Pandora user base fell by 6.5m in Q2 – but parent SiriusXM posts record $2bn in quarterly revenues

Pandora’s user base is declining at a steep rate, despite the platform’s $3.5bn-valued buyout by SiriusXM in February.

According to Sirius’s latest quarterly results, for calendar Q2, Pandora’s Monthly Active Users (MAUs) in the period stood at 64.9m – down 6.5m on the 71.4m users the platform had in the prior-year quarter.

A direct comparison to Spotify is arguably unfair here, as SPOT is a global service while Pandora is, today, restricted to the US. But the fact remains: with its 217m MAUs at the close of Q1, Spotify’s user base was over three times the size of Pandora’s.

Could Spotify catch Pandora in the latter’s home market? It’s possible. Spotify’s Q1 results showed that 29% of the company’s MAUs were based in North America (the US plus Canada) – which equated to 63m users. We will find out tomorrow (July 31) how Spotify grew its user base in Q2.

As for Pandora, from its quarterly peak of 81.5m users in Q4 2014, the platform has shed 16.6m MAUs – a slide of 20.4%.

Sirius’s Q2 results also showed that Pandora’s total ad-supported listener hours were 3.49bn in the quarter, down from 3.86bn in the second quarter of 2018.



All that being so, Pandora is making more out of less.

Ad revenue at the company reached a Q2 record of $306m, growing 13% over the second quarter of 2018. This was driven by audio and video programmatic advertising, in addition to engagement-based video as well as the expansion of off-platform efforts and fees generated on the AdsWizz platform.

Total revenue for Pandora grew 15% to $441m in Q2, aided in part by an 18% YoY increase in subscriber revenue to $135m.

Indeed, total Pandora subscribers were 7.0 million at the end of the period, an increase of 16% over the second quarter of 2018. Over 6.2m of these subscribers were ‘self-paying’, but just 64,000 new self-pay subs were added in the quarter.

Of note: Pandora’s reported gross profit reached $157m in Q2, up 40% over the second quarter 2018. This produced a gross margin in the quarter of 36%, up by 7% on the 29% gross margin posted in the prior year period.

How did Pandora improve its profitability margin in the latest quarter? Over to SiriusXM: “This expansion was driven primarily by lower revenue share and royalties and customer service and billing expenses as a percentage of revenue.”

Hmmm: “lower revenue share and royalties” – hardly music to the ears of record companies and publishers.

According to its balance sheet, Pandora spent $246m on ‘programming and content’ in Q2 – slightly up on the $236m it spent in the prior year quarter, but down as a percentage of revenue.


None of Pandora’s performance – the good and the not so good – will be troubling SiriusXM too much today.

SiriusXM’s satellite and digital radio business posted record revenues of $1.54bn in Q2, taking its midyear revenues over the $3bn mark.

And when combined with Pandora, SiriusXM’s total consolidated revenue in Q2 was $1.98bn, up $160m year-on-year.

Total consolidated revenue (Pandora + SiriusXM) in the first six months of 2019 hit a whopping $3.84bn – very close to the revenues generated in the same period at the music industry’s biggest rightsholder, Universal Music Group ($3.68bn).



SiriusXM’s net profit totaled $263 million in the second quarter, compared to $293m in the prior year period. Its net income in H1 2019 was $446m.

SiriusXM (the radio platform) added 290,000 net new self-pay subscribers in the second quarter to end with more than 29.3 million self-pay subscribers.

Total net subscriber additions in the second quarter were 174,000, resulting in more than 34.3 million total SiriusXM subscribers at the end of the period.

Paid promotional subscribers decreased due to declines in shipments from automakers offering paid promotional subscriptions.

“Our company produced outstanding financial and operating results once again this quarter, and I’m pleased by the quick progress we’ve made in integrating Pandora.”

“Our company produced outstanding financial and operating results once again this quarter, and I’m pleased by the quick progress we’ve made in integrating Pandora. Revenues and adjusted EBITDA each reached records in the period. We’re thrilled with the results in the first half of the year, and we are raising 2019 guidance for revenue and adjusted EBITDA and reiterating our guidance for net subscriber additions and free cash flow,” said Jim Meyer, Chief Executive Officer, SiriusXM.

“We continue to offer outstanding new programming across comedy, sports, talk and music, with some of the best brands in all of media. Lady Gaga played a once-in-a-lifetime show for SiriusXM subscribers and Pandora listeners in late June at Harlem’s Apollo Theater, marking the first-ever combined SiriusXM and Pandora event.

“We debuted “Netflix Is A Joke Radio,” a full-time comedy channel with Netflix, and announced plans for a new music channel with SoulCycle. We launched a new jam band channel with Phish, and special pop-up channels with Madonna, Cher, Dave Matthews Band and the music of Pavarotti. And, last week, we were thrilled to announce a groundbreaking and unprecedented collaboration with platinum-selling recording artist Drake — our content is a true competitive advantage,” added Meyer.Music Business Worldwide

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