Kennedy said the company's decision in February to cap free listening on mobile devices to 40 hours per month helped in two ways: It restrained growing royalty costs caused by its heaviest listeners, and it converted more of them into paying customers. The ad-free Pandora One subscription plan costs $4 a month or $36 a year.
"The mobile listening limit worked as intended, helping us control costs," he said. "We are also pleased with the advertising side as well."
Kennedy, who has led the company as chairman and CEO since July 2004, said in March that he would step down once a successor is found. He said Thursday that there was no timeline for the transition, and didn't expect to give an update until a successor was announced.
The company, which is based in Oakland, Calif., said it expected revenue of $155 million to $160 million in the second quarter, which ends in July. That's above the $150 million expected. It also forecast second-quarter adjusted earnings ranging from a loss of 2 cents per share to a gain of a penny per share. Analysts were looking for a penny gain.
On an annual basis, Pandora expects revenue of $615 million to $635 million, with the midpoint above the $618 million predicted by analysts. It forecast annual earnings ranging from a loss of 2 cents to a gain of 8 cents per share, with the midpoint also above the 2 cents per share profit that analysts had been forecasting.