The stock climbed 17 percent in extended trading after closing at $10.33 on Wednesday.
"We are making excellent progress on all fronts - consumer adoption continues at an extraordinary pace," Pandora Chief Executive Joe Kennedy said in an interview with Reuters.
Pandora raised its full-year revenue outlook to a range of $420 million to $427 million from a previous forecast of $410 million to $420 million.
Pandora said it expects to narrow its non-GAAP net loss to a range of 7 to 11 cents per share, from a previous forecast of 11 to 16 cents.
"It was a good quarter and a very good start to the year," said BMO Capital Markets analyst Edward Williams.
Pandora is a mostly free music service that recommends different songs based on listener's playlists. Supported mainly by advertising, it competes with traditional radio companies such as Clear Channel, satellite radio provider Sirius XM Radio Inc, and new upstarts like the popular Spotify.
The decade-old company has yet to turn a profit as it spends money to build up its sales force. The bigger Pandora's audience gets the more it has to pay record labels fees for broadcasting their music.
The company is also going to aggressively build out its local sales force, Kennedy said on a call with analysts, so it can better compete with traditional radio stations that already have bulked up their sales departments.
Pandora announced in May that Triton Digital will measure its audience size and reach, an important move since advertisers turn to third party providers for information about listeners.
Pandora reported on Wednesday that total revenue for its first quarter rose 58 percent to $80.8 million. Analysts on average were anticipating revenue of $74.3 million, according to Thomson Reuters I/B/E/S.
Adjusted for items, Pandora reported a quarterly net loss of 9 cents per share, well above analysts' expectations of a loss of 18 cents.
(Reporting By Jennifer Saba; Editing by Gary Hill, Richard Chang and Phil Berlowitz)
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