Pandora Media said first-quarter revenue grew 58 percent, to $128.5 million, thanks to mobile advertising and new subscribers to the online streaming music service.
Pandora also said mobile revenue nearly doubled, to $83.9 million.
“The mobile cap they put in place appears to be working — it’s driving lower content costs and additional subscribers,” said Aaron Kessler, an analyst with Raymond James.
Pandora shares jumped 9 percent in extended trading after closing at $17.16 on Thursday.
Pandora, whose revenue comes mainly from advertisers, introduced a cap of 40 hours for free listeners on mobile devices. Subscription is required beyond that limit.
Mobile is an important revenue source for Pandora as more people listen to music on smartphones.
But Pandora faces competition from Spotify, Sirius XM Radio and Google, which launched a subscription music service earlier this month.
The other challenge facing the decade-old company is the rising cost of licensing music, which grows as more people tune in. The company has about 70 million active listeners, up 35 percent year-over-year.
Content acquisition costs were 66 percent of total revenue for the quarter compared with 69 percent for the same quarter a year ago.
Pandora is looking for a new chief executive to replace Joe Kennedy, who announced he’ll step down in March. Kennedy is still serving as CEO and said the search was progressing, but did not give a timeline.
“I’m 100 percent engaged in the role,” he said.
The company raised its revenue forecast for the year to $615 million to $635 million.