By Julia Love
(Reuters) - Music streaming service Pandora Media Inc gave a full-year revenue forecast above expectations, helped by rising advertising sales, sending its shares up 11 percent late on Thursday.
The strong quarterly performance comes at a pivotal time for Pandora, whose stock has fallen sharply year amid concerns about stiffening competition in music streaming from rivals such as Apple (NASDAQ:AAPL) Inc's Apple Music and Spotify. The company recently named a new chief executive, co-founder Tim Westergren, hoping to build goodwill in the music industry as it negotiates for licenses to launch an on-demand product.
Mike Herring, Pandora's president and CFO, said he is enthusiastic about the early progress the company has made under Westergren.
"We have the team in place, we have the enthusiastic spiritual leader at the helm in Tim and everything is full speed ahead," he said in an interview.
First-quarter revenue rose to $297.3 million from $230.8 million. Pandora shares rose as much as 11 percent in after-hours trading, compared with their close of $9.44.
The company raised its full-year revenue guidance to between $1.41 billion and $1.43 billion, up from $1.40 billion to $1.42 billion. Analysts had been expecting full-year revenue of $1.41 billion on average, according to Thomson Reuters I/B/E/S. The company said the number of active listeners in the first quarter was 79.4 million, up slightly from the same quarter last year, with total listener hours of 5.52 billion. Analysts on average had expected 79.9 million active listeners and 5.41 billion listener hours, according to market research firm FactSet StreetAccount. Advertising revenue, which accounts for 74 percent of total revenue, rose about 23 percent in the first quarter ended March 31.
Herring attributed the gains to the company's focus on local advertising and the robust market for mobile advertising.
"It speaks to the broader strengths of the mobile advertising market and how it continues to grow," he said. Pandora forecast current-quarter revenue of between $345 million and $355 million.
The company lost 20 cents per share on a non-GAAP basis, wider than the loss of 12 cents per share in the same quarter last year, which Herring attributed to the rising cost of music royalties.
Analysts on average had expected a loss of 31 cents per share on revenue of $286.49 million, according to Thomson Reuters I/B/E/S.