Internet radio pioneer Pandora Media (P) continues to make big strides in popularizing streaming audio. Revenue in its latest quarter skyrocketed 51% to $101.3 million. After backing out stock-based compensation expenses, Pandora posted breakeven results. Wall Street was expecting a small loss on just $100.9 million in revenue.
There are now 54.9 million active users of the music discovery service, and Pandora is serving up more than a billion hours of streaming music and comedy a month.
Mobile Is Rolling
A big concern for many online companies is how they will succeed in monetizing mobile usage. More people are relying on their smartphones and tablets for their basic computing needs, and the transition to smaller screens poses a challenge to some website operators.
Mobile is even more important for Pandora. As more cars let smartphone owners fire up their Pandora apps through their dashboard speakers, drivers are turning to the streaming service on the open road. Commuters are also popping in their earbuds and listening to Pandora on the go.
Thankfully, Pandora's doing well on the mobile front. Total revenue during the company's latest quarter soared 86% to $59.2 million. Mobile is now generating more than 58% of Pandora's revenue.
Battle of the Bands
Pandora isn't alone. Terrestrial and satellite radio heavyweights are hopping on the music discovery bandwagon.
Clear Channel (CCMO) -- the owner of hundreds of traditional FM and AM stations -- is doing well with its iHeartRadio app that allows listeners to stream its channels from anywhere they can secure an online connection. A major component of iHeartRadio's relaunch late last year was a Pandora-like streaming service.
Sirius XM Radio (SIRI) has grown its satellite radio monopoly to nearly 23 million subscribers, but it wants to be taken seriously in the booming streaming market. It plans to roll out a music discovery platform of its own later this year.
The actions of media giants validate Pandora's model, but the success of the company itself is probably the biggest endorsement for Internet radio.
Pandora's outlook calls for another profitable quarter on a healthy sequential boost in revenue. Critics who argued that a streaming service relying primarily on ad revenue wouldn't be able to turn a profit have gotten it wrong.
Pandora is growing, and it's doing so without resorting to red ink as it streams blues.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Facebook. Motley Fool newsletter services have recommended buying shares of Facebook.