(Reuters) – Music streaming service Pandora posted a 29% rise in quarterly revenue on Thursday, buoyed by rising advertising sales.
First-quarter revenue rose to $297.3 million from $230.8 million, and the company’s shares (P) rose 11% in after-hours trading.
The strong quarterly performance comes at a pivotal time for Pandora, whose stock has fallen sharply this year amid concerns about stiffening competition in music streaming from rivals such as Apple’s Apple Music and Spotify. The company recently named a new chief executive, co-founder Tim Westergren, hoping to build goodwill in the music industry as it negotiates for licenses to launch an on-demand product.
Mike Herring, Pandora’s president and CFO, said he is enthusiastic about the early progress the company has made under Westergren.
“We have the team in place, we have the enthusiastic spiritual leader at the helm in Tim and everything is full speed ahead,” he said in an interview.
The company said the number of active listeners in the first quarter was 79.4 million, up slightly from the same quarter last year, with total listener hours of 5.52 billion. Analysts on average had expected 79.9 million active listeners and 5.41 billion listener hours, according to market research firm FactSet StreetAccount.
For more about Pandora, watch:
Advertising revenue, which accounts for 74% of total revenue, rose about 23% in the first quarter ended March 31.
Herring attributed the gains to the company’s focus on local advertising and the robust market for mobile advertising.
“It speaks to the broader strengths of the mobile advertising market and how it continues to grow,” he said.
Pandora forecast current-quarter revenue of between $345 million and $355 million.
The company said it lost 23 cents per share, which Herring attributed to increased royalty costs.