Pandora Q1: Programmatic Begins A Meaningful Contribution To Revenue

Pandora q1 earningsPandora’s Q1 2016 call on Thursday revealed that programmatic sales of display inventory drove increased sell-through rates.

In an earnings release, Pandora claimed the buying method is “starting to contribute meaningfully” to advertising revenue per 1,000 ad-supported listener hours, which grew 19% year over year to $45.47, and take pressure off ad loads. Pandora made no mention of in-stream programmatic audio ads and did not mention an exact figure for programmatic revenue.

Despite eliminating remnant inventory, Tim Westergren, Pandora’s CEO and co-founder, said the company still has a lot of inventory it can sell programmatically.

“Eliminating [low-quality inventory] allows the range to tighten and the overall CPMs of mobile display to increase significantly,” he said. “Keeping that pricing up is a significant advantage both from an advertising quality perspective and a revenue perspective.”

As a whole, advertising revenue grew 23% YoY to $220 million. Ad revenue exceeded expectations due to stronger demand in local markets, which saw advertising revenue growth of 42% YoY and generated $61.3 million.

Total listener hours grew 4% YoY to 5.52 billion, compared to 5.30 billion in Q1 2015. They were also up from last quarter’s 5.37 billion. Active listener hours were up marginally YoY, from 79.2 million to 79.4 million. This was down from the previous quarter, which showed a figure of 88.1 million.

Pandora’s earnings did not break out mobile and desktop figures this quarter since the company now considers mobile its core business. Mobile traffic represents 85% of Pandora’s inventory.

“As we enter 2016 we are committed as a predominantly mobile platform,” Mike Herring, Pandora’s EVP and CFO, said Thursday on the call. “We’re focusing on overall performance metrics rather than platform-specific.”

The company’s total revenue grew 29% YoY to $297.3 million.

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