rose 105% to $255.9 million. Net loss deepened to $38.1 million from $16.1 million a year earlier. Content costs rose to 60.6% of revenue from 54.2% a year earlier.
The market shook off the net loss, however. Shares of Pandora were up nearly 20% in after-hours trading. Pandora expects revenue for the next fiscal year to fall between $600 million and $620 million, which would represent roughly a 41% to 45% increase over the just-complete fiscal year. It may achieve profitability next year. Non-GAAP net loss or earnings per share is expected to fall between -$0.05 and $0.05. It expects revenue in the next quarter to range from $120 million to $125 million.
The Pandora story is one of growth, not profit and loss (at least for the time being). There was much more growth aside from revenue. The popular Internet radio service is getting "more listening per active user per day than ever before," said CEO Joe Kennedy during Thursday's earnings call.
Kennedy announced via press release just before the earnings call that he will be leaving the company.
Pandora closed the year with record 8% share of total US radio listening, up from 5.6% a year earlier. With the addition of many local salespeople taken from broadcast radio competitors, Pandora grew to 740 employees at the end of the fiscal year from 530 a year earlier.
Separately, the company released February listener statistics that showed a slight drop because February 2013, which had 28 days, was being compared to February 2012, which had 29. Total listener hours in February were 1.38 billion, down slightly from 1.39 billion in January and up 42% from the prior-year period. However, monthly active listeners, which had fallen in January, rose in February to 67.7 million from 65.6 million in January.
But royalties continued to haunt Pandora's income statement. Content costs represented 60.6% of revenue in the fiscal year ended January 31 compared to 54.2% of revenue a year earlier. Pandora has quick to point out mobile revenue outpaced listener growth 105% to 89% in the fiscal year. Just last week the company implemented a 40-hours-per-month cap on mobile listening in order to reign in its royalty costs relative to its advertising revenue. Since Pandora gets better advertising rates for its desktop listening -- although that is improving -- it is attempting to shift listeners from mobile to desktop or get them to pay once they reach the 40-hour limit.