The Internet music giant posts net income of $638,000 on $75 million in revenue for the third quarter
Good news for Pandora: Contrary to expectations, the Internet music giant turned a notable profit in the third quarter, the company announced Tuesday afternoon.
Pandora posted net income of $638,000 on $75 million in revenue for the third quarter, breaking even on a per-share basis. Advertising revenue grew 102 percent, to $66 million, compared with the same quarter last year. The company derives 88 percent of its revenue from advertising, according to the Los Angeles Times.
A poll of analysts by Thomson Reuters predicted that Pandora would lose a penny a share, totaling $71 million in revenue, according to multiple reports.
"Our growing scale and powerful, multi-product advertising platform is enabling Pandora to increasingly penetrate areas that were once solely served by terrestrial radio," Pandora Chairman/President/CEO Joe Kennedy said. "Our momentum in transforming the radio industry is stronger than ever."
However, Pandora representatives reportedly told investors not to expect profits in the fourth quarter.
In 2010, Pandora posted a net loss of $1.8 million on sales of $37.7 million in the same quarter. The third quarter 2011 rise was due to increased sales and user growth. Total listener hours of 2.1 billion increased 104 percent compared with the same quarter last year, while its 66 percent share of U.S. Internet radio usage was a 53 percent growth.
The earnings report was the streaming service's second since it went public in June. The third quarter ended Oct. 31.
Pandora now has 40 million active users, which is a year-over-year increase of 65 percent. The streaming service has more than 80 million users and more than 800,000 tracks in its library.
In early February it was announced that former News Corp. President and COO Peter Chernin and former Netflix CFO Barry McCarthy were joining Pandora's board.