On Thursday, Pandora missed revenue expectations on Wall Street for its third quarter and its forecast for its ongoing quarter, as the music streaming online service provider continues to struggle to bring in more advertisers to its platform.
The company, which is competing with AppleMusic, Google Play Music as well as Spotify amongst others, saw its shares plunge as much as 11% in trading afterhours.
Pandora forecasted revenue for the ongoing quarter from $365 million to $380 million, which was below estimates on Wall Street of $413 million.
CEO of Pandora Roger Lynch said that one theme that is consistent he has heard spoken by advertisers is Pandora does not have the features they require to easily transact with the company and drive their different campaigns.
This, added Lynch, is beginning to create a material impact on the company’s revenue.
Pandora said that revenue from advertising increased by close to 1% during the quarter to just over $275.6 million. It took a big hit from the shutdown of its operations in Australia as well as New Zealand.
Advertisement revenue represented approximately 73% of Pandora’s total revenue, but missed analysts’ estimates of just over $289.2 million.
SiriusXM invested more than $480 million in Pandora and has a stake of 15.9% in a business that has yet to post a profit for a full year.
CFO at Pandora Naveen Chopra announced that the company expected that the market conditions in CPG, auto accounts and retails to continue being challenging, which will result in heavy pressure on its revenues from advertising.
However, Pandora said it added more paying subscribers to its music streaming services, rising by 7% to over 5.19 million. That figure beat estimates by analysts of 5.03 million subscribers.
The total listener hours at Pandora dropped during the third quarter to just over 5.15 billion compared to 5.4 billion one year ago.
Total revenue at Pandora was up by 7.6% ending at $378.5 million for the quarter that ended September 30.
The net loss at Pandora attributable to stockholders widened to $84.5 million equal to 34 cents a share for the quarter, compared to $61.5 million equal to 27 cents a share for the same period one year earlier.
Excluding certain items, Pandora posted 6 cents a share loss. Analysts were expecting the company’s loss to reach 8 cents a share and revenue to end at $380.5 million.