Pandora Revs Rise 54%, CEO Steps Down
Internet radio service Pandora said on Thursday that CEO Joseph Kennedy will soon leave the company.
Kennedy, who has been Pandora's CEO since July 2004, said in a statement that after discussions with Pandora's board of directors, he will remain as chief executive until a replacement is named. The announcement came just after Pandora reported fourth-quarter results that beat Wall Street expectations.
The company saw revenue rise 54% to $125.1 million on strong advertising sales for the three months ended January 31. Excluding stock-based compensation, it posted a loss of four cents a share, up from three cents in the year-earlier period.
Analysts, on average, had estimated a loss of 5 cents a share on revenue of $122.8 billion.
Pandora said ad sales in the quarter rose 54% to $109 million, while subscription and other revenue increased 74% to $16.1 million. Fueling those gains were growing usage numbers. Total listener hours grew 53% to 4.05 billion in the quarter from 2.66 billion a year ago. It had an 8% share of the total U.S. listening audience in January, up from 5.55%.
With most users now accessing Pandora via mobile, the company reported that mobile revenue increased 111% to $80.3 million in the fourth quarter. That rate even outpaced mobile listener growth of 70%. The company last week imposed a 40 hour-per-month cap on free music streaming on mobile devices to help address rising royalty costs.
To streamline ad-buying on Pandora, the company earlier this week announced integrating its audience rating system with Strata and Mediaocean -- two of the largest media-buying and processing platforms. The step will allow advertisers to more easily compare Pandora’s ratings alongside those of traditional radio stations.
Looking ahead, the company forecast first-quarter revenue of $120 million to $125 million, with an adjusted loss per share of between 10 cents and 13 cents.
Pandora shares were up 19% to $11.73 in after-hours trading following its announcements on earnings and Kennedy stepping down.