(Bloomberg) -- Pandora Media Inc. is re-emphasizing its roots as an internet radio company after months of turmoil and management turnover.
The Oakland, California-based web music pioneer on Monday outlined a new strategy for growth after reporting second-quarter sales that surpassed analysts' forecasts. The report was Pandora's first since the company sold a 19 percent stake to Sirius XM Holdings Inc. in June and dismissed CEO Tim Westergren.
New leadership plans to emphasize advertising-supported, free radio, a departure after a couple years of dabbling in new areas like ticket sales. With listeners shrinking slowly, Pandora is trying to extract more money from existing customers and spend less chasing new subscribers at home and abroad, interim Chief Executive Officer Naveen Chopra said.
“We need to develop as big an audience as possible across multiple forms of the service, both the ad supported and subscription,” Chopra said on a call with investors. “And the most efficient way to do that is to bring people into the ad-supported product and then use our on-platform capabilities to find the people for whom premium is really the right place to be.”
Pandora said Monday second-quarter sales grew to $376.8 million, up 9.9 percent from a year earlier, thanks to growth in advertising and subscriptions. Analysts had projected $367.4 million, the average of 25 estimates. The company's adjusted loss before interest taxes, depreciation and amortization widened to $54.3 million, mostly in line with projections.
The shares were little changed in extended trading after reaching as high as $9.65 before management disclosed its new strategy and forecast. Company executives project $370 million to $385 million in third-quarter sales and an adjusted loss of $5 million to $20 million. Sales will be hindered by lost revenue from the sale of Ticketfly, the ticketing business acquired in 2015, and Pandora's withdrawal from New Zealand and Australia.
Pandora will use savings from those endeavors to invest in a wider array of programming, like news and podcasts, and convert free users into paid ones. The music service has 76 million free users, and nearly 5 million paid subscribers, some 390,000 of which pay for a full on-demand music buffet.
To contact the reporter on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.net.
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Rob Golum
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