Pandora's latest earnings report didn't strike quite the right note with investors.
The Internet radio service posted earnings of $0.04 a share on revenue of $218.9 million in the June quarter, beating Wall Street estimates on both counts. However, the company projected that earnings in the upcoming quarter would be between $0.05 and $0.08, coming in below many analyst estimates.
The stock dipped by as much as 13% in after hours trading following the earnings report.
As Rich Greenfield, an analyst at BTIG, pointed out on Twitter, growth in the number of active Pandora listeners appears to be slowing. There were 76.4 million active users in the June quarter, up just more than 1% from the previous quarter and 7.5% from the same quarter a year earlier.
Pandora $P usage stagnating – ended 2013 with 76 mm listeners and 1.6 mm listening hours in Dec – essentially unchanged in June '14— Rich Greenfield (@RichBTIG) July 24, 2014
Some have questioned how growing competition from music services like Spotify, Google Play Music and Beats, the latter of which recently entered into an agreement to be acquired by Apple, would impact Pandora's user base.
On a positive note, Pandora's total listener hours increased nearly 30% in the quarter compared to the previous year and topped 5 billion for the first time.