Pandora loses users but increases profits due to an additional 251,000 subscribers for its Pandora Plus and Pandora Premium service plus a 12% increase in advertising revenue. SiriusXM, Pandora’s parent company, posted its 2019 annual results which showed a decline in Monthly Active Users from 69.4 million in 2018 to 63.5 million in 2019. This was offset by record advertising revenues of $1.2 Bn – a 10% increase over 2018. Total revenue for Pandora grew 10% to $1.7 Bn for the year aided in part by a 10% increase in subscriber revenue to $527 million.
Total ad supported listener hours were 13.4 Bn in 2019, down from 14.8 Bn in 2018. Pandora added 251,000 paid subscribers to its Pandora Plus and Pandora Premium service in 2019 to end the year with nearly 6.2 million paid subscribers. Promotional subscribers declined to 49,000 from 756,000 in 2018 as a result of a reduction in promotional subscriptions due to the expiration of an agreement with T-Mobile in the third quarter of 2019. This brought total Pandora subscribers at year-end to 6.2 million.
Total cost of services at Pandora in 2019 of $1.1 Bn increased 2% compared with 2018. This resulted in gross profit at Pandora of $624 million, up 28% over 2018, and produced a gross margin for the year of 36% up from 31% in the prior year. This expansion was driven primarily by lower revenue share and royalties and customer service and billing expenses as a percentage of revenue.
Since becoming part of SiriusXM, the trend has been for falling listener numbers but improving revenues and lower costs at Pandora. Recent performance trends at Pandora have shown increases in listeners and in the last quarter of 2019 the streamer added 400,000 net monthly active users.
