Internet radio company Pandora Media (P) late Thursday met Q3 earnings estimates but gave a weak outlook. Meanwhile, key rival Spotify raised $250 million in a new funding round.
Pandora earned 6 cents a share in Q3, excluding various items, up 20% vs. a year earlier.
Revenue grew 50% to $180.4 million, topping consensus views of $174.8 million.
It expects EPS of 2-4 cents in the November-January period. Wall Street had modeled 4 cents.
Pandora shares fell nearly 2% late after rising more than 4% to 29.68 during the regular session. The stock hit a record 31.94 on Nov. 15.
Mobile Moves At Slower Pace
Mobile ad sales were $104.9 million in Q3, or 58% of all revenue.
Those ads are increasingly important for Pandora as users migrate to smartphones, where competition from Apple (AAPL), Google (GOOG) and others lurks.
But mobile revenue growth slowed to 58%. Pandora's non-GAAP mobile sales growth was 92% in Q2 and 97% in Q1.
Ad sales per mobile user rose about 41% vs. a year earlier to $36.
But ad sales per desktop user fell about 1% to $57.54, the first such drop in at least two years. Pandora doesn't see that as a neg ative, CEO Brian McAndrews told analysts on a conference call.
The company expects to phase out reporting ad sales on Web and mobile and instead report user revenue across devices, he said.
"We're starting to spread the revenue across our entire network," said McAndrews, who joined Pandora in September. "We look at that as a sign of health in our entire business.
Product development and sales and marketing about doubled in the quarter. Content acquisition costs grew 30% to $87 million.
No Big Apple Bite Yet
Still, the threat from Apple's iTunes Radio seemingly is only static at this point, some analysts say.
That service launched on Sept. 18 and quickly gained some 20 million users, according to Apple.
But only about 6.6% of Pandora listener hours had shifted to iTunes Radio by the start of November, according to a listener poll by Cowen & Co.
"While outright 'switchers' are lower than previously expected, of the 15% of Pandora users in our survey who tried (iTunes Radio) about 60% indicated iTunes Radio will have some impact on their listening habits," wrote Cowen analyst John Blackledge.
Spotify raised about $250 million, with Silicon Valley-based Technology Crossover Ventures leading the latest funding. That gives the Swedish startup a valuation of more than $4 billion.
Pandora logged about 8.06% of all time spent listening to the radio in the U.S. in October, up from 7.77% the month prior and 6.55% in the year-earlier period.