Pandora Media forecast current quarter adjusted profit below analysts’ estimates as it plans to plow money back into the business. The company’s shares fell about 10 percent in extended trading.
Pandora forecast adjusted profit of five to eight cents per share on revenue of $235 million to $240 million for the third quarter, ending in September.
Analysts on average were expecting eight cents per share in profit on revenue of $234.6 million, according to Thomson Reuters.
Pandora Chief Financial Officer Mike Herring said in an interview that the adjusted profit forecast was because the company plans to “reinvest aggressively.”
Pandora faces stiff competition from Spotify, Apple’s Beats online streaming service, Google and Amazon in the fast-growing music streaming business as downloads decline.
“There is no shortage of well-funded aggressive smart competitors in the space,” Herring said. “That said, there has been for years and we have continued to grow market share.”
Advertising revenue, where Pandora makes the bulk of its money, jumped 39 percent to $177.3 million in the second quarter, helped by strong mobile advertising revenue growth. Total revenue increased 43 percent to $218.9 million.
The company did raise its full-year revenue forecast to the range of $895 million to $915 million up from $880 million to $900 million. It increased its profit expectations as well to a range of 16 cents to 19 cents from a range of 14 cents and 18 cents.
Pandora spent 40 percent more to acquire content in the second quarter, ended June 30. The company is investing more to buy music licensing rights.
Pandora’s net loss widened to $11.7 million, or six cents per share, in the second quarter, from $6.9 million, or four cents per share, a year earlier.
Excluding items, the company earned four cents per share, beating analysts’ expectations by a penny.
(Reporting by Soham Chatterjee in Bangalore and Jennifer Saba in New York; Editing by Joyjeet Das and Grant McCool)
This article originally appeared on Recode.net.