Peter Kafka

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Pandora CEO Defends Company After Earnings Miss

Pandora is getting roughed up by Wall Street after turning in an earnings report card that missed on revenue, earnings and guidance estimates.

No problem, says CEO Joe Kennedy, who is happy to describe a glass more than half full in an interview before the company’s earnings call this afternoon.

He wants investors to pay attention to the company’s increasing share of the radio listening market, which he estimates has doubled, to 5.5 percent in the last year.

And he says they should also be impressed with his mobile ad revenues, which hit $33 million last quarter and totalled $100 million for the fiscal year. That’s up from $25 million over the previous year.

Mobile is particularly important for Pandora, since it was the iPhone, along with Android handsets, that really spiked its growth in advance of its IPO last year. But Wall Street has worried that Kennedy wouldn’t be able to take advantage of that growth.

Kennedy argues that Pandora made more money on mobile ads than any other Web company besides Google last year. (Anyone want to help fact-check that?)

OK. So what about the misses? Kennedy notes that Pandora still delivered revenue within its guidance range, though that’s not the kind of argument that Wall Street generally goes for. More practically, he says that holiday ad spending was a “touch lighter than we expected.”

On top of that, the pricing that Pandora got for its unsold ad inventory, which it hands off to third-party ad networks, was also lower than expected in January.

Kennedy made the same arguments during his earnings call, but that hasn’t convinced traders, who have pushed Pandora shares down 20 percent since the market closed.

 


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