Even as Pandora Media reports soaring first-quarter revenue, the streaming radio service said losses more than doubled in the period. Pandora, gearing up for an IPO next month, incurred losses of $6.8 million on a 131 percent increase in revenue of $51 million.
In a new SEC filing Pandora, which has an accumulated deficit of $92.1 million as of April 30, said it expects to continue to post operating losses on an annual basis through “at least” fiscal 2012.
The company said a key element of its growth strategy is to increase the number of its listeners and listening hours to gain market share. Pandora had 94 million registered users at the end of March, after adding 41 million in the last calendar year. (Around 34 million of those listeners are now considered active, up from 18 million at the end of the year-earlier period.) In the first quarter, Pandora listeners spent 1.6 billion hours playing music, an average of 15.7 hours an active user.
But as that number of listener hours increases, so do royalty costs associated with the acquisition of music content. Pandora is currently spending 58 percent of its revenue on royalty payments. For the fiscal year ended Jan. 31, Pandora brought in revenue of $137.8 million, of which 86.6 percent, or $119.3 million was derived from advertising, according to the SEC filing.
