Shares of Pandora Media, Inc. (NYSE/P) jumped more than 13% on Friday, July 24th, after the company’s earnings showed a surprising increase in listeners and ad revenue during the previous quarter.
The leading Internet radio service recorded total revenue of $285.6 million, a 30% year-over-year increase. Pandora’s total advertising also grew 30% year-over-year, with its local advertising business increasing 67%. (Source: Pandora, July 24, 2015.)
Despite increased competition from Apple’s new streaming music service, it reported subscription and other revenue was $54.6 million, a 31% year-over-year increase.
“Our advertising investments, particularly in local, are paying off. This quarter, local ad revenue reached an all-time high, driving record RPMs,” stated Brian McAndrews, Chairman and CEO of Pandora.
“Our monetization success allows us to be an even more effective platform for helping artists grow their careers,” he continued. “In addition to our ability to provide insights to the entire music industry, we fuel promotion that is extremely valuable to music makers.”
Pandora increased its full-year forecast, anticipating 2015 revenue of between $1.175 billion and $1.185 billion, compared to its previous estimate of between $1.16 billion and $1.18 billion.
Despite the positive outlook, the company is facing stiff competition from its traditional rivals Spotify and iTunes, as well as the latest entrants like Apple Music. Mind you, Pandora shares have slipped about 10% since Apple Music debuted last month. They are down more than 22% this year, reflecting that these companies are locked in very intense competition.