Music streaming service Pandora still makes most of its money with ad-supported streaming, but its paid subscription business is growing quickly: The company generated close to 30 percent of its Q3 revenue with paid subscriptions, it revealed as part of its most recent earnings report Monday.
Altogether, Pandora brought in some $417.6 million in revenue for the quarter, with non-adjusted net losses coming in at $15.5 million, or $0.06 per share. Last year around, the company ended the same quarter with revenues of $378.64, and losses of $0.06 as well. Wall Street watchers had expected revenue of $401.29 million, and losses of $0.11 per share.
But he bigger story for Pandora may be the significant growth of its subscription business. The company’s paid products are still dwarfed by competitors like Spotify and Apple Music, with Pandora servicing just 6.8 million paying subscribers. However, the company significantly grew its subscription revenue, to the tune of 49 percent year-over-year, totaling $125.77 million for the quarter.
Pandora’s ad business on the other hand grew just 6 percent year-over-year. The company touted new all-time ad rate records in its earnings release Monday, but the total ad revenue is significantly impacted by the fact that users continue to abandon the service for the competition. The company ended the quarter with 68.8 million monthly active listeners, about 5 million fewer than a year ago.
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All of this happens as Pandora gears up to be acquired by Sirius XM. The two companies announced the acquisition in September, and the deal is expected to close in Q1 of 2018.
“I couldn’t be more excited about Pandora joining forces with SiriusXM,” said Pandora CEO Roger Lynch in a statement Monday. “A combined Pandora-SiriusXM will create the world’s largest audio entertainment company, bringing Pandora additional resources to accelerate growth and building on SiriusXM’s leadership in the car, subscription expertise, and unique content.”
The company decided not to hold an earnings call because of the pending deal.