Pandora lost 2.75 million monthly users in a year, yet its parent company, SiriusXM, managed to grow its profit. The streaming app closed the third quarter with 38.81 million active users, a 6.6% drop from 41.56 million.
Paid accounts took a hit as well. Pandora Premium and Pandora Plus had 5.51 million self-pay customers left, down by 177,000. Free users also spent less time on the app, with ad-funded streams logging 2.25 billion hours, a 10% fall.
Meanwhile, SiriusXM brought in $2.153 billion across its business, just shy of the prior $2.159 billion. The firm linked much of that gap to a 16% drop in radio equipment sales, as higher memory chip costs hurt the hardware side.
Profit told a different story. Net earnings rose 7% to $317 million, while royalty and revenue-sharing bills climbed by $5 million to $726 million. Those costs ate up 33.7% of total sales, against 33.4% before.
The core SiriusXM service paid $392 million of those fees, up 2%. Pandora and Off-platform paid $334 million, a 1% dip. That second unit also handles podcast ads, third-party audio sales, and AdsWizz.
Oddly enough, the ad business held up despite Pandora's weaker reach. Segment sales hit $549 million versus $548 million, with ad income up 1% to $419 million. Podcast deals, automated ad sales, and tech fees helped make up for weaker music ads.
Subscriptions brought in $130 million for the unit, down 2%. Fewer people paying for Pandora played a big part in that slide.
On the satellite side, the trend was a bit better. SiriusXM gained about 5,000 paying users after losing 40,000 in the prior-year quarter. It had 32.85 million accounts in total, with 31.26 million paying directly.
Average monthly spend barely moved, at $15.18 per user versus $15.19. CEO Jennifer Witz pointed to more stable user counts, stronger use of the service, and fresh ad space from a YouTube Audio deal.
SiriusXM also lifted its yearly targets again. Revenue, adjusted EBITDA, and free cash flow forecasts each got a $25 million bump, with annual sales pegged at roughly $8.55 billion.
CFO Zac Coughlin sees room for more share buybacks as the firm cuts costs and spends less on satellites.
But legal trouble is still in the mix. The Mechanical Licensing Collective claims Pandora owes more royalties for its free tier and Pandora Plus. At the heart of the case is whether those services fall under rules that demand higher payments.
Judge Eli J. Richardson declined to rule for either side without a trial. The MLC wants a fresh look at that choice, while Pandora backs a fair review of both sides' claims. No new trial slot has been set.
Another case pits SiriusXM against BMI over music license rates. BMI chief Mike O'Neill has accused the firm of paying music creators less than they deserve. An interim deal remains active while the court case moves ahead.
And Pandora has raised its fees. Premium costs $11.99 per month instead of $10.99, while Plus went from $4.99 to $5.99. Family plans jumped from $17.99 to $19.99.
The price hike may help fill the gap left by lost subscribers. SiriusXM expects higher fees to lift Pandora segment subscription sales despite fewer average paying accounts.
For context, Pandora had 46 million active users at the close of 2023. That puts its total drop at roughly 7.2 million, a clear sign that the platform is still losing ground.
Paid accounts took a hit as well. Pandora Premium and Pandora Plus had 5.51 million self-pay customers left, down by 177,000. Free users also spent less time on the app, with ad-funded streams logging 2.25 billion hours, a 10% fall.
Meanwhile, SiriusXM brought in $2.153 billion across its business, just shy of the prior $2.159 billion. The firm linked much of that gap to a 16% drop in radio equipment sales, as higher memory chip costs hurt the hardware side.
Profit told a different story. Net earnings rose 7% to $317 million, while royalty and revenue-sharing bills climbed by $5 million to $726 million. Those costs ate up 33.7% of total sales, against 33.4% before.
The core SiriusXM service paid $392 million of those fees, up 2%. Pandora and Off-platform paid $334 million, a 1% dip. That second unit also handles podcast ads, third-party audio sales, and AdsWizz.
Oddly enough, the ad business held up despite Pandora's weaker reach. Segment sales hit $549 million versus $548 million, with ad income up 1% to $419 million. Podcast deals, automated ad sales, and tech fees helped make up for weaker music ads.
Subscriptions brought in $130 million for the unit, down 2%. Fewer people paying for Pandora played a big part in that slide.
On the satellite side, the trend was a bit better. SiriusXM gained about 5,000 paying users after losing 40,000 in the prior-year quarter. It had 32.85 million accounts in total, with 31.26 million paying directly.
Average monthly spend barely moved, at $15.18 per user versus $15.19. CEO Jennifer Witz pointed to more stable user counts, stronger use of the service, and fresh ad space from a YouTube Audio deal.
SiriusXM also lifted its yearly targets again. Revenue, adjusted EBITDA, and free cash flow forecasts each got a $25 million bump, with annual sales pegged at roughly $8.55 billion.
CFO Zac Coughlin sees room for more share buybacks as the firm cuts costs and spends less on satellites.
But legal trouble is still in the mix. The Mechanical Licensing Collective claims Pandora owes more royalties for its free tier and Pandora Plus. At the heart of the case is whether those services fall under rules that demand higher payments.
Judge Eli J. Richardson declined to rule for either side without a trial. The MLC wants a fresh look at that choice, while Pandora backs a fair review of both sides' claims. No new trial slot has been set.
Another case pits SiriusXM against BMI over music license rates. BMI chief Mike O'Neill has accused the firm of paying music creators less than they deserve. An interim deal remains active while the court case moves ahead.
And Pandora has raised its fees. Premium costs $11.99 per month instead of $10.99, while Plus went from $4.99 to $5.99. Family plans jumped from $17.99 to $19.99.
The price hike may help fill the gap left by lost subscribers. SiriusXM expects higher fees to lift Pandora segment subscription sales despite fewer average paying accounts.
For context, Pandora had 46 million active users at the close of 2023. That puts its total drop at roughly 7.2 million, a clear sign that the platform is still losing ground.
