http://www.morningstar.com/earnings/52957650-pandora-media-inc-p-q1-2014.aspx

Pandora Media Inc P
Q1 2014 Earnings Call Transcript

Transcript Call Date 05/23/2013

Operator: Welcome to Pandora's First Quarter Fiscal Year 2014 Financial Results Conference Call. There will be a question and answer session at the end of the conference. Opening today's call is Dominic Paschel, Vice President, Pandora.

Dominic Paschel - VP, Corporate Finance and IR: Good afternoon, and welcome to Pandora's first quarter fiscal year 2014 financial results call for the quarter ended April 30, 2013. Some of our discussions will contain forward-looking statements, which may include projected financial results or operating metrics, business strategies, anticipated future products or services, anticipated market demand or opportunities and other forward-looking topics. These statements are subject to risks, uncertainties and assumptions. Accordingly, actual results could differ materially. For a discussion of the risks that could cause our results to differ from today's discussion, please refer to the documents we've filed with the Securities and Exchange Commission.

Also, I would like to remind you that during the course of this conference call, we will discuss non-GAAP measures of our performance. Reconciliations to the direct comparables, GAAP financial measures are provided in the tables in the press release and Form 8-K filed earlier this afternoon with the SEC. For your convenience, supplemental information has been included in today's press release and detailed financials regarding RPM metrics and are available on the Investor Relations site.

Today's call is available via webcast and a replay for two weeks. Following the conclusion of the call to access the press release, supplemental financial information or the webcast replay, please consult the IR section of Pandora.com.

With that, let me turn the call over to Joe Kennedy, Pandora's Chairman and CEO.

Joe Kennedy - President and CEO: Thanks Dom. The first quarter was a busy quarter for Pandora as we continue to execute across the business to demonstrate and expand our mobile leadership with both listeners and advertisers.

During the quarter, we marked two notable milestones. In the U.S. alone, we've reached over 200 million registered users and also surpassed 2.5 million Pandora One subscribers. Not many companies have the privilege of operating at this scale, and I want to thank our listeners for helping us to achieve these milestones.

During the quarter, we added more than 700,000 net new subscribers to Pandora One, more than we added in all of fiscal year 2013. And our Pandora One's over 2.5 million subscribers, almost half have now been generated on mobile devices.

Total listener hours for the quarter grew 35% year-over-year, reaching a record high of 4.2 billion hours for the quarter, compared to 3.1 billion in the same quarter last year. Active users also reached a record high in April, increasing 35% to 70.1 million from 51.9 million in April 2012.

We recently exceeded 30 billion thumbs in important user engagement metric which further fuels the big data intellectual property component of our best-in-the-world personalized radio technology.

We introduced the 40-hour listening limit for mobile users in March, much like we did on the desktop nearly four years ago. That limit has worked as we intended. We saw an increase in total active listeners and a deceleration in total hour stream, enabling us to manage our content acquisition cost with minimal impact on listenership or revenue growth.

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