Pandora’s earnings report for the second quarter has revealed that the number of people who use the music streaming platform on smart speakers has increased by 282% from a year ago. This development has come at a time when voice-activated devices from Google and Amazon have increased in popularity.
The online music streaming platform now intends to capitalize on the boost it is receiving from smart speakers by deepening the existing relationships it has with its partners such as Sonus, Google and Amazon. Pandora will also seek to add new partnerships in order to expand its suite of connected devices which now number more than 2,000. Besides Amazon and Google who are already established players in the smart speaker space, Apple is also expected to launch the HomePod voice-activated device later in the year.
Second quarter results
In the second quarter results Pandora managed to beat the expectations of Wall Street though the music-streaming platform issued a sales guidance that was lower than the estimates. Active users of the platform also fell by 2.7% compared to a similar period a year ago and the number now stands at 76 million.
On a per-share basis Pandora registered a loss of $0.21 while revenues reached a figure of $376.8 million. Analysts had been expecting revenues to come in at $368 million and a per-share loss of $0.24. In the third quarter Pandora expects that revenues will come in at between $385 million and $370 million against the $407 million that analysts had been expecting.
Slower user decline
The interim chief executive officer of Pandora, Naveen Chopra, made the observation that the user decline rate in the second quarter was slower than what was recorded in the first quarter of this fiscal year. And in the course of the quarter, the level of user engagement rose as well as growth in Pandora’s advertising business.
“This quarter’s results are a great example of our ability to generate more value from our ad-supported audience even while listenership levels may not be growing. Going forward, we expect the trends in our advertising business to continually improve,” Chopra said in an earnings call with analysts and investors.
Pandora’s acting CEO is currently trying to turn around the online music streaming platform following the resignation of Tim Westergren as the chief executive officer two months ago. The platform also recently accepted an investment worth $480 million from Sirius XM.