(Reuters) – Online streaming music service Pandora Media Inc reported a rise in total revenue on strong advertising sales, beating expectations.
The company said on Tuesday that third quarter revenue rose 99 percent to $75 million, beating analysts' expectations of $71.4 million, according to Thomson Reuters I/B/E/S.
However content acquisition costs more than doubled to $37.6 million during the third quarter.
Shares of the company fell 3.8 percent in after hours trading.
Advertising revenue, which represents the majority of total revenue, advanced 102 percent to $66 million during the same period.
Pandora, first known as TheSavageBeast, has been around for a decade. It runs a mostly free service that recommends different songs based on listener's playlists.
One major concern for the company, which went public in June, is the more users it attracts, the more it must pay record labels in licensing fees.
Pandora has about 40 million active users and its share of U.S. Internet radio is 66 percent, up from 2.1 percent during the same quarter last year.
Adjusted earnings per share was 2 cents compared with a penny per share during the same period a year ago.
(Reporting by Jennifer Saba; editing by Carol Bishopric)
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